As it has been for the past two decades, construction project delivery is in a state of nonstop evolution. Construction management (CM) came into its own in the late 1980s, when large corporate project management and engineering departments that ran massive building programs began to break up as owners started to focus more on core missions and shifted responsibility to outsiders. Design-build took off in the mid-1990s as private clients felt new pressure to get product to market quickly and cheaply. Soon after, federal, state and local governments began to extricate procurement from its highly regulated environment and recognize the
Five years ago, design-build project delivery was poised to take over the world. Or at least that is what some proponents seemed to think. But with an industry recession, particularly in some of design-build's critical private-sector markets, the delivery system seemed more likely to roll up than rule. Despite budget cuts and other economic woes among owners, revenue for ENR's Top 100 Design-Build firms still managed a slight gain of 0.3% in 2002, to $55.3 billion. That follows a big slide in 2001 for this niche from its high point in 2000, when firms reported $58.2 billion in total revenue.
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
It is no secret that owners are risk averse, so it should come as no surprise that there is ever-increasing interest in construction management at-risk. CM-at-risk has been a mainstay in the private sector. In New York City, it is the dominant construction delivery system, particularly for commercial buildings. Four of the top five firms on ENR's Top 100 CM-at-risk list maintain their operating headquarters in the Big Apple. What has proven beneficial in the private sector now is being tried on a wider basis in the public sector. Increasingly, legislators are removing roadblocks to the use of alternate project
Faced with a $400-million program of new construction and upgrades for its correction system to meet a federal court order in 1987, the State of Tennessee knew it needed help. So it turned to private industry to provide the extra manpower needed to implement the program. Heery International was one of several companies selected at the time for that job. But the win gave it a foot in the door for a much larger and longer-term role in managing the state's construction activities. In 1991, the Atlanta-based firm won an exclusive contract to oversee construction of all state capital projects
AT THE TOP Longtime CEO Hwang (left) and president likely heir Jaska push business agenda. (Photo courtesy of Tetra Tech Inc.) The young immigrant who came from a Chinese village 300 miles south of Shanghai has done well for himself in America. The engineering firm he has shepherded since 1988 is now a billion-dollar-plus entity with 8,000 people. And the onetime lowest-paid employee at Tetra Tech Inc. pocketed $334,000 in salary last year, not counting other compensation. More than 40 years after Li-San Hwang left the Far East with $100 in his pocket for a civil engineering degree from Michigan
The string had to end sometime. For the first time since Engineering News-Record began measuring performance among environmental consulting and contracting firms eight years ago, the total for the Top 200 has declined. The difference is not much–$32.7 billion in environmental revenue for 2002 compared to $32.8 billion the year before–but it is still down. It was hard to sympathize with those who bemoaned the passage of the boom years of the late 1970s and early 1980s, even while the Top 200 revenue line was growing from $19 billion in 1995 to $32.8 billion in 2001. Somehow the tune rang
Four scheduling experts, all deeply experienced in the critical path method (CPM) that uses math to draw network diagrams of a project schedule, met recently in a restaurant just outside Philadelphia. The purpose was to discuss a new unit at the Project Management Institute, in Newtown Square, Pa. The College of Scheduling they have launched would promote "the fundamentals of project management" and encourage "a free exchange of ideas." One of the reasons for starting the college is disconcerting. What is described as a CPM schedule these days sometimes isn't one at all, the four experts claim. If that claim
The general building market has been in a stall for the past couple years. As the economy floundered, more space opened up and vacancy rates rose, leaving contractors in the broad market wondering what will come next. "The market changes every day," says Peter J. Davoren, the new president of Turner Construction. He notes recent studies of the interiors renovation market in New York City. "In the year 2000, 40 million sq ft of office space changed hands or was renewed on a long-term basis," says Davoren. "In 2002, that figure shrunk to 18 million sq ft. At an average
Civil works contractors did most of the industry's heavy lifting in 2002. While total domestic revenue for the Top 400 contractors slipped 2.9% last year, firms in heavy and highway markets piled up double-digit increases. Despite slowdowns now apparent, firms in 2002 were able to tap strong transportation, environmental and water utility markets for $36.1 billion in reported revenue, a 16.9% increase from the previous year. The transportation market contributed $24.4 billion in revenue for heavy contractors, a 25% increase over 2001's level. Top 400 heavy contractors also reported $2.6 billion in revenue from water utility construction, an 8.3% increase;
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