James, project manager for a large building company in southern Oregon, told Session 3B of the Leadership Development Lab:

"During the late 1980's we build Streisinger Hall, a research laboratory on the University of Oregon campus in Eugene, Oregon. The design included the installation of an elaborate system of fume extraction ductwork. The interior of this ductwork was to have a special coating (to resist acids). The process required careful sandblasting to a certain etch depth prior to application of the coating.

Our mechanical contractors' agreement included providing all of the coated ductwork and installation.

During the course of installation, we noticed that some of the coating was failing. When we brought this to the attention of the owner of the mechanical contractor firm, he brushed off our inquiries. He insisted that the paint was being applied in accordance with the manufacturer’s recommendations. "As more ductwork was installed, it became apparent that this quality variance was turning into a major issue. We were able to easily peel off whole sheets of coating from the ductwork. As we increased our pressure on the subcontractor to explain how he was going to correct this problem, we were always brushed off. On one occasion, the University inspector and myself visited the mechanical contractors shop to check on their sandblasting methods. We were pretty sure that little or no sandblasting was being performed on the metal prior to coating. The owner produced a sheet of metal sandblasted perfectly to the required etch, indicating this was a sample of metal he had sandblasted. We later found out that this was a sample that had been provided to the subcontractor as an

example of the degree of metal preparation needed for the coating to adhere.

We determined that the contractor was intentionally "skimping" on the metal preparation, in spite of the coating failures. My supervisor and I discussed our next step. We had to correct the situation before the project was further damaged, so a "stop work" order was given to the mechanical contractor and the general I worked for to remove newly completed ceilings to allow removal of the entire ductwork system. We then hired a local sheet metal contractor to build new ductwork. The pieces were sandblasted (the degree of etch monitored continuously by myself) and coated. The new ductwork system was installed and the ceilings replaced.

The mechanical contractor sued us and the University. In the end, his bonding company reimbursed our company for all damages. "The lessons I learned from this experience is that no one can build a company on a foundation of corner-cutting workmanship and fraud, as the mechanical contractor was attempting to do.

The action I call you to take is to thoroughly evaluate all situations. If you are on firm ground, correct in your evaluation of below standard performance, take the bold steps necessary to mitigate the problem. The benefit you will gain is you will grow from a performance record you can be proud of and your firm will attract repeat and referral business."