He was within his rights to cancel that? Correct. 

Your current boss has cancelled contracts as well? Correct. 

That is not unusual is it? No.

 Mercado's mission was to provide the best water at the cheapest price? Yes says Latimer. 

11:10AM Now looking at documents for contract 1361. Document from January 16th 2001. From Thomas DeRiamaker, general superintendent of engineering to Jacquelyn Jordan at DWSD. this is about services already provided under 1325. the budget for emergency service repair. Saying the contract needs to be extended. 

So gearing up for a new contract? Correct. 

And Inland Waters was o n 1325? Correct. 

So this is really the start of the process? Yes says Latimer. 

Now looking at DWSD letter to Angelo D'Alessandro at Lanzo Construction. Dated November 30 2001. From Kathleen Leavey, Interim Director of DWSD at this point. Letter lets Lanzo know that they were not highest ranked proposer on contract 1368. 

Moving on to new exhibit, letter from Latimer who was head governmental analyst at this point, prior to Kilpatrick taking office. Written to a Mr. Dennis Ozust, an executive with Inland Waters. Lets him know about a negotiation meeting on December 5th for 1362 and 1368. 

1362 was rolled into 1368? Correct. 

The bidders were Lanzo and Inland? Yes. 

Only those 2? Yes. 

So Inland won both those $25 million contracts? Yes. 

Latimer says they were going to inspect and reline sewers. 

This is prior to Kilpatrick being mayor and Mercado being DWSD director? Yes. 

Now looking at sign in sheet for first negotiation meeting on December 5th 2001. A couple of DWSD staff including Latimers, Inland Waters executives as well as individuals from Insituform, subcontractor for Inland. Insituform had a patented way to reline pipes. No one from mayor's office attended meeting? Correct. 

Now looking at letter of Ozust from Inland Waters to Latimer on December 17th 2001. The letter recaps what was discussed at the December 5th negotiation meeting. 

At this point Inland still not awarded contracts? No. 

At this point Inland should have provided a $50 million bond to secure the job but they didn't want to do that. They wanted to do 2 $25 million bonds says Rataj. 

11:36AM Letter dated December 27th 2001 from Bharat Doshi to Darryl Latimer. 1362 and 1368 have been rolled into one contract 1368. Amongst reasons for this was that it cut administrative costs in half. 

You don't know when Inland started on 1368 sitting here today? Latimer agrees he cannot. 

Another internal document from January 25th 2002 between finance department employees. They are questioning why 1368 is 2 times original estimate. Seem unaware that the 2 $25 million contracts have been rolled into 1 $50 million contract. 

As of January 25th 2002 Inland still not awarded contract? Correct. 

Letter from February 4th 2002 when Kilpatrick has taken mayoral office but Mercado not director of DWSD yet. Sent from Mr. Ozust of Inland Waters to Latimer. Ozust is returning requested documents bonds, insurance, certificates, work plan, organizational chart and costing.