The 2004 revenue total for The ENR Top 100 fell 2.8% from the previous year, to $47.22 billion. On the domestic side, this group had an even larger 6% falloff from the previous year, garnering $30.56 billion in revenue versus the 2003 total of $32.51 billion. International revenue softened the blow somewhat, up 3.8% to $16.66 billion in 2004 from $16.05 billion the year before.

Revenue falloff among some large engineering-procure-construct firms fueled the overall decline. Most notable was Foster Wheeler Corp., which saw its design-build numbers fall from $2.72 billion in 2003 to $1.11 billion in 2004. The sale in 2003 of its environmental group to Tetra Tech was a key factor as was the parent firm’s overall revenue decline as it struggles to recover from losses.

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Other big design-build revenue declines were noted by The Shaw Group, which fell from $1.3 billion to $590 million; ABB Lummus Global, down to $553.9 million from $1 billion; and Parsons, whose numbers were down from $1.4 billion in 2003 to $986.7 million last year. A key factor in the declining Parsons numbers is that it no longer reports revenue for Parsons Energy & Chemicals, which was acquired in 2004 by Australia’s WorleyParsons. Without these firms, design-build revenue rose a healthy 4.5% in 2004.

Design-build’s success in the recent past has been boosted by increasing acceptance in the transportation market, as states began embracing it. For some firms, that meant major new growth. "As design-build opened up in the transportation market, it was an easy shoo-in for us, since we have our own engineering staff and did design-build for other clients," says Michael Sweeney, director of marketing for Ames Construction Inc.

But the stalled federal transportation funding reauthorization bill may have blunted some momentum in this market as some states have been reluctant to green-light major projects. This may explain the modest declines in design-build numbers for some major transportation firms, including Ames and Kiewit Corp.

On the other hand, other hot markets seem to be embracing design-build with a new fervor. "We are really starting to see design-build in a wider variety of markets than we had in the past," says Michael Kolakowski, CEO of Konover Construction Corp. He says that, while CM-at-risk seems to be the main project delivery system for most higher education construction programs, "design-build seems is the method of choice for dorm projects." Konover is using design-build on a 270-bed dormitory at Wesleyan University, Middletown, Conn.

Another booming market that is embracing design-build is multi-unit residential. "There’s a tremendous amount of multi-family condo work going on," says John McKenzie, vice president for construction for Opus Northwest. One major condo project Opus is nearing completion on is Grant Park, a 328-unit, 27-story mixed use condo project in Minneapolis. "The high-rise is residential, but it is surrounded by low-rise commercial and retail facilities," he says.

In some cases, projects simply could not get off the ground without design-build. Ryan Cos. US is developing and building a major mixed-use project in downtown Minneapolis called The Midtown Exchange. "It’s the site of an old Sears warehouse that had been empty for 16 years," says Bob Cutshall, vice president of Ryan. "There were many proposals to develop it, but you really had to know the costs of renovation and construction before you could commit."

Cutshall says Ryan brought in its design-build team to analyze and design the program before the firm’s development arm finally decided to go ahead with a major mixed-use residential, office and retail complex. "The entire price will be about $180 million, including $120 million in construction costs," Cutshall says. Ryan is handling the construction as well as development, he says.

click below for related links:

  • The Top 40 Program Mangers/Overview | Story  | List  |
  • The 100 Design-Build Firms | Story  | List  |
  • The Top CM Firms | Story  | List  |
  • The Top CM-at-Risk Firms | Story  | List  |


t is said there are three forms of deception—white lies, damned lies and statistics. If there was a place where statistics are not telling the whole story, it is this year’s results of the ENR Top 100 Design-Build Firms. Taken without context, the survey shows a slide in use of design-build in 2004. But that might ring false to those who practice the approach regularly.