Marco, Ken and I huddled in my office Sunday afternoon discussing the proposed Roland Garros renovation. Marco’s three engineers were spread out in the conference room. Roger, our resident computer expert, was downloading project control and CAD information from the website that Emey Labrey had provided me. Two engineers poured over the drawings that Roger printed on our HP Engineering Printer. Marco and his team had been there since eight AM while the French played golf.
“Well, Marco, what have you come up with? Can we do it?”
“Oh, we can do it all right, if we have enough time. Bouygues wanted four years to dome the two stadium courts and do the other enhancements. Putting an upper deck on Court One will take over a year by itself. And that was before the damage done last month. There is no way we can do this in 22 months unless we take a different approach. No way!”
“Tell us how you really feel,” Ken chided. “Don’t hold back.”
“There has to be a way,” I said without conviction. “Is there anything in their construction schedule that can be split off and given to another team? Ken and I were talking about using several companies that would handle different facets of the job. Can this work?”
“I’m way ahead of you. Let me show you what we found so far. Keep in mind that the development of a project plan is predicated on having a clear understanding of the tasks involved, the estimated length of time each task will take, the dependencies between those tasks, and the sequence in which those tasks have to be performed. Additionally, resource availability must be determined.”
“In other words, we need a PERT chart?” Ken summarized. “Did Bouygues have one?”
“Yes and no. A ‘Program Evaluation and Review Technique’ chart is supposed to depict task, duration, and dependency information. Their PERT chart doesn’t show any dependencies.”
“So, what’s the problem?”
“Take a look at this example,” Marco said as he turned his PC laptop towards us. Notice that tasks 4 and 5 are the limiting variables or funnels. Imagine O’Hare airport with only one runway, or the Golden Gate Bridge reduced to a single lane of traffic. These are bottlenecks.”
“So, what are the bottlenecks for this project?”
“There aren’t any, at least that’s what Bouygues would have you believe. Bouygues doesn’t show any task overlap on their time line, but on the other hand, they don’t show any slack time. This set off an alarm and we began looking for the reasons.”
“Did you find something?”
“We won’t know for sure until Roger finishes loading the tasks into our project control system, but it appears they have at least two key resources in short supply that are critical to the timeline of this project.” Marco paused for effect and Ken took the bait.
“Gee, Jim, let me guess, thumbtacks and paperclips? Maybe we could turn this guessing game into a reality show.” I was smiling as Marco waited for Ken to finish. We had worked together long enough for Marco to know when to take Ken seriously and when to let him ramble on.
“No, Ken, it’s not paperclips. If you give up, I’ll just have to tell you. The first resource in short supply is engineering, specifically civil engineers. It looks like several major jobs could be done simultaneously if they added 75-100 more engineers, but that’s a huge investment for anyone to make for one project. What do they do with the engineers when Roland Garros is finished?” Marco asked rhetorically.
“I see.”
“The obvious answer is to sub the work out, but this isn’t the French way. It’s easier to keep the whole project in-house.”
“What’s the second limiting factor?”
“Steel, Bouygues buys all its steel from Usinor, another French company. This might be the reason they wanted to do the domes one at a time, rather than both at once.”
“Wow, that is a surprise,” Ken commented. “The European Union is the second world’s largest crude steel producer in the world, only China produces more steel. The EU has almost 20% of the world market. Belgium or England would be happy to supply the steel we need, and the EU tariffs are so low, the cost would be about the same. I wonder what the problem is.”
I was always amazed when Ken came up with these obscure facts, which invariably proved correct. But just to be sure, we did a quick Google search and saw that the EU manufactured 18% of the world’s steel. “Is 18% the same as almost 20%?” I asked Marco.
“Not even close,” Marco replied playing along. “Just a lucky guess, but let’s give him the benefit of the doubt this time,” Marco said with a straight face.
Ken just sat back in his chair. His smug look said it all, you doubted me? “I’ll look into Usinor and see if there is any financial connection to Bouygues.”
“Good idea, but where do we go from here?” I asked more to myself than to the others. “Marco, what is your gut feel? If we eliminate these bottlenecks and spread the work, can we get it done?”
To his credit, he did not answer right away, and when he did his reply was carefully worded.
“Maybe.”
Ken and I took that as a ‘definite maybe’. “Marco, after you finish loading the data into your PC System, can you get me something simple like a Gantt chart that we can use in tomorrow’s meeting? I don’t want to be talking PERT Charts and Critical Paths with these guys. Emey Lebrey is an engineer and a detail guy, but I don’t think the other two are, and Paul Gutreau is the key guy in this deal. If I read them correctly, he will have the final say.”
“Gutreau is the money guy, isn’t he?” Ken asked.
“It looks like it. He is the politician that said the RG foundation was broke.”
“The reason I bring this up is this might be another reason Bouygues wanted to string this project out over four years, they wanted to make sure they got paid,” Ken surmised.
“Excellent point, Ken,” I replied nodding in agreement. “Let’s keep that in mind when we put together our financing package. By the way, have you gotten hold of Sven?”
“No, but I’ll call him right now to see if he is interested in participating. How much should we ask for?”
“What was the Bouygues cost estimate, 800,000,000 Euros or about 960M dollars over four years? Let’s double it, at least until we get some better numbers. In the meantime, I’m going to call Hunt Engineering to see if we can count on them for at least one piece of this deal. Their experience doing big international projects would be invaluable.”
“Hunt would also help us keep Bouygues under control,” Marco offered. “I know the Bouygues managers. They won’t be happy taking orders from any American company, particularly in a high profile job like this, but they have worked with Hunt before so that will help. There is nothing worse than having an unhappy subcontractor to worry about, especially one that is an industry giant like Bouygues.”
“Okay, let’s meet back here at 5:00 and see where we are. Marco, let Roger and your two engineers know I appreciate their coming in on Sunday, and there will be a little bonus for them on their next paycheck.”
“What about Marco and me?” Ken asked with a straight face.
“Dream on!”
It was after 6:00 PM when Marco finalized the revised Project Schedule and Gantt chart, but it was worth the wait. They had devised a new approach to the project that would cut off over two years, which gave us a fighting chance. It was only a rough estimate that would need to be shaken out, but it was an intriguing approach. The bottlenecks had been eliminated and seven projects would be performed in parallel. It gave us hope.
Summary-Level Gantt chart - Major Tasks
1. Repair Existing Stadium damage
2. Update Exterior Facing
3. Install Dome over Philippe Chatrier Court
4. Install Dome over Suzanne Lenglen Court
5. Redesign Seating, Restaurants & Press Box
6. Improve Transportation; Hwys; Marta; Parking
7. Improve Media staging area and Security
Tasks were spread out over a two and a ha
lf year period, with considerable overlap. Only Task one needed to be completed prior to next year’s French Open. This was the master plan for completing the project in the required timeframe.
There were two key assumptions, additional manpower and money. We needed two more construction companies on board in order to solve the projected shortage of engineers and other skilled craftsmen. Like it or not, Bouygues would need to be involved and play a key role. After all, this was a French project. I was counting on our friends at Hunt to help us out, but we would need one other company. I’d worry about that after we got the job. Lining up the money was a more pressing issue.
Ken and Sven came up with a financing plan that allowed us to pay our contractors and their subs on a current basis. Sven would provide 100% construction financing supported only by $25M construction performance bonds taken out by each of the four contactors, including my firm, Simpson Construction. Other than the bonds, the only additional equity was Roland Garros stadium. Morgan Stanley would issue the construction bonds.
I had spent the afternoon on the phone with the Hunt people. Fortunately, I reached their CEO, Carl Lindner, at home.
“Carl, this is Jim Simpson, with Simpson Constru….”
“Hi Jim, I know who you are,” Carl interrupted. It was your company that sent us the big check without being invoiced. It’s great to hear from you. I hope everything is going well with you and your family. What can I do for you?”
“Carl, you are unbelievable. I agonized for a half hour wondering if I should bother you at home or wait until Monday, and you turn around and treat me like an old friend.”
“You are an old friend, Jim. We are in a tough business inhabited by a lot of wolves. It’s important to recognize who our friends are. Your firm is at the top of our friends list.”
“I appreciate that, it makes what I have to ask a lot easier. In a nutshell, we have a great opportunity but we are in over our head and I need your help. Sound familiar?”
Twenty minutes later I had summarized the proposal the French made Saturday evening and some of the preliminary conclusions we had come to earlier. “Carl, we need you to run a couple of the major projects and help us keep a tight rein on Bouygues. What do you say?”
“Jim, this is a fantastic opportunity for both of us, and don’t think for a minute I don’t realize what you are doing. You don’t owe us anything, but we appreciate the favor. Hold on for just a minute while I try to reach someone.”
It was almost two minutes of silence before I heard someone on the line. “Jim Simpson, it’s great to hear from you. This is George Hunt. Carl tells me we may have an opportunity to work together again.” Forty-five minutes later we had an agreement in principle. It was such a pleasure to do business with good people.
I was in a great mood as I headed for home. “Hi honey, I guess it’s too late to go out for the dinner I promised.” It was almost 10:00 PM and I had promised to be home by 7:00.
“I’ve eaten and had two glasses of wine while I was waiting. I’m ready for bed. Jim, but I’ll take a rain check. You need to call Paul Gutreau, he called ten minutes ago and asked you to call him when you got home. He must have just missed you at the office.”
“Paul, Jim Simpson. How did you golf today?”
“I’m not a golfer, Jim, but we had fun, as much fun as you can have when you don’t break 100. The reason I called is that I was hoping you could join me for breakfast tomorrow morning out here at Saddlebrook. Is 8:00 AM too early?”
“I’ll be there,” I answered. We said our good nights and I joined Mary in the bedroom.
“Is everything okay?” Mary asked as she turned off the light.
“It couldn’t be better,” I said as I pulled her close to me. “I finally have time to spend time on the person that is so important to me.”
“Tell me more,” Mary whispered as she answered my kiss.
Ken and Marco were waiting when I walked into the office alone at 10:30 Monday morning. They knew I was meeting Gutreau for breakfast, but all of us had thought this was just a prelude to a long, knockdown, drag-out contract negotiation that would encompass the entire day. Wasn’t this why they had spent 14 hours in the office on Sunday?
“Gutreau wanted to know just three things,” I said as I summarized the breakfast meeting. I was tempted to keep them on edge by telling them what I had for breakfast, but decided this was no time to fool around. We all had too much at stake.
The first question came after Paul sipped his Florida orange juice. “Jim, is there a reasonable chance that we can have the new stadium ready in two years?”
“Paul, it’s going to be tight, but we can do it. We can get into the details later, but we believe it can be done.” Gutreau had no desire to get into more detail at this time.
The next question came while I was eating my french toast, which I was told had no similarity to French toast. “Jim, how are you going to control Bouygues? They need to be a big part of this, you know.”
“Paul, we understand your concern and have addressed the situation, trust me.” I mentioned my conversation with Carl and George Hunt, and that they had worked with Bouygues successfully on other projects. I also reaffirmed that Bouygues would play a major role. You could see the relief in his eyes.
The final question was when Paul was paying the bill. “How are you paying for this, Jim?”
“Paul, we have a commitment in principle with a Swedish firm that we have done business with before. They will file a lien on the stadium until they are paid, but no other encumbrances. The contractors will be paid as we go.”
“Can you do it for the 800M Euros that Bouygues estimated?” Gutreau asked without conviction. We both knew that the price would be much higher.
“Paul, that estimate was made a year ago, before the damage to the existing structure, and it’s going to cost more to fast-track the project. I can’t give you a number right now, but I think we will be looking at close to two billion Euros including the cost of financing. This will need to be a cost-plus contract. We don’t know enough to give you a fixed fee proposal. I’ll do my best to keep costs down.”
Paul sat back for a moment, mulling over his limited options. “I need you to keep Bouygues in the loop”, he repeated. They have a lot of political clout.”
“I agree. Bouygues will have a key role, but I plan on using Hunt for a large piece of the job. I happen to know that they have a good working relationship with Bouygues. We also might bring in a third contractor for the domes.”
Gutreau sipped his coffee before answering. “Okay, when can you start?”
“We shook hands and that was that. We’re hired! The biggest and most prestigious job we have ever undertaken, and it took less than two days to get the work.”
“That’s the way the French do business,” Marco said. “Everything is done face-to-face.”
“Ken, Marco, I really appreciate the work you did yesterday. Gutreau looked into my eyes when he asked me the three questions. It helped that we had our ducks in order. He knew that I wasn’t just blowing smoke.”
“That’s how the French do business,” Marco repeated.
The next day there was a small article in the Paris Daily Newspaper.
Contract Awarded to American Firm: In a surprise development, the contract to rebuild Roland Garros was awarded to Global Management, an American firm based in Tampa, Florida. The contract had been expected to go to Bouygues, the French Construction giant. Paul Gutreau, spokesman for the RG Committee, said that Global Management has a reputation for meeting tight deadlines. Their president, Jim Simpson, said that Bouygues would have a significant role in the project and plans to meet with Bouygues people in two weeks. His final stop will be Zurich, where he will finalize the financing of this two billion dollar project.
Agbu didn’t bother to read the rest of the article.
Chatrier 28
Building the Roland Garros Team