We have all heard the past predictions of when the “bounce” in the construction market would occur. I remember hearing predictions that included the first quarter of ’09 and the fourth. And now, it certainly seems like it’s anybody’s guess. For every encouraging sign — Quadrant announcing it is going to start acquiring land again on which to build houses — there are equally gloomy signs, including that the commercial sector appears to be significantly overbuilt for current needs.
Contractor clients and friends talk about the difficulty of finding work, and that what work is available is being taken at bid prices that approach (if not fall below) what is perceived to be “cost” for that work. In three short years, we have gone from a market in which contractor margins were at their highest in most people’s memory, to an owner’s market in which the few projects available are the target of intense competition, resulting in a great deal for those who have the wherewithal to build in these tough times.
The one trend that has become noticeable lately is that contractors have renewed their investment in trying to figure out how best to weather the current downtime. When the market first turned, attendance at construction seminars plummeted, as companies sought to “cut the fat” from their budgets. Even popular regularly-scheduled seminars that traditionally drew big crowds went wanting, and many were cancelled. But lately that trend has turned around.
Apparently owing to the need to expand traditional bases and become more competitive for the government-funded work that is coming online, seminars dealing with government contracting and alternate delivery methods have become exceptionally well attended as of. A recent seminar on design/build contracting drew more than 160 to a morning conference, where attendees heard from speakers on a variety of topics, both in regard to private and public work design/build methodologies.
Of course there are huge design/build projects on the way like the Seattle waterfront tunnel, and huge ones already under way, like portions of the Brightwater project. But even more, public owners like the University of Washington and Washington Department of Transportation are finding some real success with design/build. And, with both federal and state projects establishing more and more success with design/build, all kinds of firms — contractors, consultants, designers and even owners — appear anxious to know more about how they might compete in that arena.
I was involved in one of the UW’s first design/build procurements in the early ‘90s, which was a very rough experience both for us as the contractor, and for the owner, too. Even though the job was completed and still looks great today, lots of hard lessons were learned, and it soured the UW on design/build for quite a while. But lately, the UW, like other public owners, has renewed its interest in design/build, and completed an excellent design/build/operate project a few years ago which, in contrast to our job two decades ago, has been a real example of what’s possible.
So, while we all look to the horizon waiting to see the first signs of a real “bounce,” that effort might really be helped by those companies that are out trying to broaden their appeal, capitalize on their experience and find new ways to weather this storm.
Tags: Construction jobs