440 Davis Court #1602
San Francisco, CA 94111-2496
415 781 5700

Date: Tue, 27 Oct 1998 14:30:50                         04 00065 61 98102701

Mr. Thompson F. Keesling, Architect
Assistant Chief
Construction Operations Division
U.S. Army Corps of Engineers
San Francisco District
333 Market Street; Room 806A
San Francisco, CA  94105 1905

Subject:  Communication Metrics
                Cost Savings eval by Merry


  1. USACE Office of Counsel letter Oct 22, 1998
  2. Meeting Tom/Rod Oct 27, 1998
  3. USACE report to CEMP Oct 8, 1998
    Communication Metrics Cost Savings
    Preparing for 21st Century

0 Dear Tom,

I finally, got your email, transmitting Merry's letter on Communication Metrics dated Oct 22, 1998, ref a. Thanks.

Analysis points to several issues for further consideration of cost savings from adding quality assurance to management.

Generally, a 3:1 savings shows an effective system. Added to the estimate of management time saved by avoiding rework, the original estimate of cost savings, may be in the ball park, ref c.

I corrected the link in the letter you issued to Merry on Aug 3, 1998, so she can access Jim Stout's recommendation on Oct 15, 1996. I also put it in her letter to you, so she can get it either way.

We may be able to engage Merry in thinking about these ideas by pointing out that Communication Metrics is the "quality assurance" metric that is added to management. It is quality control for management that is supported by technology to identify alignment with requirements and needed action, as explained in the POIMS paper.

The review process by USACE staff, and the general contractor, who had a duty to notify USACE of any material errors in the record, ensured accuracy of the record. Herb Cheong describes this process in his memo on April 7, 1997.

Similarly the Port had a duty of notice, so there is significant redundancy to establish the accuracy of the record.

Since the record saved the government $187K, this suggests it was accurate, otherwise the Port would have presented evidence showing that its original contention that the record was inaccurate, justified holding USACE liable rather than the Port for the $187K.

With respect to relevance, the contract provisions, budget, schedule and commitments of the parties through formal communications and daily conduct, establish the mosaic of subjects for identifying relevant information within the organic subject structure of the SDS program. Change orders and claims also provide clues about information that is relevant to project success.

Merry asked for a report on a particular subject, and that one single matter saved the government $187K. If reports on other subjects had been requested, could more money have been saved? A change in price from $43M to $73M suggests there may have been other savings for the same reason that saved $187K, i.e., the record accurately showed that extra cost was caused by others and not by USACE, and additionally, USACE was guided by the record to perform according to requirements and objectives, while others drifted off course.

Might it therefore be reasonably concluded that savings would have been greater, if Jim Stout's recommendation had been followed to use Communication Metrics for the duration of the project?

Based on this experience, should Communication Metrics be tried again to provide the "quality assurance" for management that Merry feels is needed?



Rod Welch