Just curious, are the leaks at the base of the dam, or up on the side of the dam?
The reason I ask is, if the leak is at the base the water could be coming under the dam under or through the core trench. If the leak is higher up on the side of the dam, it is more likely that the lifts of soil were too much at a time with inadequate compaction and the water is flowing through the dam horizontally.
A seep I would not be as concerned about as it might heal itself. But something like "running out like a garden hose" does not sound good at all. That much flow can cause erosion and cause the problem to get worse with time rather than better.
At least your contractor is planning on taking care of it, which is a good deal. Always nice when a person backs up his work.
