A Strong Construction Market Is Changing the Pursuit Dynamic
The volume of available work in the construction industry, and specifically the water/wastewater sector, is finally moving on from COVID and the related distribution stress. Moving on doesn’t mean cheaper or easier, it just means that projects are now advancing despite the continued rise in costs, tariffs, inflation, and greater uncertainty in the world. Projects that were $60 million five years ago are unfortunately $95 million in the market today, and while it’s a difficult pill to swallow for government agencies, projects are grinding forward anyway. Pursuits of all sizes in both the hard-bid and collaborative delivery worlds are becoming abundant and backlogs are filling. Companies can now afford to be selective again and with that comes an opportunity for design-builders to actively weigh the pros and cons of available projects before choosing to invest their resources to advance them.
It is well known that clients use market soundings, luncheons, CIP open houses, even the RFPs and RFQs themselves to help them determine if a particular design-build entity, joint venture, or other team is the right fit for the project. Do they know my project? Can they be trusted? How nimble are they in providing solutions and do they have the best solution for my project? What is their project success record? Do they come well recommended by other clients? These are all appropriate and great questions to ask when you are looking to add a critical stakeholder to the group, especially one that is expected to help you manage costs, budgets, expectations, and schedules.
Design-Build Procurement Is a Two-Way Evaluation
What some clients need to understand, however, is that these same processes also provide data to the industry. Flipping the script, proposers are using this information to determine if a project, or more importantly a client, will fit as a good teammate too. Good clients not only have the right answers to similar questions, but they act in a manner that speaks louder than their words, which is evident from their first interactions.
What Design-Builders Look for in a Project Owner
Is the owner open, candid, and good to work with?
How is this owner to work with? Consider how open you are to friendly and up-front discussion. Participate in the conversations and the process. Being all business is not good business.
Will the owner be a collaborative partner?
Can we collaborate effectively with this owner? Consider listening just as much as you speak, if not more. Be open to opinion, vigorously debate, and then be willing to compromise without taking it personally.
Is the procurement truly based on best value?
Is this procurement being sold as best value but instead is really lowest cost? Consider communicating your intent and then live it from start to finish. While cost is important, best value puts the project first and foremost. Successful overall project outcomes should win out over individual parties.
Can the owner be trusted to follow through?
Can the owner be trusted? Consider saying what you mean and meaning what you say at all times. Communicate your commitments for fair dealings and then follow through even when it may not work in your favor.
Is the project budget realistic and transparent?
Does the owner have a good handle on its own budgets? Consider sharing your budget, how it was developed, and when. This includes estimate details, avoiding broad assertions without backup.
Does the owner understand current market conditions?
Is the owner in tune with the current market? Share how or if the budget was adjusted for time. An AACE Class 3 estimate from three years ago was potentially 30% low by definition even then. Understand and be prepared for how inflation and market conditions can affect those values.
Can empowered decision-makers act quickly?
How nimble will the owner be in making decisions? Consider outlining your internal decision-making process, and be honest about the hurdles and the time required. Have the decision-makers in the room; don’t speak to the empty chair and defer decisions to someone that isn’t present.
Does the owner understand collaborative project delivery?
Does the owner have experience in the collaborative delivery method? If this your first collaborative delivery project, just say so. Ask for help and be open to the benefits of the method and the expertise of its participants. Pick good advisors that provide guidance and don’t take over. Realize that the proposers are likely to have done this same thing many times over and this may be the only time in your career to see a project of this type.
Are the contract and risk allocations reasonable?
Are the owner’s contracts reasonable? Consider providing a copy in the RFP or earlier. Make it available as a draft and be willing to make reasonable adjustments that reduce cost, risk, and duration for all parties. Risk is shared in collaborative delivery.
Does the owner have a strong industry reputation?
Does the owner come well recommended by other engineers and builders that have worked on its projects in the past? Always be fair in your dealings and lead with that reputation.
How Owners Can Attract the Best Design-Build Teams
Open communication, credible budgets, timely decisions, fair contracts, and authentic collaboration make a project more attractive to high-performing teams.
The Best Projects Begin at a Round Table
More and more the industry has choices and memories are long. When we sit down at the table, let it be a round table; let us speak frankly and show each other who we are and what we want to accomplish together, then let’s go out and do it.