how to win … by losing!
Post on 25-Feb-2016
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How to Win … By Losing!
Kenneth A. Catlow, PEVP – 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!”• BMGT, University of Maryland, University College• MHR, University of Oklahoma• Professional Engineer (Civil)– Guam– Hawaii– Oregon– Maryland
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
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
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!
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?
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?
War Story #3
• Our Brethren on the Hill• Budget Battle– Republicans– Democrats– President
• Who Won?
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?
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
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
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!
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?
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
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 …
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
Questions?
Don’t Waste Time
And $$$$
Fighting … Negotiating
Settle TODAY!
Contact Information
Kenneth A. Catlow, PEURS CorporationPM/CM Business Development Manager2020 K Street NW, Suite 300Washington, DC 20006-1806Direct: 202-772-0646Mobile: 202-802-4295
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