CONTACTS 
0201 - A. R. Construction Company           415 656 2800
020101 - Mr. Ronald Arana; President =414 656 2806
020102 - aramet@aol.com

SUBJECTS
Inquiries

0403 -    ..
0404 - Summary/Objective
0405 -
040501 - Follow up ref SDS 12 0000, ref SDS 11 0000.
040502 -
040503 - Ronald offered constructive ideas on formulating an agreement for
040504 - Welch to support ARC.  He offers to provide a vehicle for
040505 - transportation in exchange for a larger discount on the rate of
040506 - remuneration.  There was discussion of bifurcating payment for SDS
040507 - so that ARC is protected in the event this method is not adopted for
040508 - sustained use.
040509 -
040510 - He wants another meeting tomorrow to develop these ideas further and
040511 - reach agreement.
040512 -
040513 -    [On 991020 meeting with City Engineer deferred; Ronald focusing on
040514 -    Welch agreement, after solving problem on City College job.
040515 -    ref SDS 14 0001]
040516 -
040517 -
040518 -  ..
0406 -
0407 -
0408 - Discussion
0409 -
040901 - Ronald is in the middle of a conference call with his jobs.  He will
040902 - call back in about an hour.
040903 -
040904 -
0410 -
0411 -
0412 - 1140 Ronald called back
0413 -
041301 - He has been tied up yesterday and today, because the Project Manager
041302 - on the City College job quit.  Pat is supporting that project for the
041303 - time being.
041304 - ..
041305 - Ronald wants to talk about my letter, ref DIP 3 0001 linked to
041306 - the record of our meeting on 991015. ref SDS 11 0001
041307 -
041308 - He has a bid in Oakland at 1400.  He will try to stop by on his way
041309 - back from Oakland OA 1430 - 1500.  He will call if he gets tied up.
041310 -
041311 -
041312 -  ..
0414 -
0415 -
0416 - 1500 received call from Ronald
0417 -
041701 - He called several times while I was on the phone, and then went back
041702 - to his office.
041703 -
041704 - I apologized for this lapse in the "system."  We discontinued the
041705 - ring-down feature a year or so ago, because circumstances did not
041706 - require it, but today showed this new initiative needs that kind of
041707 - service.
041708 - ..
041709 - Ronald has to turn in the contract for the Golden Gate Park
041710 - project, to the City tomorrow morning.
041711 -
041712 - I suggested we meet after that.
041713 -
041714 - Actually, that would be a good time to meet the City people and
041715 - discuss our initiative, per my letter, ref DIP 3 0875, and our meeting
041716 - on 991015. ref SDS 11 3630
041717 -
041718 -    [On 991020 Ronald to reach agreement before I meet with the City.
041719 -    ref SDS 14 3224]
041720 -
041721 - He is tied up tomorrow afternoon solving the superintendent problem on
041722 - the City College project.
041723 -
041724 -    [On 991020 ARC has 6 hour meeeting on this matter. ref SDS 14 2205]
041725 - ..
041726 - He wants to try and meet later today.
041727 -
041728 - He will call me later to see about meeting again on my letter.
041729 - ref DIP 3 0001 linked to the record of our meeting on Friday.
041730 - ref SDS 11 0001
041731 -
041732 -  ..
0418 -
0419 -
0420 - 1532 Ronald called back
0421 -
042101 - He wants to meet at 1600 half-way between his office and mine.  He
042102 - suggested the Happy Donut restaraunt across the street from the Giants
042103 - new ball park on third street.
042104 -
042105 - I took a cab and arrived OA 1600.
042106 - ..
042107 - Ronald arrived OA 1615, and since traffic was light, I jumped
042108 - into his car and we drove back to downtown.
042109 -
042110 -
042111 -  ..
042112 -
042113 - ARC was low bidder on a project in Oakland bid this afternoon.
042114 -
042115 - Ronald is concerned they may be too low.  Seems like there is another
042116 - bidder only $100K or so above ARC, but Ronald feels ARC is $500K below
042117 - the mediun price.  It was a federal job, so he does not know if they
042118 - used different subs, and may have gotten a price that has a mistake in
042119 - it. ARC has done preliminary checking and does not see any mistakes in
042120 - its own work.
042121 -
042122 -
042123 -
042124 -  ..
0422 -
0423 -
0424 - 1600 Meeting at MacArthur Park
0425 -
042501 - Since we drove back downtown, we came to our building at the Golden
042502 - Gateway.  Ronald parked in my parking stall in the Golden Gateway
042503 - garage, and we walked over to MacArthur Park, a restaraunt.
042504 -
042505 - Visited until OA 1815, about 2 hours.
042506 -
042507 -
042508 -  ..
042509 - Com Metrics Provides Risk Management Against Inadequate Records
042510 -
042511 - Ronald initially expressed frustration about a superintendent who has
042512 - left the firm, and took with him a lot of information on initiatives
042513 - and opportunities ARC needs to help make the project successful.  This
042514 - can be loosely called lost "intelliectual capital," and organizational
042515 - memory, as explained POIMS. ref OF 1 1101 and ref OF 1 0859
042516 -
042517 -     [On 991020 six hour meeting to fix this problem. ref SDS 14 2205
042518 -
042519 - Ronald noted that SDS makes intellectual capital available for anyone
042520 - to continue the work, when someone leaves, goes on vacation or dies.
042521 -
042522 - This is a risk management benefit, which Ronald cited in our meeting
042523 - on 991015. ref SDS 11 5175
042524 -
042525 -
042526 -  ..
042527 - One Year Agreement with Quarterly Check Points
042528 -
042529 - Ronald proposes that we agree for me to work with ARC for a year, and
042530 - provide check points every 3 months to mutually evaluate progress. If
042531 - either party decides not to continue, then a one month notice is
042532 - required, so that each party has time to transition out of the
042533 - agreement.
042534 -
042535 - Ronald said he would want me to help find a replacement.
042536 -
042537 - I indicated this approach may work.
042538 -
042539 -    [On 991021 we confirmed these terms. ref SDS 15 4216]
042540 -
042541 -
042542 -  ..
042543 - Payment Once a Month
042544 - Consultant Agreement for Welch Co, Rod Welch Project Manager
042545 -
042546 - He asked how payment should be made, and I indicated payment can be
042547 - made to the
042548 -
042549 -
042550 -                           Welch Company
042551 -
042552 -
042553 - He said ARC pays twice a week.
042554 -
042555 - I advised payment once a month is preferable.
042556 - ..
042557 - Ronald wants to present me as the ARC Project Manager in
042558 - dealings with owners and subs.
042559 -
042560 - I agreed to this.
042561 -
042562 -    [On 991021 we confirmed these terms. ref SDS 15 4217]
042563 -
042564 -
042565 -  ..
042566 - Welch Provides Leadership and Training at ARC Office
042567 - ARC Offers Transportation; Goal to Minimize Travel Time and Expense
042568 -
042569 - Ronald wants me to spend time at the ARC office.
042570 -
042571 - He offers to provide a car to support this objective.
042572 -
042573 - We reviewed concerns about lost time traveling set out in the record
042574 - on 991013, ref SDS 9 6468, and again on 991015.
042575 -
042576 -     Right now it is 2321.  There is another hour or so of work to do,
042577 -     addressing Pat's inquiry, that came in late this evening.
042578 -     ref SDS 13 0001
042579 -     ..
042580 -     I believe this work is the source of "intellectual capital,"
042581 -     discussed above, ref SDS 0 0660, that increases earnings by
042582 -     reducing mistakes and noticing opportunities that otherwise are
042583 -     overlooked.  Traveling to and from work everyday for several
042584 -     hours, means I am up two more hours.
042585 -
042586 -     Traveling, also, disrupts the train of thought.
042587 -
042588 -     For many top executives traveling in the car or on a plane,
042589 -     provides time away from meetings and the phone for them to think
042590 -     things through, so this is "productive" time for them.  However,
042591 -     SDS uses a method called "thinking through writing."  "Thinking"
042592 -     is done by writing things down and then aligning the "thoughts"
042593 -     with requirements and commitments, and organizing the writing into
042594 -     "subjects" and action items, as I am doing now.  Traveling
042595 -     eliminates this time.  All of the good ideas developed while
042596 -     traveling without being able to add "intelligence," then have to
042597 -     be developed again in SDS, because SDS is a "thinking" tool that
042598 -     provides alignment. ref OF 1 0582  So it saves time and improves
042599 -     the work to avoid time on the road.
042600 -     ..
042601 -     Fortune published an article reviewed on 990625 that
042602 -     explained successful CEOs do a lot of writing, but that this is
042603 -     not conventional practice. ref SDS 7 1024
042604 -
042605 -     The easiest way to view this is that Rod basically needs to live
042606 -     where he works.  Explained that Millie and I have a home in
042607 -     Concord, but I stay in the City during the week, so I can work
042608 -     consistently, without interruption from traveling. We need to keep
042609 -     this in mind.
042610 -
042611 -     Ronald commented that this is expensive.
042612 -
042613 -     It is an investment in efficiency that saves time and money,
042614 -     because 10 - 15 hours a week are applied to "intelligence" work,
042615 -     rather than traveling.
042616 -     ..
042617 -     Obviously we have to go visit people, but our goal is to
042618 -     minimize time on the road, and a big target of opportunity is
042619 -     beating a path everyday between the same two points.
042620 -
042621 - Ronald seems to recognize that Communication Metrics is not an 8 - 5
042622 - process, as set out in the record on 991013. ref SDS 9 0341
042623 -
042624 - He wants the ARC staff to feel my presence at the office as a leader,
042625 - particularly in relation to teaching the use of SDS.
042626 -
042627 - Ronald noted that the job of Project Manager necessarily requires
042628 - spending time out of the office at the job site, at subs and owner
042629 - offices for meetings.  So, there is a natural tension between time in
042630 - the office and at other locations.
042631 - ..
042632 - Additionally, in a small, family owned business the owner is the
042633 - "leader."  Everyone else is a helper, until the business grows to the
042634 - point that the owner cannot be directly involved in everything.
042635 -
042636 - Accordingly, Ronald is the "leader."
042637 -
042638 - I am willing to support his leaderhsip in growing ARC.
042639 -
042640 - My sense is that this issue can be resolved by mutual respect of
042641 - competing objectives, whereas I am anxious to teach SDS to others, and
042642 - will spend the time needed at ARC's offices to support this objective.
042643 - Ronald is aware that my work is more efficient at my own office where
042644 - the layout, also called "ergonomics," is conducive to efficient
042645 - thinking and planning.
042646 -
042647 -
042648 -
042649 -  ..
042650 - Office Ergonomics will Support Efficient use of Com Metrics
042651 -
042652 - Ronald will provide an office layout at ARC that fits the model of
042653 - efficient planning and thinking for management work, including a plan
042654 - table.
042655 -
042656 - ARC will provide a new computer at their office at an estimated
042657 - cost of $1,500, to support my work.
042658 -
042659 -     We did not discuss a system for Ronald, nor the advantage of DSL,
042660 -     which is the subject of a meeting on 991021 with Yves Barbero.
042661 -
042662 -     Ronald indicated disappointment with past computer support.
042663 -
042664 -
042665 -
042666 -  ..
042667 - Payment for SDS and Mobilization Supports ARC's Goals
042668 -
042669 - Ronald questioned paying for the SDS program.  He seemed comfortable
042670 - with the idea of paying for mobilization.
042671 -
042672 - This is worth considering.
042673 -
042674 - We revied the central goal of our prospective agreement is to empower
042675 - ARC with use of SDS.  This requires ARC having a site license, as with
042676 - any other program or product, which is set out in the letter on
042677 - 991015. ref DIP 3 2156
042678 -
042679 - To protect ARC's interests, we considered paying for the SDS program
042680 - on the basis of half at the start of the project, due on 991026 in the
042681 - amount of $2,500, and the other half, due in three monts at the end of
042682 - the first check point, in the amount of $2,500.  If ARC decides not to
042683 - proceed, then it will not owe the second payment of $2,500.  ARC can
042684 - further deduct $2,500 from the monies owed for the last month of
042685 - service, if ARC elects to stop using SDS.  In other words the 3 months
042686 - is a trial period.  However, if ARC elects to continue using SDS, then
042687 - it will owe the $2,500 plus payment for the last month of service.  In
042688 - that case, Welch will support ARC with program updates and support for
042689 - a period of a year at not additional cost to ARC.
042690 -
042691 -
042692 -
042693 -  ..
042694 - Payment Commences According to Value Added for the Project
042695 -
042696 - Ronald wants my time to start on 991101, rather than 991015 as
042697 - proposed in the letter on 991015. ref DIP 3 2156
042698 -
042699 - The most important time for making a project successful is right now
042700 - to set things up correctly.  Once the "gun goes off" and work begins,
042701 - our ability to influence earnings is reduced each day, as management
042702 - is forced to react to circumstances governed by overlooked forces
042703 - beyond the control of the contractor.  Planning and configuring
042704 - efficient management processes help control events and avoid mistakes
042705 - that reduce earnings.  We have already begun the project management
042706 - plan. ref SDS 11 4225  I have agreed that if Ronald decides not to use
042707 - Welch, then this week will not be charged to ARC, and he can use the
042708 - planning with another PM, or throw it away and start over.
042709 - ..
042710 - If ARC decides to use Welch, then this planning is a proper
042711 - charge to the project.  For example I plan to visit with the City's PM
042712 - tomorrow, or at a convenient time for the Engineer, and we have the
042713 - meeting on 991025 which has been schedule by the City, per the record
042714 - on 991015. ref SDS 11 2214  We have to set up the project, hire a
042715 - superintendent. These are all ligitimate charges to the project for
042716 - work that needs to be performed.
042717 -
042718 - If ARC wants to defer payment for two weeks, which would otherwise be
042719 - owed on 991101, to 991115 or 991116, that is acceptable.  However,
042720 - there is no rational basis to donate needed work from 991015 to
042721 - 991031.
042722 -
042723 -
042724 -
042725 -  ..
042726 - Project Management of $80K+ for $12M Volume is Good Management
042727 -
042728 - Ronald wants to pay at the rate of $6K per month, rather than $7K per
042729 - month.
042730 -
042731 - I explained this is not acceptable for the reasons in the record on
042732 - 991013, ref SDS 9 3965, and the letter on 991015. ref DIP 3 2156
042733 -
042734 - Ronald feels the opportunity for Welch to show case SDS provides an
042735 - incentive to further discount the cost of Welch services.
042736 -
042737 - He feels the chance to develop processes for management integrated
042738 - with job site superintendence presents additional value for Welch to
042739 - fine tune SDS.
042740 - ..
042741 - I agree this is an incentive for me to take the assignment, as
042742 - set out in the letter on 991015, ref DIP 3 0875, reflecting our
042743 - discussion on 991013. ref SDS 9 3965
042744 -
042745 - Ronald pointed out that using Welch will create a burden on the new
042746 - project of $140K per year.
042747 -
042748 - We reviewed Ronald's idea that payment for Welch and Communication
042749 - Metrics is an investment to improve ARC earnings. It is not a static
042750 - payout against a static income; but rather like a large backhoe, it
042751 - positions ARC to increase earnings by performing more work faster,
042752 - better and cheaper, and it provides risk management to secure budgeted
042753 - earnings are not lost by poor management.  Ronald pointed out that he
042754 - plans to get 2 - 4 more jobs over the course of the next several
042755 - months.  This work needs to be properly managed, in order to earn the
042756 - budgeted profit.
042757 - ..
042758 - This assignment will require 80+ hours a week by Welch, and if
042759 - things break right it will earn ARC a lot of money, it will help ARC's
042760 - employees, and, also help, ARC's customers.  Ronald mentioned one
042761 - target of opportunity concerning piling in the range of $100K from our
042762 - discussion on 991015. ref SDS 11 5292
042763 -
042764 - There was discussion of formulating some incentive arrangements, that
042765 - could also minimize ARC's initial exposure.  This places the burden
042766 - on Welch to demonstrate earning capacity.
042767 -
042768 - One idea might be to start at $7K and evaluate progress at the first 3
042769 - month checkpoint.  If ARC earnings are not improving at the rate
042770 - anticiapted, then this matter can be revisited for an equitable
042771 - adjustment.
042772 - ..
042773 - We decided to continue thinking about these issues through the
042774 - week, and see how things look after the meeting with the City on
042775 - 991025.
042776 -
042777 -
042778 -  ..
042779 -
042780 - Ronald will get me the name and phone number for the City's Project
042781 - Mangager, so I can call and arrange a meeting, per our planning on
042782 - 991015. ref SDS 11 3630
042783 -
042784 -    [On 991020 Ronald discusses this procedure. ref SDS 14 3224]
042785 -
042786 -
042787 -  ..
042788 - Ronald is meeting a superintendent candidate tomorrow.
042789 -
042790 - I agreed to participate as discussed on 991015. ref SDS 11 0286
042791 -
042792 - He expects the superintendent to be on board about mid-November, i.e.,
042793 - in about 3 weeks.
042794 -
042795 - Ronald is not sure how the day will go tomorrow.  He will let me
042796 - know.
042797 -
042798 -
042799 -
042800 -
042801 -
042802 -
042803 -