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How to Win … By Losing! Kenneth A. Catlow, PE VP – URS Corporation.

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Presentation on theme: "How to Win … By Losing! Kenneth A. Catlow, PE VP – URS Corporation."— Presentation transcript:

1 How to Win … By Losing! Kenneth A. Catlow, PE VP – URS Corporation

2 My Background COE – Domestic – Overseas (Saudi Arabia, Germany, Korea) Pentagon Renovation Program (97 to 06) Parsons URS – Fort Meade (IC) – K Street

3 Education #1 College “Drop-Out!” BMGT, University of Maryland, University College MHR, University of Oklahoma Professional Engineer (Civil) – Guam – Hawaii – Oregon – Maryland

4 Education #2 Married 2 Daughters – One finishing college – One “off the payroll!” Why is this important? – My most significant “education” – We take work home – We take home to work

5 I Held a LOT of Jobs! Landscaper Survey Tech Construction Rep Office Engineer Project Engineer Resident Engineer Area Engineer Chief of Operations Deputy Program Manager Program Manager Head of Contracting Agency VP#1 VP#2 Husband Dad – Chauffeur – Dish washer – Painter – Plumber – Electrician – Carpenter – Laborer – Landscaper

6 My Way or the Highway! Didn’t work well in Saudi (anger / frustration / cost) Didn’t work well in Germany (anger / frustration / cost) Worked better in Korea (not so much anger / cost) – Didn’t work at all at home! (this could be really serious!) 27 years … never won a “negotiation” Once I “gave up, I ended up the winner!” Changed the “process” at the Pentagon – Began to focus on SETTLING! Didn’t work at URS … my new process didn’t work!

7 War Story #1 Taif Saudi Arabia – Project Engineer to cross-train as a contract specialist / negotiator – First session Very sophisticated Korean Contractor (Hanil) Asked my number and agreed Welcome to the “team” Hope you enjoyed your “gift” Who Won?

8 War Story #2 F-15 Flight Simulator (You’re killing me …) – Project Engineer (me) – Punch-list (I was “thorough”) – 356 items – I was #357 – My contractor counterpart became #358 – 6 weeks after turnover (chips/marks/ gouges, etc.) – I made some enemies … – I damaged relationships … – How much is enough? Who won?

9 War Story #3 Our Brethren on the Hill Budget Battle – Republicans – Democrats – President Who Won?

10 War Story #4 I have bought a number of cars (26) – What happens when you “negotiate” – How much do you save (per mile …) – Have you tried “online?” I’ve sold a number of cars – What happens – I don’t sell them any more – I give them away … Who won?

11 War Story #4.5 I built a house recently – Builder’s Price $300K – Site Prep … 60K or do it yourself – I did it myself … spent 100K I had to “negotiate” with plumber, earth work, driveway, surveyor, geo-technician, permit expeditor … I spent a lot of MY TIME on this – Modifications $300K … no negotiations allowed … – Loan carrying cost $100K – I got exactly what I wanted – Final cost of the house ~ $125 SF

12 Consideration #1 What does it cost a day when you drag out a contract? – Client’s time – Your time – Subcontractor time – Database time (the bane of my existence) – Delay time – Fragnets (another bane of my existence) – Impact analysis

13 Consideration #2 Average value of changes – 90% less than $25K on most jobs What are you willing to spend on negotiating changes … percentage wise? – Is 10% too much or too little – If you spend 10% on a 25K change that is only $2.5K … about 25 hours … TOTAL Run the numbers … what are you spending Recommendation … change the process!

14 War Story #5 Pentagon Renovation Basement Close Out Negotiation – $48 Million to $125 million – Close Claim $7 million Principal Contractors: Clark / Kirlin – Reams of paper – Lots of “fragnets” – Poor documentation One negotiation session: $3 million Who Won?

15 Recommendation #1 When you enter a negotiation … – Come prepared – Only after you have agreed on the SCOPE – Plan to SETTLE … no matter what – Plan to GIVE is you have to … in order to obtain a settlement – Lock the doors! – Understand the IMPACTS of NOT settling

16 War Story #6 Disappointed Subcontractor Early mistakes – Kick the can down the road – … it was a long road … – Documentation was poor … Client had funding challenges The “Request for Equitable Adjustment” The “Rejection” The subcontractor “negotiation” The law suit The settlement … almost 2 years later The damage …

17 Recommendation #2 Be like “Natalio” Settle small issues immediately … the same day they turn up Refuse to drag out negotiations … settle today! Lock the doors Keep focused on the cost of “negotiating” Move on … forget your first number Don’t waste your time over pennies per day

18 Questions?

19 Contact Information Kenneth A. Catlow, PE URS Corporation PM/CM Business Development Manager 2020 K Street NW, Suite 300 Washington, DC 20006-1806 Direct: 202-772-0646 Mobile: 202-802-4295

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