By Stefan Schumacher
Owners are looking for low bid or design-build on their
projects. As a consequence of the recession, they are under
pressure to get the lowest possible price on a project. This is
according to a recent study from FMI, a consultant to the
engineering and construction industry.
So where does this leave the architect? Do you feel you're being
cut out of projects in favor of design/build alternatives? If so,
how does the architect prove his or her value to a prospective
client?
Email me at sschumacher@moderntrade.com.
Check out the study for more details:
The latest research study "Win-Win: Project Delivery in a
Recession and Beyond" from FMI, the largest provider of management
consulting and investment banking to the engineering and
construction industry, found that the recession has at least
temporarily changed the momentum of the trend toward greater use of
collaborative delivery methods in favor of low-bid or
design/bid/build.
Contractors especially warn that this changing trend may have
repercussions in raising the "cost of conflict." With more
contractors chasing fewer projects, owners find themselves in a
buyers' market for construction services. Under pressure to get the
lowest price for their project, owners are looking for the lowest
bid, and often that means a greater use of the traditional
design/bid/build delivery method.
In this new study of construction delivery methods, FMI asked
both owners and contractors about changes in delivery methods since
the recession. One conclusion of this study is that a solitary
focus on low-bid doesn't always mean lowest overall project cost.
However, owners are under pressure to do more for less. According
to both owners and contractors, recessionary pressures could be a
setback for greater collaboration and cause greater conflict
pitting owners against contractors in the bidding game. For
contractors, it is still an uphill climb to reduce the perception
that low price is the most important factor in construction
procurement. While all owners seek the best value for their capital
investments, many understand that greater collaboration leads to
more project success. In a low bid environment, it is likely that
more contractors will go bankrupt. Those that survive will be more
productive and efficient in low bid markets and make better use of
collaborative and partnering methods to deliver best
value.