Kwame’s Tony Thompson: “When Being Right is Not Enough”

Tony Thompson, president of Kwame Building Group, offers a cautionary tale for all service providers in the St. Louis construction industry: Even if you do all the "right" things, he said, the inherent risk in today’s construction industry could cost you your business and/or your piece of mind. 

Thompson, who guided his company through the recent Metrolink extension project lawsuit, spoke before the June meeting of the Midwest Council, American Subcontractors Association on his experience at managing his company through the storm.  He said he was there to tell the subcontractors and suppliers in attendance about what happens “when being right is not enough.”

Thompson founded Kwame in 1991 as an advocate for owner interests through cost estimating and management services. “If we can’t save you our fees, don’t hire us,” he said.

Thompson drew applause from the subcontractors and suppliers in the room when he said that he stood on his firm’s capabilities rather than playing the minority card. Thompson holds a Masters Degree in Civil Engineering from Washington  University and bachelors degrees in  architectural engineering and environmental design from the University of Kansas. Prior to forming Kwame, he served as project engineer for Anheuser-Busch Companies, as a mechanical engineer at Monsanto Chemical Company, and as a construction engineer for the U.S. Army Corps of Engineers. “How am I disadvantaged?,” he asked.

The lawsuit between Metro and the Cross County Collaborative involving the MetroLink extension project from Forest Park to Shrewsbury resulted in a complete victory for the defendants, Cross County Collaborative (CCC), on all counts. The jury returned verdicts in favor of the CCC and against Metro on all counts in the Metro litigation. Cross County Collaborative received more than $2.5 million on its claims of breach of contract. Metro was seeking $81 million in damages over delays and costs associated with the extension.

The CCC won a judgment for attorneys’ fees and court costs. Thompson said that he had not signed over his interests in the lawsuit to the partnership, the legal expense still would have put his firm out of business.

The members of the partnership each carried $8 million in professional liability insurance. But Larry Salci, the executive director of Metro who drove the lawsuit contended fraud on the part of the partnership, which voided the liability protection.

The Cross County Collaborative was the construction group in charge of the $550 million light rail project, which opened in 2006. Metro officials, led by Salci, fired the collaborative in August 2004 before filing suit against it in St. Louis County Circuit Court, alleging fraud and mismanagement of the project. The extension was more than a year late and about $128 million over its original budget, according to Metro.

The Cross County Collaborative, which includes Parsons Brinckerhoff Quade & Douglas Inc.; STV Inc.; Jacobs Civil Inc.; and Kwame Building Group, countersued in November 2004, seeking $17 million for work it said it completed for Metro but for which Metro never paid. All except Kwame are international firms, with operations in St. Louis. Parsons Brinckerhoff and STV are based in New York. Jacobs is based in Pasadena, CA

Metro, in its suit against the Cross County Collaborative and its member companies, alleged they defrauded the agency in part by submitting incomplete design documents, which allegedly they concealed and that ultimately led to the cost overruns.

Thompson said that the lawsuit contended that his firm had produced bad cost estimates, but he said that Metro did not produce a single example during the trial. Thompson said that Metro claimed that the CCC's mismanagement of scheduling issues such as utility relocations adversely affected the cost of the project, but that Metro’s own organization chart for the extension showed Metro employees at all the key control points. “There was nothing ever done that wasn’t dictated by Metro,” Thompson said.

Thompson challenges the commonly-held notion that it is important to document everything. Documentation – particularly email – can come back to haunt you when things go wrong, he said. Thompson said that during the trial the CCC's attorney produced emails showing that shortly after a Metro executive had attended a construction fraud conference a plan was developed to accuse the CCC of fraud and fire it.  He said that Metro even produced critical path chart of the activities needed to accomplish that objective.

Thompson said that during the trial,  “I slept like a baby. I woke up every hour, kicking and screaming.”  Kwame cut staff, tightened management procedures, and put Thompson on the road selling work in other parts of the country to survive. Colleagues in the St. Louis construction industry were empathic, Thompson recalled, but were not going to hire Kwame while the trial was under way.

In the end, Thompson said, his business came out of the experience stronger, better run, and more profitable. He said that he has moved on from the experience, for the most part.

“Forgive and forget… but remember their names,” Thompson said.

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