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Business
& Labor
Softening Private Sector Pushes Design-Build to Public Work
(enr.com
- 6/17/02 issue)
By Gary
J. Tulacz
After years of spectacular gains, design-build
revenue flattened out in 2001 for the ENR Top 100 Design-Build
Firms. Part of the reason for this lack of growth has been
a softening in the manufacturing, petroleum and industrial
process markets, along with a fall-off in the commercial building
markets in many areas around the country. But now, design-build
is taking aim at new markets.
The Design-Build Institute of America
is attempting to open up new markets for design-build around
the country. "We are going for targeted outreach for
specific markets around the country," says Jeffrey Beard,
CEO of DBIA. "We started three years ago, targeting transportation,
and have made real progress on that front," he says.
The next target will be educational facilities. "We will
be having a conference in San Diego this December to try to
reach out to local school districts to show how design-build
can work for them," Beard says.
One design-build market that doesn't
need much of a boost is healthcare. "I saw a [consultant's]
study...that showed that design-build accounted for 15% of
the medical market in 1997. This year, that figure is up to
46%," says Scott Ransom, president of Marshall Erdman
& Associates. "We've seen a significant increase
in signings in the past year."
Ransom says that the market for healthcare
facilities is looking pretty healthy over the next five years.
He notes that design-build is being used widely on smaller
rural hospitals designated as critical access facilities that
will provide both in-patient and out-patient services. But
Erdman also has had success on larger medical projects. It
currently is working on a $70-million integrated hospital
and surgery center in Naples, Fla., for the Cleveland Clinic
and a $47-million hospital addition and medical office building
for the Northwest Community Hospital in North Arlington, Ill.
But the commercial office market is
not as healthy and promises to give design-build firms some
pain. "In the speculative market, there is going to be
a need for some vacant space to be burned off before it takes
off again," says John McKenzie, vice president of construction
for Opus Northwest. McKenzie admits that this has caused Opus'
revenue to be off a little. "But we are fortunate that
we have several major built-to-suit projects," he says.
Opus is building a new corporate headquarters for Best Buy
and a $60-million office for U.S. Bank, both in Minneapolis.
The university market also is providing
opportunities in design-build. "We are seeing some design-build
in university housing," says Bob Fortune, vice president
of BBL Construction Services. "That may be because housing
is not too complicated and you can present enough of the design
so clients are comfortable in knowing what they are getting."
Fortune says that BBL is doing a fair amount of student housing
work in the Northeast but points to other opportunities throughout
the country.
Another company that is enjoying design-build
success in the multi-unit housing sector is Swinerton. "There's
a lot of work in university housing and military housing,"
says Jeff Hoopes, executive vice president. But he also cautions
that a lot of what is being called design-build is actually
something else. "Design-build has become something of
a bandwagon, but probably most owners don't understand what
they are getting," he says. "What they are really
providing is a form of bridging rather than a true design-build."
Swinerton is winning major design-build
projects, including the $80-million NORAD U.S. Space Communication
Headquarters at Peterson Air Force Base in Colorado Springs,
Colo., and the $60-million Memorial Student Center at the
University of Arizona.
The public sector has become the brave
new world for design-build. There are legislative breakthroughs
that are aiding public sector design-build procurement. Arizona
now has opened up much of its public sector market to alternative
project delivery, "although most public projects are
going to construction management/general contracting or CM-at-risk,"
says Hoopes.
Minnesota also has passed special legislation
to allow design-build to be used on state projects, the University
of Minnesota and the state college system, says McKenzie.
So, as the market in the private sector has softened, the
public sector, slowly but surely, has moved forward to fill
that gap.
CLICK HERE FOR
2002 TOP 100 DESIGN-BUILD FIRMS LIST
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TOP 100 DESIGN-BUILD FIRMS
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TOP 100 CM-FOR-FEE FIRMS
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TOP 100 CM-AT-RISK FIRMS
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