Many owners are looking to CM firms to supplement their project management staffs, rather than hiring in-house staff, says Reza Amirkhalili, president of Atkins North America/Faithful+Gould. He says owners are keeping a core team in house and using CM firms to supplement their teams or for specific task-orientated work, such as estimating or risk management.

Amirkhalili says owners continue to self-manage their smaller and less complex projects, where they recognize the risks are manageable and only use PM/CM firms to augment their staff, focusing on project controls over costs and schedule. He says owners generally will hire PM/CM firms to manage the entire project only on larger, more complex building programs.

But many executives argue that CM firms should be brought in at the outset of a project. For example, Martinez warns that choosing the appropriate management structure and project delivery method is critical to the success of the project and must occur at the start of a construction program when the owner is in the best position to affect its outcome.

"The owner's ability to intervene to affect the outcome of the construction project is greatest at the beginning of the project, and can gradually reduce to nearly zero by project completion if effective and continual guidance is not interjected by the owner throughout the life of the program," Martinez says.

The recovering market has helped CM firms in an indirect way. When work was scarce, designers and contractors would provide extra services as a means of acquiring a new contract. That practice in slowly fading as opportunities have grown and firms become less desperate for work. "We are seeing a reduction in 'free' services offered by various players in the industry as a form of business development," says Peter Heald, president of Cumming. Owners have to find a way to obtain those services in the marketplace, and they are using CM firms to fill this gap.

Commodity Pricing

Many agency CM firms say that owners continue to press for up-front cost savings. The emphasis on cost has carried over into the program management business. "At Arcadis we're seeing some clients shift away from agency PM/CM in favor of staff augmentation to complement their in-house teams," says John Jastrem, CEO of Arcadis U.S. He says the cost savings of this approach "is debatable."

Many CM firms say this focus on cost is a hangover from the market recession, where low-ball bids were common and owners came to expect more for less. "There's an increasing trend in the industry to see professional services—design or management—as a commodity service," says Philios Angelides, president, Alpha Corp. "The ROI for professional services is not gained through evaluating the unit cost or hourly rate for such services. Instead, it's gained through sourcing those firms who have measurable qualifications and experience."

But D'Agostino says that more owners are joining CMAA specifically to address this issue. "We now have 3,100 owner-practitioners as members." He says that the growth of CMAA, particularly among owners, has been driven largely by the groups CM certification program. "Owners increasingly are demanding that the firms they hire are qualified to manage their projects."

Finding Talent