Dekefeating the Tyranny of Credentials

Aurelius Principle

A Multidisciplinary Approach
Works Wonders

“Let it be your constant method to look into the design
of people’s actions, and see what they would be at, as often as it is
practicable; and to make this custom the more significant, practice it first
upon yourself.”
– Marcus Aurelius

On Tuesday evening, September 17, 2013 Mayor Deke Copenhaver in an Augusta City Commission meeting challenged me to supply my “credentials.”  He cut me off and would not let me respond. Since he asked for it – here goes.

Fact of the matter is I don’t really have any credentials. I have something much more effective and powerful that I call the Aurelius Principle. What the principle stands for is looking at major transactions globally or taking a multidisciplinary approach. Clients get a whole lot of angles on a problem in one pass that just an accountant, lawyer, administrator, engineer, planner, procurement agent, or other professional cannot provide.

The Aurelius Principle works this way: it uses an opponent’s own power, authority, records, and documents against him. If you think about that, it is something that the very best attorneys use. If one does it really well, he might find himself with a new lucrative line of work. For example, the in depth study of the Augusta convention might lead to marketing the same strategies that the management company there used to secure $3 million a year taxpayer subsidy.

The Principle is time-tested and simply does not fail, because it works on all sides of valuable transactions. The technique has been leveraged up to ever higher planes. It worked well enough for me to hardly hit a lick at a snake and retire early. I don’t have a lot of references, but I do have the Mayor’s records. He will find those a lot more convincing than “Credentials”.

Let’s try to weave an aspect of the principle into the question that Deke Copenhaver asked. Marketing personally to Fortune Magazine listed company executives was nearly impossible but then I sent a letter to  them, with a great white shark eating their precious logos in a window envelopes! It worked! CFO’s whom I needed to spent $50,000 on to contact contacted me!

The renegade marketing added to an enquiry list from potential and eventual clients of Cost Recovery Works, Inc., its predecessors, and mine that included these names, which just might be impressive even to the Mayor.



Fort Sterling


Maryland Cup


Procter and Gamble




Hanes Brands


Sara Lee


Con Agra


National Gypsum


Georgia Pacific


Lilly Tulip








Johnson and Johnson


Fulghum Industries





Home Depot




Bass Pro




W.R. Grace


Eli Lilly


Bristol Myers Squibb




St Joseph Foods


Georgia Iron Works


Boise Cascade


Stone Container


Fort Howard






Packaging Company of America


Temple Inland




 Lenzing Fibers


 General Electric

 Hillshire Farms

 Fort James




Fulghum Fibres




 Duke Energy  Sweetheart Products  Hoku Corporation

 BCE Outdoor

 Control Plus  Arale Woods LLC

I performed work for 29 of those companies over the years as an employee, contractor, or subcontractor.

Leveraging up the Aurelius Principle in Augusta and Georgia has made for amazing findings and real results, especially during the Augusta Project since 2011.

To sum up, I knew I might be rusty and used Augusta like my very own laboratory to sharpen my skills. Not many rats escaped.



The author is President of Cost Recovery Works, Inc., a provider of multidisciplinary contract cost avoidance, cost recovery, and public policy services to industry and government.

Dear Arthur, Tipped Balls Hurt

Originally posted March 12, 2013

Are the Falcons underestimating the Atlanta City Council?

By Al Gray

As University of Georgia grads know, an untimely tipped ball tantalizingly close to the goal line can kill championship dreams. The Atlanta Falcons have executed a well-orchestrated plan over the last two years to carefully plan and execute the win of a free $1.2 billion new stadium. Now the weakened opposition is down to an unlikely, untested, last line of defense called the Atlanta City Council. Its members were spectators suddenly called into a game with no advance preparation. Only a disaster can stop the Falcons now. Surely a bunch of city council members can’t muster anything heroic. Everything has been so perfectly played that half of the backfield has been cloaked with invisibility.

Political maneuvers bail out GWCCA, get Falcons to first and goal

Moments after the opening whistle in 2010, the Georgia World Congress Center contingent on the team realized that they had a huge problem. If they fully surrendered stadium operations to the Falcons, not only would GWCCA be giving up $20 million a year in hotel motel tax funding (Consultants’ numbers lead to totals of $1.2 billion over 35 years), it would be giving away $15 million a year in net income on a successful Georgia Dome operation. If someone only looked at the financials there could be trouble. A worse problem was the $2 million to $3 million in GWCCA overhead that the Georgia Dome has been absorbing for years. Then someone realized that money is fungible and that the Atlanta Convention and Visitors Bureau (ACV partnership with GWCCA could be used as a conduit to shift costs equivalent to those then covered by dome operations. In 2011 the team got a new 1% hotel motel tax passed worth $6 million a year to expand the ACVB’s marketing of events in the World Congress Center and elsewhere. About $4 million of the new tax appears on the GWCCA’s 2012 FY financial statements. That might have tipped some people off, so GWCCA’s Frank Poe proclaimed, truthfully enough, that the new tax was not going toward stadium construction. The contract between ACVB and GWCCA was modified in 2011 uneventfully. The cost shift will be a handy tool.

The series of plays in the General Assembly enabling the Falcons takeover extended the hotel motel tax and, just last week, killed a conservative bill strengthening right to work laws that would threaten the “community investment” now needed to have any chance at victory in Council chambers.

Another saving grace in the potential damage to GWCCA’s finances is that Georgia governor Nathan Deal, who has had a major role in the stadium negotiations, and GWCCA’s Frank Poe, now 62, will probably be retired before the harm to GWCCA becomes known in 2018. $15 million Dome annual net income contributions might be too great a loss to overcome, necessitating a state bailout.

On first down –

Tipped Ball  #1 – Public costs are not capped at the $200 million advertised according to City’s and GWCCA’s own documents that are posted online.

The Falcons negotiators, gold dome allies, and GWCCA facilitators have stayed remarkably on message that public funds are only $200 million, while the Falcons will be paying $800 million of construction costs. When the deal with Atlanta Mayor Kasim Reed was announced on Thursday, March 7, the press release said “The public contribution for stadium construction is capped at $200 million.” Maybe the Mayor thinks the council won’t mind that the legal summary says

 “Budget/Contributions: Estimated $948 million, comprised of….. Public Contribution: $200 million net proceeds of the HMT Revenue Bonds”

The legalese says the $200 million is an estimate, not a cap and puts stadium borrowings on the same funding stream that a Citi consultant projected would produce bond proceeds of $360 million. Even more critical is that those funding assumptions are terribly conservative, given the extraordinarily lower interest rates are available to Atlanta than the 4.15% rates used  and that Hotel-Motel tax revenues are currently up 7.49% over last year.

Second Down –

Tipped Ball  #2 –  No one is explaining a $612 million cash gap in Hotel Motel tax funds ($211 on a debt funding basis) over the “$200 million cap” and fully funded O-M accounts (which are being ignored as a public contribution)

A key Citi presentation of June 2011, secured by, was integral to the planning of the stadium agreement. This agreement used the 2.7% annual growth rate in H-M tax revenues and it showed the debt service required at then-existent rates for $360 million in debt. If the debt is reduced to $200 million, where debt is to be “capped,” it leaves $612 million in cash outlays unaccounted for, or $210 million in estimated bonding potential. These public funds are being pretended out of existence.

The legal summarycontains this bombshell about the extra funds: “City would agree that all HMT revenues not required under the Funding Agreement to provide for the payment in full of the HMT Revenue Bonds (including appropriate reserves) shall be deposited with a separate GWCCA HMT Fund Custodian, where such funds shall be applied to pay for any costs relating to the construction and operation of the NSP, as provided in the HMT law.”  In other words, excess funds can go into stadium construction that are over and above the $200 million cap.

 Third Down –

Tipped Ball  #3 –  The $186 million that the Atlanta agreement puts into “other event staging” through FY 2051 is to make up for the much, much higher costs the Falcons plan on charging as stadium managers than GWCCA did, isn’t it?

This one might tip off the public and Atlanta City Council thatStadCo will be responsible for the cost (to be identified) of providing its staff and other support that historically has been provided by GWCCAThey might awaken to the fact that Falcons costs as stadium manager are required to be built into all GWCCA events, GWCCA legacy events and Atlanta hosted events – events that now account for nearly 60% of Dome attendance! There are indications that Dome legacy events might be “not on economic terms” after the Falcons take over. Having to allocate $186 million to “other event staging” to make the existing venues and events viable reveals a controversial truth about the contract – the GWCCA won’t be staffing the stadium and will have to pay the Falcon’s cost structure, which may be considerably higher. (GWCCA’s consultant having already predicted 20% (after tax) ticket price increases and 44% concession price increases) Having to inject $186 million to make your own events “economic” after the Falcons take over isn’t a surprise to Atlantans?

Fourth down, Arthur, but don’t sweat it –

Tipped Ball #4 The Falcons only agree to pay that which the public contribution cannot be “maximized” to cover, not $700 or $800 million.

The Atlanta agreement says,All NSP costs in excess of the Public Contribution to be paid by StadCo” (the Falcons). Worse it says this about handling of funds when the bonds are sold in August 2013: “Invest Atlanta shall issue the Hotel Motel Tax (“HMT”) Revenue Bonds and StadCo shall establish an account into which its contribution will be deposited. ” This doesn’t even set an amount or a requirement that any money be deposited by the Falcons, only that an account be established! Beyond this, crafty lawyers restricted Falcon responsibility to “NSP Costs” which are established by a maximum price. The trouble with this is that an increase in the “maximum price” (which can change throughout the project) is not necessarily a change order for which the Falcons are responsible.


Expect the great Falcons special stadium team to pick up the tipped ball and run in for the score. The officials will push the ball carrier across the goal line. “Whatever it takes” is the Georgia and Atlanta politicians’ motto.

After the victory is scored, the Falcons can proceed into the construction phase of revenue enhancement, where the next $50 million to $100 million in public funds lay waiting.

Why not make the full agreement open for public scrutiny instead of just the legal summary? Why not make this process easier on all concerned and just ante up another $250 million that is perfectly justifiable under sound strategic planning and will make this project palatable to the public?

Another $250 million from the Falcons remains a bargain, Arthur.




Update: The Atlanta City Council has since voted to approve the Flcon’s New Stadium Project

Video: Augusta Commission Committee Discusses Heery/Dukes Contract

Tuesday, June 11, 2013
Augusta, GA
From Reports
Contributions were made to this article by Al M. Gray, President of Cost Recovery Works, Inc., a provider of Cost Avoidance and Cost Recovery for America’s leading companies, businesses and governments desiring Superior Returns.
An Augusta commission committee gave no recommendation to proceed with the multi-million dollar contract with Heery International yesterday, deadlocking at 2 to 1. Marion Williams and Wayne Guilfoyle voted not to proceed with extending the contract as-is. Grady Smith and Corey Johnson voted in favor of extending the contract “as-is”. was there yesterday and got exclusive video of the meeting including where Cost Recovery Specialist Al Gray challenged Heery officials. You can watch that video below.
You can also see our most current investigative piece concerning the Heery saga:

Special Report: No R.W. Allen GuaranTEE?

Originally posted on CityStink
July 25, 2012
Augusta, GA
By Bradley E. Owens
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.
Augusta Today member Dean Klopotic submitted a Georgia Open Records Request seeking the R.W. Allen LLC (RWA) billings for the Tee Center related contracts they are performing. The Law Department of the city of Augusta issued a response which included RWA invoice number 24 representing costs through March 31, 2012. Our investigating team has since obtained RWA invoice number 26 from other sources in city government and turned the documents over to cost recovery accounting specialist Al Gray for analysis and review.
RWA boasts of having an “Open Books Policy” but their Tee Center project manager Jim Cely declined to allow us to visit their offices to view supporting documents to the billings obtained through the Georgia Open Records Request.  RWA CEO Rick W. Allen, currently a candidatefor Georgia’s 12th Congressional District, had previously pledged to allow Mr. Gray access to the billing detail records. Despite being assured they would cooperate we were not allowed to see the documents and instead, Cely gave instructions to direct inquiries to Augusta Administrator Fred Russell….the same Fred Russell who has displayed a pattern of withholding VITAL information from Augusta Commissioners on the TEE Center and its companion parking deck across the street.
The Tee Center Contract with R.W. Allen LLC is a Construction Manager at Risk guaranteed maximum price (GMP) contract. Under a fast track, a cost plus contract with a GMP, the Construction Manager sets its fee, general conditions (overhead) expenses, and other costs necessary to construct a total facility.  These contracts are or can be comprised of multiple subcontracts and work with the CM (RWA in this case) self-performing portions as if they had been subcontracted. In other words, they can hire themselves to do certain parts of the job as the Construction Manager.
Once the drawings and design work is 75% complete the GMP was officially set at a price of $29,700,000 and accepted by the Augusta Commission. There have been two change orders (“change orders” are contract modifications which usually are increases in the cost of the fixed price cap due to unforeseen “changes” that affect the construction itself) executed which bring the total price to $30,113,215.  So as you can see, the agreed upon price of the TEE Center construction was $29,700,000.00 but due to the two “change orders” the final projected price tag (there could be more change orders before it is completed so I say “projected”) is now a cool $30,113,215.
Since the more detailed supporting documents for RWA’s invoices (which are pretty vague) are not likely to be in the possession of the Augusta government and therefore open records accessible and the honcho over at RWA, 12th District candidate R.W. Allen, has already broken his pledge to allow us access to the documents (a politician breaking a pledge to the tax payer? SAY IT ISN’T SO!); here are the questions we would pose to Mr. Russell and to Program Manager Heery International to find out the details of these invoices for us, the lowly tax payer footing the entire bill of $30mil and change.
Has there been Double Billing of General Conditions Costs?
Let’s be clear here, these are complicated contracts but the billing is not if you are willing to bear with me and see the questions we are asking.
Article 7.4.1 sets out the components of the contract price and these are repeated in Exhibit A in the contract. to be paid by Augusta, so a cost has to fall into one of those two categories and be authorized by the terms of the contract to be billed. To cover the contractor’s overhead costs, called “General Conditions” in construction language, RWA put in a General Conditions Guaranteed Maximum cost of $1,082,670 in the contract and in Exhibit G.
The capped GC cost is described this way on page 56: Items that are included within the General Conditions Costs for which the Construction Manager is entitled to no additional compensation include without limitation:…..viii “That portion of insurance GL and Auto Builders Risk and P&P bond premiums that can be directly attributed to this Contract for Construction”…..ix. Fees and assessments for the building permit and for other permits licensesand inspections for which the Construction Manager is required by theContract for Construction to pay.
Looking at the latest payment application available, on line 2 of the Form G703 appearing on page 2,
we find an amount listed for General Conditions costs of $1,082,475, which is only $195 less than the stated limit in the contract. Augusta is making progress payments, which total $697,917 (less 5% retained by Augusta) through this invoice, based upon component invoicing and RWA labor charges. In addition to the GC costs, we found $167,585 charged on page 2, line 19 of the G703 schedule for P&P Bonds.
Based upon the contract having capped GC costs to INCLUDE the P&P bonds, separate invoicing in this manner appears to be a duplicate charge, especially since the contract also says this: “The overhead and profit component for any change includes the cost of bonds and insurance”which seems to preclude the additional billing of P&P bonds separately in this manner. The P&P bonds for the subcontractors are in their OWN costs.
Besides the P&P bond issue, there is the same issue with the $48,961 of permit costs on line 18 of the payment request.
These two issues relating to costs billed separately that appear to be already covered by capped General Conditions total $216,546. It is recommended that these costs be reallocated against the capped GC costs of $1,082,670, or line 2 on the G703 billing schedule of values.
Extension of General Conditions without Required Change Order?
Accompanying payment request number 24 was a document entitled “Augusta TEE Center Contingency Log” which includes a $16,393 item labeled “extended builders risk cost due to delays. There was an invoice supplied showing the builder’s risk policy was being extended to October 2012.  ”The contract says this – All adjustments in compensation or extensions of time shall be by change order (page 38)”
No change order was found to extend the duration of the project, so shouldn’t this charge be covered by the capped General Conditions that includes builder’s risk insurance?
A much more important and broader issue, is whether RWA intends to collect extended general conditions for the approximately 6 months greater time until completion of the project to include the more costly GC costs, like supervision. The project duration in the contract was set at 24 months, yet the project is on the 26th monthly billing.
Does the charging of builder’s risk premiums for project delays mean that there will be a costly claim for extended General Conditions at the end of the project? Will extension costs be continued to be charged against the contract contingency, instead of being authorized by change order, as the contract apparently requires?
Lack of Pricing Details limits Change Order Price Analysis?
Augusta Today and City Stink contributor Lori Davis submitted a Georgia Open Records Request on another matter concerning the TEE center kitchen equipment that was added to the RWA contract as Change Order 1 to increase the Contract Price to a total of $29,276,987. Included in the information provided  was the pricing from the subcontractor, itemized by equipment price, but unsupported by cost versus overhead and profit analysis of the pricing.
The contract says this in Article 15:“If and to the extent the change involves work of one or more subcontractors the overhead andprofit component for subcontractors shall be fifteen percent 15 and theoverhead and profit component for the Construction Manager shall be seven percent 7 of the amount allocable for subcontracted work.”
Unless there is additional analysis not presented with the City’s response to the GORA request, how can RWA tell whether the 15% limitation on overhead and profit has been met with respect to Change Order 1? Is sufficient cost information being obtained on other project changes to meet the contract limitations on combined overhead and profit?
Construction Equipment Rentals in Steel Costs?
Within the supporting backup for Payment Application 24 for the steel cost category was an invoice to RWA for construction equipment rental.  The contract has this inclusion within the definition of General Conditions costs: “xviii Rental charges for temporary facilities and for machinery equipment and tools not customarily owned by construction workers”
Since the equipment rentals seem to be within General Conditions (Overhead), wouldn’t such costs be covered by the allowed 15% overhead and profit markup allowed on work self-performed by the Contractor?
  1. Aren’t $216,546 of bond and permit costs separately billed also within the capped General Conditions expense in this contract?
  2. Did the billing of $16,393 for extending insurance coverage to October 2012 presage a claim for an additional number of months of general conditions expense, including Contractor Supervisory labor, and unforeseen costs.? Without a change order, should this item have been charged to contingency?
  3. Is there sufficient cost detail provided by subcontractors to assure that contract limitations on maximum, combined overhead and profit can be verified?
  4.  Are construction equipment rentals separately billable from overhead and profit markups?
  5. Will Augusta review the contract to assure that all contingency and allowances are recaptured by the city at project completion on this major contract? Others?
We expect that the Mayor and the City Commission will assure that these questions are answered.***

**Augusta Today members Al Gray, Lori Davis, and Dean Klopotik also contributed to this report**
**Below is the GMP Construction Contract between RW Allen Construction on the city of Augusta for the TEE Center:
RWA GMP Contract

Special Report: A TEE Total Mess!

Making a Hash over $1.3 Million Kitchen Equipment

Originally posted on CityStink
Thursday, June 21, 2012
Augusta, GA
By Al Gray
The author, Al M. Gray is President of Cost Recovery Works, Inc., a provider of Cost Avoidance and Cost Recovery for America’s leading companies, businesses and governments desiring Superior Returns.
In the waning weeks of Winter 2012, Augusta Today contributor Lori Davis submitted an exploratory, wide ranging Georgia Open Records Act Request
for the City of Augusta’s payments under major contracts. The documents response was massive. Deep in the supporting subcontractor billings to the R.W. Allen, LLC contract for the Tee Center was a most intriguing invoice from Norvell Fixture and Equipment Company showing that $199,656.00 of kitchen equipment as work completed and an additional $76,289.25 worth was stored, for a total billed and paid of $275,845.32! (less 10% retainage). The contract total for kitchen equipment is a surprising $1,329,418.00.
Why was this invoice noteworthy? There was no detailed partnership agreement executed between the City and its Tee Center Partner and Manager, Augusta Riverfront LLC going into the contracts for construction, leaving the last word on the partnership being the unsigned, undated August 2007 Term Sheet. Repeated references to kitchen equipment are pretty clear that such equipment are the responsibility of the LLC, including this: “Augusta’s Capital Funds shall specifically not be used for items related to Kitchen Equipment, Laundry Equipment, and any Convention Center or Hotel capital cost.” Similar language making the LLC responsible for Kitchen Equipment remain within the executed 1999 Core Agreement of record in the Offices of the Clerk of Augusta Richmond County Superior Court.
No Augusta Funds are to be used to procure kitchen equipment, when $1.3 million of it is under contract?
During negotiations that have not yet produced a signed partnership agreement there was certainly a commitment for Augusta to construct new kitchen space within the Tee Center and relocate the combined kitchen from the existing Convention Center. That had no impact upon equipment ownership. Real property improvements and tangible personal property, such as equipment, are different.
In order to advance the investigation, Augusta Today member Dean Klopotic submitted a follow-up GORA request seeking the most recent R.W. Allen LLC billings under the Tee Center Contract. The City responded with Progress Billing Number 24, covering costs through March 24, 2012, including Kitchen Equipment Invoice Number 6, through March 20, 2012.
The details show $792,984.52 equipment work completed, materials stored of $162,544.34 and a total billed of $955,528.86, less 10% retainage. The R.W. Allen monthly invoice shows no additional kitchen equipment stored. Both Construction Manager and Subcontractor show most of the kitchen equipment as work completed.
At 11:00 AM on Thursday, June 7, Barry White of the Convention and Visitors Bureau conducted a TEE Center tour, which was attended by Ms. Davis and this writer. Project Manager Jacques Ware of Program Management firm Heery International would not permit the use of a video camera, suggesting that we come back for the Media Tour to be held Thursday June 14.
When the entourage reached the second floor of the TEE Center, the empty space was pointed out where the kitchen is to be located. At that juncture, an inquiry was made about the kitchen equipment invoiced back in December. Mr. Ware said that he didn’t authorize payment for a kitchen equipment invoice, asking what kind of equipment was on it. This writer responded “ a number of tilting kettles and ranges,” then pondering out loud if they might be stored. Mr. Ware said the only kitchen equipment there would have to have been “for the Marriott.” (The Marriott is owned and operated by Augusta Riverfront LLC.)
An email request to Mr. Barry White to be included in the Media Tour on the 14threceived no response. Other attempts were made to get a separate tour along with one or a group of commissioners to investigate the matter. Commissioner Joe Jackson had just returned from vacation and could not schedule a tour in the next week. Commissioner Bill Lockett managed to get the Heery project liason to get permission to join another June 14 tour, only to see it canceled after several hours.
Commissioner Wayne Guilfoyle was provided with a copy of Kitchen Equipment Invoice on the morning of June 20, whereupon he sought explanation of where the kitchen equipment is from Program Manager Heery International, receiving assurance that the materials were “either stored or installed.”
It is fairly common practice to bill stored materials. There is clear language on billing documents that they are “Materials Stored on Job Site (Invoices if Required).”
Where does the situation stand? What are the issues?
Issues and Questions
  • Where is the Equipment that Augusta paid for?
  • Has Augusta Riverfront LLC been relieved of its responsibility for the purchase of kitchen equipment? If so, where? If not, is Augusta being reimbursed for the $1.3 million cost?
  • If the Kitchen Equipment was delivered and used in Conference Center operations and events ($955,528.86 having been delivered, installed or stored prior to the Masters upswing in events) where is the accounting for the revenues?
  • Without an Effective Date having been established for the successor catering agreement, where does accountability lie, especially since Augusta Riverfront LLC’s Paul Simon having declared the Tee and Conference Center merged months ago?
  • Why do both the R.W. Allen and Norvell Fixture and Equipment Company invoicing show the equipment as “Work Completed” if the equipment is “Stored?”
  • Should Augusta have paid for nearly a $million of equipment months before it is installed in the new kitchen?
  • Why does the invoicing include future charges for repairing Augusta Riverfront LLC equipment? Whose equipment will it be after Augusta repairs it?
Commissioners Joe Bowles, Joe Jackson, Wayne Guilfoyle, and Bill Lockett have provided Augusta Today and with substantial cooperation in this investigation and report. The public can feel confident that these gentlemen will pursue this matter to a conclusion.
Several of them need to participate in a tour and inspection of the paid-for kitchen equipment. Perhaps the city’s internal auditor can vouch for the accountability of the equipment, including verification of delivery documents to a storage facility before the dates that the invoicing was submitted.
It is hoped that all will aggressively protect the interests of the citizens of Augusta and seek wise counsel as they deal with the aftermath of the total mess that the TEE Center currently represents.*** Stay tuned, more to come.