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EXECUTIVE SUMMARY

LBT PROPOSAL 5/26/01

Attached to this Executive Summary you will find our revised quotation for
all packing and transportation costs associated with the delivery of the
Large Binocular Telescope from Milan Italy to three different destinations
in the United States.

There are five different groupings of the cargo as follows;

1. MASTER LIST
This list includes all pieces regardless of destination, size or
packaging. The pricing at the bottom of this list is all-inclusive for
the entire project.

2. CONTAINER LIST
This list only lists cargo that will fit into ocean containers from Italy
to Arizona. The containers types will be 40' standard containers, 40'
open top containers, or 20' standard containers. All equipment will be
crated and waterproofed before loading into containers.

3. BREAKBULK LIST
This is a list of all cargo that will not be loaded into standard ocean
containers. This equipment will all be packed very securely and will be
stowed under-deck for maximum protection on the ocean vessel.

The Container List and the Breakbulk List combined are the same as the
Master List.

4. OVERSIZE CARGO LIST
This equipment list includes the 29 largest finished crates which account-
for 69% of the total weight, 84% of the total volume and 81% of the
total expense for the entire Master Equipment List.

5. OHIO EQUIPMENT LIST
This is a listing of the equipment that must be transported from Houston
to Columbus Ohio.


We have re-investigated every category of expense related to the
transportation and packing of the telescope components. Our goal was to
reduce all costs through negotiation with the different vendors that will
be involved in this transportation project, while still maintaining a
realistic level of service and equipment security. We have also re-
examined our methodology to ensure that;

ALL ASPECTS OF THE COST HAVE BEEN INCLUDED IN OUR QUOTATION

EACH VENDOR (e.g. packer, steamship line, trucker, and crane operator)
UNDERSTANDS THE SENSITIVITY OF THE EQUIPMENT THAT IS MOVING

EXECUTIVE SUMMARY

LBT PROPOSAL 5/26/01 continued

EACH PACKAGE ON OUR EQUIPMENT LIST REPRESENTS THE PROPER SIZE AND WEIGHT
REQUIRED TO PROTECT IT FROM DAMAGE.

Although GeoLogistics achieved excellent reductions in ocean freight costs,
U.S. inland freight costs, and insurance costs, the overall cost quoted at
this time is $79,621.60 more than the total cost of our first proposal
primarily due to increased crating cost and increased crate sizes.

Marco Medici of GeoLogistics Milan, Italy has spent much of the last 30
days studying the equipment itself and the road to Italian Ports.

Marco met on more than one occasion with Gianpietro Marchiori. Marco also
took with him to meetings at Ansaldo, Mr. Furgada and Mr. Cerioli of the
packing company called FIM Legno. Mr. Marchiori described in great detail
the type of packages that should be built for every piece of equipment.

Our proposal is based on the following general packing specification;

1. All pieces will be packed, even those that will be loaded into
containers.
2. The packages will be a combination of fully-enclosed cases, and
framework crates.
3. All packages will be constructed of hard-wood fir.
4. Pieces of less than 20 tons have been constructed for stacking.
5. Pieces of over 20 tons will not be stacked.
6. Main joints will be of male/female construction for strength.
7. All cases will be lined with tar paper, and all cargo will be wrapped in
polyethylene sheets.
8. Vacuum-pack and desiccant will be used as necessary to protect sensitive
electronics from moisture.
9. Ansaldo will treat all parts with Tectyl 506 EH to protect them from
oxidation. GeoLogistics will re-apply Techtyl 506 EH as necessary on all
exposed surfaces at no additional cost. We will apply Techtyl 506 EH on
unexposed surfaces if required, but this will require an additional cost.

10. Pricing includes the loading, blocking, and bracing of all containers.
11. Cases will be built so that they can be removed in layers to allow for
unloading at the Telescope Facility on Mount Graham.

All proposed rates are based upon the net weight and dims as provided by
LBT in their "Packaging and Transport/List of Items" (4/28/01). Should
those net weight and dims change before shipping, our quotation will be
adjusted up or down to allow for that new information.

The full description of packing requirements from Mr. Marchiori was our
reason for increasing the size and protective properties of each case. The
result was not only twice the packing cost, but also 15% more overall
volume for the shipment. It also meant that

EXECUTIVE SUMMARY

LBT PROPOSAL 5/26/01 continued

there will be more pieces in the "super-oversize" category which will
affect inland freight costs in Italy and port costs in both Italy and
Houston.

Despite the additional tonnage of the shipment caused by the additional
packing, we were able to reduce ocean freight by 15% and U.S. inland
freight cost by 25% through the introduction of more competitive bidders.

The ocean freight cost in our proposal is based upon 90% of the cargo
moving in one shipment from Venice, Italy to Houston, Texas.

The inland freight cost in our proposal is based upon a combination of
rail, truck, and barge service from Houston to three destinations. Rail
will only be used for containers, truck for the breakbulk equipment moving
from Houston to the Safford Base Camp, and a combination of barge and truck
for the cargo moving from Houston to Columbus, Ohio.

INLAND FREIGHT IN ITALY
The inland costs quoted from Ansaldo's plant to Porto Marghera in Venice
include the following;

1. The removal and re-installation of the front gate from the Ansaldo
facility.
2. One piece of large equipment can be moved every night.
3. The removal and re-installation of some traffic lights.
4. Truck to Cremona and Barge to Venice for items no. 4.1, 7.1, 7.2, 8.1,
and 15.12.
5. Storage in Cremona is included.
6. Barge detention is included in the quotation.
7. All crane usage and stevedore costs are included as well.
8. Pricing also includes the delivery of other breakbulk pieces to Italy by
truck and the delivery of approximately 20 containers by truck.
9. Pricing also includes the cost of all road permits required.


PORT STORAGE IN HOUSTON TEXAS

All equipment can be stored at the Port of Houston for up to 6 months with
no expense.


OCEAN FREIGHT SCHEDULE AND PRIORITY

We will be prepared to move the Azimuth Ring Sectors (Item 1.1) and their
related equipment first, and separate from the rest of the telescope. This
can be done in full container loads on an alternative vessel.



EXECUTIVE SUMMARY

LBT PROPOSAL 5/26/01 continued

We plan on moving the balance of the telescope (including the Columbus-
destined cargo) on the same vessel.

ALL OTHER DETAILS AND REQUIREMENTS IN THE "LBT PROJECT TECHNICAL
SPECIFICATION, PACKING AND TRANSPORT" (DOCUMENT NO. 401e049) SHALL BE
FOLLOWED EXACTLY AS DESCRIBED IN THE PUBLICATION WITH ISSUE DATE
22.01.2001.




PREPARED BY CARY MASON