Kleinfelder CEO Talks Risk Transfer, Infrastructure Needs
Kleinfelder is a California success story. Since its founding in the City of Stockton in 1961 by Jim Kleinfelder, the engineering, architecture, and science consulting firm has grown from a small single office into a global company with 69 locations around the world and nearly 2,000 employee-owners. This year the company, now headquartered in San Diego, was ranked No. 43 on Engineering News-Record’s (ENR) 2015 Top 500 Design Firms list.
ENR California recently spoke with Bill Siegel, Kleinfelder president and CEO, to discuss the company's California work, current trends in construction engineering, and the outlook for the industry.
ENR California: How is business for Kleinfelder in California?
Bill Siegel: Overall we are doing well in California, but we are finding some uneven results. For example, we are pretty busy in major coastal areas like San Diego and the San Francisco Bay area. But we are finding that things are slower in the lower Central Valley, where unemployment is high and they have water and farming issues.
In San Diego, you have high-tech and bio-tech and tourism and a desirable place to live. In the Bay Area, there is the Silicon Valley with Apple, Google and Facebook. And in the Central Valley, what is the economic driver? It’s farming and ranching, but there's no water. It’s oil and gas, but they are not allowing any fracking and exploration. So there aren't economic drivers there.
ENR CA: What is Kleinfelder’s current slate of projects in California?
Siegel: We currently have approximately 1,700 ongoing projects in state. This means anything from testing and inspection for a commercial office building to the high side such as working for the California Dept. of Water Resources, working on their dams and levees in the Central Valley. We have contracts in San Diego to design and construct big transportation projects. We are working on a number of large projects for companies in Silicon Valley, and in L.A. we have a contract with the High-Speed Rail project.
ENR CA: What are the biggest challenges facing your industry right now?
Siegel: There are two big concerns I want to highlight. The first is a lack of long-term infrastructure funding - that's a critical issue that has to be resolved. So far people are fairly immune to it, but I think it's finally catching up. Think of all the water lines breaking and the pipeline issues that are out there. I believe we are at a tipping point and we have to start spending more money on infrastructure or accept a lower quality of life.
The other issue I think is a big challenge to our industry is the concept of risk transfer, where owners are trying to drive to the contractors and engineers some unreasonable expectations and contract terms. In my opinion. It's hard because as an industry we need to stand up. Owners can't expect us to take on all the project risk without the opportunity for reward at the end of a successful project.