Construction management and program management provided on a "for-fee" basis has seemed to die several dramatic deaths over the past 15 years. But it's still here and even thriving, despite a shaky economy and market turmoil. Many agency CM firms that have seen storm clouds gathering over the market have simply opened their umbrellas and continued on with business.
"The markets have been down recently, but CM firms seem to be bucking the trend," says Bruce D'Agostino, executive director of the Construction Management Association of America (CMAA), McLean, Va. He notes that agency CM continues to have a strong following in the public sector, particularly in the hot education market. "Bond issues continue to pass and so the money is there," he says. "People talk about the infrastructure reconstruction needs in Iraq. They should look at the infrastructure reconstruction needs here at home."
Agency CM/PM work continues apace. "Ten years ago, general contractor-CM became big and people thought it was the end of agency CM. Then design-build came along. Then the recession. But we're still here," says Mansour Aliabadi, CMAA president and CEO of Vanir Construction Management Inc.
But other sector watchers worry about how state and local financial pressures will affect market viability. "About 46 out of 50 states were having budget problems," says Blake Peck, executive vice president of McDonough Bolyard Peck.
Even so, CM practitioner certification continues to be a major focus of CMAA. The U.S. General Services Administration, the Army Corps of Engineers and several local government agencies are calling for CM certification as part of their requests for qualifications. "They are setting the bar for certification and we are now getting some interest in the private sector," says Peck.
Vanir is one firm that has taken CM certification to heart. "We decided internally to push to certify project managers," says Aliabadi. The firm has a certification education program and gives PMs time off to study, he says. It also gives bonuses and promotion preferences to employees who become certified. Vanir now has more certified PMs than any other CM firm, according to CMAA.
One interesting sector development in 2002 was the June acquisition of Hanscomb International, Atlanta, by Atkins, a U.K.-based engineer-constructor (ENR 7/1/02 p. 7). Atkins immediately merged Hanscomb into the Princeton, N.J.-based operations of Faithful & Gould, the U.S. subsidiary of the British firm.
"Hanscomb has traditionally focused on the buildings side, while Faithful & Gould has a strong practice on the industrial side, in oil and gas, pharmaceuticals and food and beverage work," says Paul Reimer, a Hanscomb executive who is now co-chief operating officer with Chris Taylor, who comes from the F&G side.
So far, the merger has worked fairly well. "The relationship between the two firms has been very complementary," says Taylor. "We have found we have the same skills, but different client lists." In 10 years, F&G had built its U.S.-based CM practice to where it employed about 100 staffers. The marriage was easier after Atkins agreed to stop using Atkins HF&G as the company name. "Atkins has a great name in Europe," Reimer says. "But we are using our own name here in the U.S. because of its brand recognition."