CONTACTS 
0201 - Corps of Engineers, SFD            415 977 8400 fax 8483
020101 - Mr. Thompson F. Keesling, Architect; Assistant Chief =415 977 8473
020102 - Construction Operations Division =415 977 8480

SUBJECTS
COE Evaluation Communication Metrics
CE HQ Evaluation, Wider Use Comm Metrics
Partnering, Dispute Resolution
Common Administration
Concurrent Dispute Resolution
Cost Savings Avoid Rework Mistakes
Partnering, TQM for Contracts

1609 -    ..
1610 - Summary/Objective
1611 -
161101 - Followed up work at ref SDS 6 5319, ref SDS 5 1426.
161102 -
161103 - Developed preliminary thinking on using Communication Metrics as an
161104 - independent partnering agent that performs common record keeping and
161105 - provides concurrent dispute resolution to avoid litigation.
161106 -
161107 - Submitted via ref DIT 1 this record to Tom for consideration of direct
161108 - support for USACE partnering objectives.  Sent copy to Jim.
161109 -
161110 -    [On 971027 talked to Tom. ref SDS 10 7488]
161111 -
161112 -    [On 971028 sent letter on using intranets for Communication
161113 -    Metrics. ref SDS 10 1209]
161114 -
161115 -    [On 971030 called Tom on this. ref SDS 11 8840]
161116 -
161117 -    [On 971103 discussed proposal. ref SDS 12 7388]
161118 -
161119 -    [On 980520 reminded CESPN of this opportunity. ref SDS 13 0905]
161120 -
161121 -    [On 990305 USACE adopting paperless contracting. ref SDS 15 9044]
161122 -
161123 -
161124 -  ..
1612 -
1613 -
1614 - Analysis
1615 -
161501 - Partnering Can be Enhanced by Communication Metrics
161502 -
161503 - This is to begin consideration for using Communication Metrics to
161504 - support the partnering program for USACE, raised by Jim Jones in the
161505 - discussion on 970828, ref SDS 2 1197.
161506 -
161507 - On 940105 article explains partnering problems. ref SDS 1 7493
161508 -
161509 -     [On 971021 arcticle in PMJ supports initiative. ref SDS 9 2635]
161510 -
161511 - Current practice for partnering results, at least in the case of the
161512 - Oakland Harbor project, in a forum for the contractor to create
161513 - confusion in the record and advance unfounded claims.  The shear size
161514 - of the record renders ultimate fact finding tenuous, costly and
161515 - problematic at best.
161516 -
161517 -     [On 981027 $30M extra paid on $42M contract. ref SDS 14 9152]
161518 -
161519 - These conditions place USACE at a disadvantage because ponderous
161520 - organizational structure and regulation limit ability to respond, and
161521 - this places USACE at greater risk vis a vis a less constrained, nimble
161522 - contractor in that the governemnt's record often initially looks
161523 - evasive and non-responsive in court, presenting an added burden for
161524 - USACE counsel to overcome in protecting tax payers.
161525 -
161526 -     [On 990418 Caltrans experienced problems with using "partnering."
161527 -     ref SDS 17 8845]
161528 -
161529 -     [On 990625 Kaiser trying partnership. ref SDS 18 4185]
161530 -
161531 - Communication Metrics employed by USACE redressses this problem, but
161532 - there may be another approach worth considering.
161533 -
161534 -
161535 -  ..
161536 - Common Administration, Concurrent Dispute Resolution
161537 - Partnering Should Avoid Disputes; Minimize Litigation and Costs
161538 -
161539 - USACE might specify a partnering or contract management program that
161540 - requires application of Communication Metrics where a neutral captures
161541 - the record using concurrent discovery practices, and renders decisions
161542 - on disputes in the manner of arbitration practices now being used in
161543 - California by Department of Transportation (Caltrans).
161544 -
161545 -     [On 971021 arcticle in PMJ supports initiative. ref SDS 9 2635]
161546 -
161547 -     [On 990331 submitted to HQUSACE. ref SDS 16 8112]
161548 -
161549 -     [On 010608 submitted to DCMA. ref SDS 19 6Y9I
161550 -
161551 - Communication Metrics under this proposal, would bring the parties
161552 - closer to the objectives of genuine partners, cooperating to
161553 - accomplish a needed public improvement at a fair price for tax payers
161554 - and the contractor.
161555 -
161556 -
161557 -  ..
161558 - Partnering Yields Common Understandings with Communication Metrics
161559 -
161560 - The SDS record would provide a common base of information, subject to
161561 - timely correction by the parties.
161562 -
161563 -      [On 971021 intranets may support partnering. ref SDS 9 7400]
161564 -
161565 - Communication Metrics in this application is a common record keeping
161566 - process, which neither the contractor nor the government really wants
161567 - to perform because it is a hard, tedious job that requires special
161568 - fact finding skills.  SDS technology makes it more economical for this
161569 - work to be performed by Communication Metrics, than for each side to
161570 - perform a duplicate effort that typically falls short of what is
161571 - needed for dispute resolution, and for effective management.
161572 -
161573 - The Communication Manager can proactively identify alignment that is
161574 - otherwise overlooked and leads to mistakes that cause claims.
161575 -
161576 -
161577 -  ..
161578 - Concurrent Dispute Resolution Results from Common Understandings
161579 - Common Understandings from Communication Metrics Reduces Costs
161580 -
161581 - If a dispute occurs, both sides would benefit from timely decisions
161582 - without the necessity of protracted administrative and legal review,
161583 - with attendant explosion in production of documents.
161584 -
161585 - Decisions of the neutral could be appealed to the courts, but any such
161586 - appeal would have to be based on the record submitted to the neutral.
161587 - This would save both sides enormous litigation expense.  The advantage
161588 - to the contractor is getting paid more promptly, rather than having to
161589 - wait to the end of the job.  Neutrals would have to demonstrate
161590 - training and/or experience in Communication Metrics and in arbitrating
161591 - construction contract disputes.
161592 -
161593 -
161594 -  ..
161595 - Common Administration by Communication Metrics Yields Cost Savings
161596 -
161597 - Communication Metrics would actually avoid most disputes because it
161598 - improves present practices that cause rework due to limited span of
161599 - attention, as related in the CESPN report dated 971007. ref DRP 3 0001
161600 -
161601 - The cost of Communication Metrics could then be incorporated into the
161602 - project budget bid by the contractor.  In the case of the Oakland
161603 - Harbor project, the original budget was $54M. Communication Metrics
161604 - costs would run about $1M for the 2.5 years of the project.  The low
161605 - bid awarded to the contractor was $42M. If it had been $43M, this
161606 - would still have been a substantial bargain.
161607 -
161608 - On a $50 - $100M project, the cost would be less than 2%. It would
161609 - save the government and the contractor substantially on cost of
161610 - preparing correspondence, because most of the time now devoted to
161611 - formal posturing, would be eliminated by developing common, timely
161612 - understandings in the electronic record of events, e.g., weekly
161613 - progress meetings.  This would reduce on the Government's side S&A of
161614 - 2%+ and likely save several million dollars for both sides in legal
161615 - costs.
161616 -
161617 - More to the point, however, Communication Metrics would have avoided
161618 - in substantial degree the $65M in claims now being disputed on
161619 - Oakland, plus save administrative costs for both sides.
161620 -
161621 -
161622 -
161623 - Partnering/Communication Metrics Concept Needs Review
161624 -
161625 - This proposal should be submitted for comment to USACE counsel,
161626 - Contracting Officer representatives and Construction Managers.  It
161627 - also requires review by contractor interests, e.g., AGC.
161628 -
161629 - Key issue to be resolved is procedures for maintaining neutrality of
161630 - the Communication Manager in an atmosphere that permits flexibile fact
161631 - finding consistent with the pace of the work.  The protection for both
161632 - sides is timely access to a common record.
161633 -
161634 - Another challenge is that Communication Metrics needs to be applied
161635 - early in the design stage to avoid difficulties that occur during
161636 - construction.
161637 - ..
161638 - Some contractors seek project document difficulties as a
161639 - competitive strategy to underbid and make up the difference in claims.
161640 -
161641 - Some owners/design professionals produce defective contract documents
161642 - because of political pressure to get the job going without disclosing
161643 - the true price.
161644 -
161645 - USACE could select a project to perform a pilot test.
161646 -
161647 -
161648 -
161649 -
1617 -