Owners Seek Front-End Guidance While Expecting Protection from Risk
 |
This growth is evident in the revenue totals of ENR’s Top 100 CM-at-Risk Firms. In 2004, the Top 100 had combined revenue of $54.29 billion, up 6.6% over its $50.94 billion in 2003. The domestic proportion of that revenue total last year grew 5.2% over the previous year, to $48.53 billion, while the international slice of was up a whopping, but not surprising, 19.7%, to $5.77 billion.
"What you’re seeing is that program management and construction management are growing rapidly overseas," says Bruce D’Agostino, executive director of the Construction Management Association of America, McLean, Va. "We’ve been to meetings throughout Europe and Asia, and they are clamoring for the kind of CM certification program that we’ve developed at CMAA."
| The 2005 Top CM Firms, Top Design-Builders and Top Program Managers are free to ENR subscribers but each can be purchased for $14.95.
|
At home, the continuing repeal of state laws and regulatory barriers to use of alternate project delivery is a major factor in the growth of CM-at-risk. Last month, Minnesota Gov. Tim Pawlenty (R) signed S.F. No. 1335, a new law permitting state agencies and the state college and university system to use design-build, CM-at-risk or job-order con- tracting on any major building project. "There are now only about six states that restrict the use of design-build and CM-at-risk on public projects," says Bob Cutshall, vice president of Ryan Cos. US.
While design-builders are celebrating this legislative victory in Minnesota, CM-at-risk firms there are hoping for the same type of public project windfall that firms in Arizona saw after a similar law passed there a few years ago, Cutshall says. "Now, about 90% of the state work under that law is being done CM-at-risk," he contends. "I have no idea why they lean so heavily toward CM-at-risk, but they do."
Ryan Cos. provides both design-build and CM-at-risk services. "There’s a lot of CM-at-risk in the public sector," Cutshall says. But some private sector clients also prefer the approach. "We do an awful lot of work for Target Stores, and it’s almost entirely on a CM-at-risk basis," he says. Ryan is now working on a major Target distribution center in the Atlanta area.
One of the biggest gainers on ENR’s Top 100 list is Hoar Construction, based in Birmingham, Ala. "We’ve been doing a lot of CM-at-risk work for both secondary and higher education," says Robert Burton, Hoar’s president. "School districts are getting frustrated at the old hard-bid contracting process and want someone in there early by their side to manage things better."
One major client of Hoar that needed such assistance was not a school district. but the Birmingham, Ala., municipal zoo. "It doesn’t do a lot of building, but when it does, it’s usually a big and extremely complex project," says Burton. Hoar’s most recent job for the zoo was a new children’s addition, called the Alabama Wilds. "It’s phase two of a major program there," Burton says.
Another major Top 100 gainer is Konover Construction Corp. Much of its success has been in the K-12 schools and university market. "A lot of school clients are tired of hiring a low-baller general contractor only to get hit up with constant demands for change orders," says CEO Michael Kolakowski. He also notes how school districts are often put in a position of having to answer to state education agencies for cost overruns. This has led to increasing reliance on CM-at-risk firms, he says. Konover is working on a $68-million expansion of the North Haven High School in North Haven, Conn., using CM-at-risk.
Kolakowski says the market has really opened up just in the last 60 days. "We are also seeing a new trend in lifestyle centers, akin to open-air shopping centers," he says. Ironically, these lifestyle centers seem to be popular in the chilly and snowy Northeast. "I suppose Northerners are just used to shopping in any kind of weather," he jokes.
click below for related links: