CONTACTS 
0201 - S J Gallina & Company              510 943 1776 fax 1876
020101 - Mr. Edmond E. Traille; Partner

SUBJECTS
Personal, Finance, Taxes, 96
Tax Return 1997

0504 -    ..
0505 - Summary/Objective
0506 -
050601 - Follow up ref SDS 20 5635, ref SDS 19 0416.
050602 -
050603 - Completed tax report to Ed for the 1997 taxes.
050604 -
050605 - Submitted, ref DIT 1 2005, submitted this record and the check
050606 - register report.
050607 -
050608 -     [On 980303 received letter from Ed. ref SDS 21 0000]
050609 -
050610 -
050611 -
0507 -
0508 -
0509 - Progress
0510 -
051001 -  ..
051002 - Complete Posting Check Register
051003 -
051004 - Posted the detailed charges for the statements that were missing from
051005 - the check register the other day, ref SDS 20 2804, for which Millie
051006 - supplied the records:
051007 -
051008 -      Vendor           Check #  Date               Amount
051009 -
051010 -      MBNA             1957     970505             $  758.28
051011 -      MBNA             1964     970528             $1,096.41
051012 -      BOA credit       1973     970619             $  462.59
051013 -      MBNA             1975     970630             $  644.74
051014 -      First Card       2083     970801             $  526.19
051015 -      MBNA             2086     970801             $  777.89
051016 -
051017 -
051018 -
051019 -  ..
051020 - Prepare Tax Report
051021 -
051022 - Follow up ref SDS 4 1176.
051023 -
051024 - Create tax file spreadsheet:
051025 -
051026 -                   g: 08 03 02 01 13 tx97
051027 -
051028 - Sorted the file according to accounts, per ref SDS 1 1694,
051029 -
051030 -            Field L1, and Date and Check # fields as secondary
051031 -            criteria.
051032 -
051033 - Prepared tax report ref OF 5 6066.
051034 -
051035 -
051036 -  ..
051037 - Error in Interest Owed to Millie
051038 -
051039 - I seem to have made an error in reporting the interest owed to Millie
051040 - for the 1996 tax report.  It shows the amount of...
051041 -
051042 -                        $18,022
051043 -
051044 -      ...based on an incorrect calculation of summing across several
051045 -      horizontal fields, rather than summing vertically the current
051046 -      interest owed field. ref OF 4 1936
051047 -
051048 - I caught the mistake when preparing the 1997 tax report today, and so
051049 - the adjusted figure for 1996 is shown in the current report.
051050 -
051051 -                          $5,010
051052 -
051053 -      ... ref OF 5 2851
051054 -
051055 -
051056 -  ..
051057 - UPR Interest Adjustment and Audit
051058 -
051059 - Follow up ref SDS 20 6155, ref SDS 4 1335.
051060 -
051061 - I called and left a message for Ed last Friday to provide advice about
051062 - adjusting the interest obligation owed to UPR, per ref SDS 20 6155. Ed
051063 - has not called back on this matter, so we will submit the obligation
051064 - report with a note for Ed to make the adjustment to reflect the
051065 - accounting he worked out with UPR in 1996. consistent with prior IRS
051066 - audits, ref SDS 4 1335.
051067 -
051068 -    [On 980303, received from Ed the adjusted figures. ref SDS 21 1285]
051069 -
051070 -
051071 -  ..
051072 - Welch Company Review
051073 -
051074 - Follow up ref SDS 4 1770, ref SDS 4 1770.
051075 -
051076 - This is the annual "metric" of progress.  Financially, we stepped
051077 - further back.  The order with the U.S. Army Corps of Engineers, which
051078 - was cancelled at the end of 1996, by the San Francisco District
051079 - Engineer, ref SDS 4 2119, was re-formulated by the staff in February
051080 - and March to support the Richmond project. ref SDS 2 0000
051081 -
051082 - Welch did considerable pro bono work planning construction management
051083 - for the Richmond Harbor Deepening project, and developing a management
051084 - plan for the Construction Services Branch in Sausalito, e.g., meeting
051085 - on 970320. ref SDS 3 0000
051086 -
051087 - On 970403 the District Staff planned CBD procurement for Communication
051088 - Metrics services. ref SDS 5 5839  On 970428 reviewed organization plan
051089 - for Richmond project and CSB. ref SDS 8 0000  On 970501 Chief Con Ops
051090 - concerned about delay issuing contract for Comm Metrics. ref SDS 9
051091 - 2207
051092 -
051093 - In May the staff learned that the District Engineer would not approve
051094 - the Welch contract on Richmond nor for Construction Services Branch,
051095 - which was to have been included in the Richmond contract budget, but
051096 - was really a dedicated effort to improve management of the Branch
051097 - which handles all of the construction for the District.
051098 -
051099 - The District Engineer's refusal to approve the Welch contract was a
051100 - surprise.  The staff believed the only objection to using
051101 - Communication Metrics was for the Oakland Harbor project, because the
051102 - Port of Oakland, which is the project sponsor, did not want a record
051103 - of its representations at meetings.
051104 -
051105 - On April 18, 1997 the District staff issued a report dated Mar 28,
051106 - 1997, to the Contracting Officer. ref SDS 7 3368
051107 -
051108 - The report transmittal says in para 4.
051109 -
051110 -      The report concludes consideration should be given to wider use
051111 -      of the method we call Communication Metrics...  A Scope of
051112 -      Services has been developed for the Richmond Harbor project to
051113 -      use Communication Metrics for improving our project management.
051114 -
051115 - Key findings in the report itself were...
051116 -
051117 -      Communication Metrics [is] a business "Intelligence" role to
051118 -      organize and analyse information so that cause and effect and
051119 -      needed actions are revealed to make leadership effective.
051120 -
051121 -      Apart from theoretical explanations, the San Francisco District
051122 -      found that Communication Metrics improves teamwork, productivity
051123 -      and cost savings.
051124 -
051125 - The report includes an appendix "A" which has memos prepared by staff
051126 - members who interacted with the Welch Communication Metrics support:
051127 -
051128 -      Max Blodgett
051129 -      Chief of Construction                      April 6, 1997
051130 -
051131 -      Experience on the Oakland project indicates that value can be
051132 -      added to our people and our management by a combination of new
051133 -      skills and tools for daily "intelligence" support...
051134 -      Communication Metrics describes and accomplishes this objective.
051135 -
051136 -
051137 -      Leonard SooHoo
051138 -      Chief, Construction Services Branch        April 3, 1997
051139 -
051140 -      Communication Metrics is a new way of doing business... [it]
051141 -      keeps everyone in line with objectives so things get done.  Some
051142 -      people will like it because it catches mistakes, and others will
051143 -      hate it because it does not forget and accountability is
051144 -      stressful.  If we learn to use it properly, it would help us
051145 -      manage our contracts more efficiently.
051146 -
051147 -
051148 -      Herb Cheong
051149 -      Project Manager                            April 7, 1997
051150 -
051151 -      Communication Metrics discovers and fixes little deviations from
051152 -      requirements before they grow into big problems that cost time
051153 -      and money.  This goes against human nature to ignore deviations
051154 -      and suppress small controversies because big problems need
051155 -      attention.
051156 -
051157 -      ...I would like [Welch] to attend our weekly IPRs with the Port
051158 -      of Oakland and prepare minutes for the meetings, including
051159 -      action items, commitments and assigned responsibilities.
051160 -
051161 -
051162 -      Marc McGovern
051163 -      Construction Manager                       April 2, 1997
051164 -
051165 -      Communication Metrics is a method Welch uses to align what people
051166 -      say with contract requirements and what has been said and done
051167 -      previously.  This daily record is used to schedule tasks so
051168 -      priority and accuracy of daily management is maintained.  I have
051169 -      a big difficulty getting information when needed day-to-day
051170 -      [using conventional practice].  Communication Metrics seems to
051171 -      solve the problem.
051172 -
051173 - The government's report provides an official definition of
051174 - Communication Metrics, and some context to help people grasp the
051175 - potential of business intelligence to improve earnings.
051176 -
051177 - During May and June I supported a reengineering effort to change the
051178 - organization structure for the San Francisco District, and to
051179 - implement new automated systems.  The District Engineer called for a
051180 - system of "business metrics," so the staff felt Communication Metrics
051181 - would accomplish that goal for their management.
051182 -
051183 - In late June I received a call from Max Blodgett, Chief of
051184 - Construction Operations, asking me to meet with a newly assigned
051185 - manager of a specially formed claim team to address $65M in claims
051186 - filed by the contractor, ref SDS 11 7377, on the Oakland Harbor
051187 - project.
051188 -
051189 - This led to another flurry of work for a month or so to formulate a
051190 - claim support contract using the SDS record.  I had previously on
051191 - 970417, provided some reports from the SDS record on a particular
051192 - matter, at the request of District staff. ref SDS 6 1536  The District
051193 - Counsel said in a meeting on 970723, that Communication Metrics work
051194 - product had been beneficial to the government in reducing its
051195 - liability, and further support would be helpful. ref SDS 13 3218,
051196 -
051197 - This initiative ultimately was not approved by the District Engineer.
051198 -
051199 - I requested a meeting and met with the District Engineer on 970624 and
051200 - pointed out the evident disconnect between what the staff was doing,
051201 - the considerable work done by Welch to support the District, and the
051202 - Commander's reticence to approve use of Communication Metrics.
051203 -
051204 - The DE said he had not seen the staff's Communication Metrics report,
051205 - despite reports that it had been furnished.  A copy of the report was
051206 - given to the DE and he said he would provide comments.  The DE noted
051207 - that Communication Metrics is a different form of "business metric"
051208 - than he has encountered in his work practice.  He said he felt it is
051209 - not cost effective, but offered no support. ref SDS 10 7388
051210 -
051211 - The DE has not reported any error or other comment on the District
051212 - staff's report on Communication Metrics.
051213 -
051214 - On 970722, Max Blodgett, the Chief of Construction Operations reported
051215 - that the Criminal Investigation Division was involved with the Oakland
051216 - project, and that the District Engineer sent a memo (email saying that
051217 - the problems on the Oakland Harbor project were beyond his experience
051218 - and that the District needed special expertise. ref SDS 12 7488
051219 -
051220 - In August the District report on Communication Metrics was submitted
051221 - to Corps of Engineers' headquarters in Washington D.C. (HQUSACE).
051222 -
051223 - The Deputy Chief of Engineering for Military Programs at HQUSACE, then
051224 - requested a supplemental report on cost savings.
051225 -
051226 - On 971007 the District staff issued a report stating Communication
051227 - Metrics used for 3 months saved the government approximately $317K and
051228 - substantially contributed to cost avoidance of about $3.4M.  The
051229 - report estimated that Communication Metrics would have saved
051230 - approximately $5.8M or 10% of construction if used for the 2 year
051231 - construction period on the Oakland project.  This is an ROI of 10:1,
051232 - which could be substantially higher due to the $65M in outstanding
051233 - claims.
051234 -
051235 - This report develops a theory of "rework" for calculating cost savings
051236 - from improving management communication. ref SDS 14 1273
051237 -
051238 - Welch, the District Engineer and staff were invited to make a
051239 - presentation on the District's reports, to HQUSACE in Washington D.C.
051240 - on 971202.  The head of the Corps of Engineer's Research Division for
051241 - Business Systems in Illinois also attended the 971202 meeting.
051242 -
051243 - The District Engineer did not attend and would not approve attendance
051244 - by District staff.
051245 -
051246 - Financial constraints limited the level of effort that could be made
051247 - to exploit this opportunity.  I was unable to get anyone else to
051248 - attend the event, nor to assemble the presentation aids and graphics
051249 - needed to introduce new management science to a new audience.
051250 -
051251 - Following the presentation, several leads were developed for using
051252 - Communication Metrics in other jurisdictions until there is a change
051253 - in command of the San Francisco District, due now in July 1998. These
051254 - leads are now being pursued in Sacramento and in Portland, OR.
051255 -
051256 - During the Oct - Dec period, I began a major improvement of the SDS
051257 - program to develop an integration with the Internet so that business
051258 - intelligence generated by SDS, can be delivered to customers anytime,
051259 - anywhere. ref SDS 15 3636
051260 -
051261 - This has strong potential, provided we can generate a market for
051262 - business intelligence, which is not a settled question. Intelligence
051263 - delivered via Internet has the advantage of reducing use of paper and
051264 - Web browser technology enables easy access so people do not have to
051265 - learn to use the SDS program.
051266 -
051267 - An important side benefit of these SDS improvements has been to find a
051268 - solution to the problem of "knowledge creep."
051269 -
051270 - At the presentation in Washington D.C. a USACE manager said the ideas
051271 - of Communication Metrics are exactly what the Corps needs.  He asked
051272 - me to view a film they use in their management training that shows how
051273 - daily communications fail. ref SDS 16 7730
051274 -
051275 - When I returned to San Francisco, I contacted the film production
051276 - company and obtained a number of other training films on management,
051277 - looking for support to help managers overcome denial that help is
051278 - needed.
051279 -
051280 - These films showed that miscommunication occurs, but they mainly
051281 - relate it as a cause of hurt feelings and frustration in the office.
051282 - They leave the impression that better communication can be solved by
051283 - watching a movie, being more courteous and sensitive.  They do not
051284 - show the cost of miscommunication that justifies investing in a
051285 - proactive solution like Communication Metrics. ref SDS 17 0000
051286 -
051287 - In September, Max Wideman, who is a member of the Project Management
051288 - Institute, and has published several books on management suggested I
051289 - write a book on business communications.  I had previously submitted
051290 - the USACE report on Communication Metrics, and he felt there is a gap
051291 - in the literature on communications in relation to the ideas of
051292 - Communication Metrics.
051293 -
051294 - In January and February, I worked on the book, using background and
051295 - research in the SDS record over the past 10 years.  A few weeks ago I
051296 - began requesting peer review of the first draft.
051297 -
051298 - The failure of the San Francisco District to maintain use of
051299 - Communication Metrics is a setback in revenue and credibility that
051300 - impairs marketing a new idea.  Few people want to go first.  So after
051301 - presenting the USACE report they ask why the Corps is not following
051302 - their recommendation?
051303 -
051304 - It is a struggle to sell communications, intelligence and better
051305 - management to people seeking help.
051306 -
051307 -
051308 -
051309 -
051310 -