But even as CM and design-build continue to increase their presence in the market, they have reached a level of maturity where they are subject to the broader market trends. The numbers for ENR's Top 100 Design-Build Firms reflect this. Despite the increasing acceptance of design-build among owners, particularly in the public sector, revenue for the Top 100 Design-Build Firms fell 8.0% in 2001, to $47.86 billion, from $52.01 billion in 2000. This is a reflection of a general fall-off in the international market. In the U.S., revenue for the Top 100 grew modestly from $36.34 billion in 2000 to $36.49 billion in 2001.
The ENR Top 100 CM-for-Fee Firms experienced a similar pattern. The Top 100 CM-for-Fee Firms saw their revenue decline 0.8% in 2001, to $5.60 billion from $5.65 billion in 2000. As with the design-build firms, the markets abroad were responsible for the drop, as international revenue declined 12.0%, to $1.45 billion, in 2001. Agency CM revenue rose 3.6% domestically in 2001, to $4.15 billion. It was the "pure" agency CM firms that led the way among the Top 100, increasing their revenue by 23.3% last year over 2000.
The real winners in 2001 were the Top 100 CM-at-Risk Firms, as owners increasingly sought to transfer risk. This group took in $50.69 billion in revenue in 2001, up 10.8% from $45.74 billion in 2000. Following the industry pattern, international CM-at-risk revenue for the Top 100 fell in 2001 by 15.6%, to $2.86 billion. But domestic revenue continued its double-digit growth, rising 12.8% in 2001, to $47.83 billion.
Experienced CM and design-build firms have long complained that anyone with a board and a bucket of paint can hang out a shingle proclaiming that they are a CM or design-build firm. But their respective national organizations are placing increasing emphasis on providing objective standards for owners to use to judge the experience and abilities of construction firms.
The Construction Management Association of America, McLean, Va., has responded by expanding its certification program, says Bruce D'Agostino, CMAA's executive director. "The problem is that anyone with a pickup truck can call himself a construction manager," he says. So CMAA is placing an increasing emphasis on its certification program to distinguish the wheat from the chaff in CM.
While CMAA's certification program has existed for 10 years, "it only became fully active a few years ago," says Blake V. Peck, executive vice president of McDonough Bolyard Peck, and president of CMAA. He anticipates 200 certified CM execs by the end of June. The process, which can take from three to six months after application, requires a practitioner to have 48 months of management experience on a project, says Roger Woodhull, vice president of DMJM/Holmes & Narver. "Having four years in responsible charge is tough and different from other certifications," he says. He says the Project Management Institute has no such requirement for its certification.
CMAA hopes that the certification will grow as a contracting incentive, perhaps even to a requirement. Peck says that General Services Administration and the Army Corps of Engineers had included CM certification as a prerequisite in recent procurements. But these were eventually pulled after bidders complained that the current low numbers of certified managers was a competitive disadvantage. "We hope to hit 1,000 certified CMs in a few years," says Peck. "We want to make it a discriminator that forces you to remember good professional practice." But he admits the profession still "needs critical mass. We still spend a lot of effort having to verify our experience," he says.
Design-build firms also are concerned about how to demonstrate their level of professionalism in the industry. "We've been doing integrated design-build for the past 50 years and yet we still have to work hard to distinguish ourselves from the competition," says Scott Ransom, president of Marshall Erdman & Associates.
To help answer such concerns, Washington, D.C.-based Design-Build Institute of America recently unveiled its own certification program. "Owners had complained that they have no way to determine the qualifications of firms in design-build," says Jeffrey Beard, DBIA's CEO. The group will begin its certification program with its first exams in October. "Just to get to the exam, you will have to demonstrate your experience, provide references and take a series of courses," he says. "We came to the conclusion that if you don't self-regulate, someone will try to do it for you."