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How to Win … By Losing!

How to Win … By Losing!. Kenneth A. Catlow, PE VP – URS Corporation. My Background. COE Domestic Overseas (Saudi Arabia, Germany, Korea) Pentagon Renovation Program (97 to 06) Parsons URS Fort Meade (IC) K Street. Education #1. College “Drop-Out!”

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How to Win … By Losing!

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  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 #5Pentagon 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? Don’t Waste Time And $$$$ Fighting … Negotiating Settle TODAY!

  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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