Over the past decade, the trend has been for owners to shift greater amounts of risk in the construction process. This has worked to the advantage of firms providing design-build and construction management at-risk. But this trend has cut into the use of agency CM as a discreet project delivery system. Still, firms providing agency CM service have managed to use their management skills to take advantage of new opportunities and market niches.
On project delivery, "the CM market today is rotating markedly to CM at-risk," says Gui Ponce de Leon, CEO of PMA Consultants. This has led agency CM firms like PMA to move toward broader services, from financing through occupancy. "We can provide management of financing, permitting, easements and site selection," Ponce de Leon says. "We can do everything a developer does without the premium developers charge. We call it the no-load developer model."
Ponce de Leon points out that program management has been an evolutionary step in CM services. "Program management has been surging in the public arena," he says. PMA has been involved in public sector PM since the late 1980s and was brought in by the Bechtel-Parsons Brinckerhoff team on the Central Artery/Tunnel in 1989.
Another agency CM firm that has been prominent in program management is Construction Dynamics Group. "Twenty years ago, we had to work hard to convince people of the need for program management services," says Larry Zimmerman, CDG president. "Now, there are few major public projects that aren't using PM to one extent or another."
Zimmerman estimates that about 75% of CDG's work is in the water and wastewater market. This has provided opportunities in broadly integrated program management. "We are seeing big pipeline projects where public agencies look not just at the pipeline, but at the whole project corridor that needs to be managed. That way, you don't tear up a road for a water line and then come back to tear it up again a month or two later for something else."
The meat and potatoes for program management services has been schools. "The education market has been leading the way on PM," says Charles F. Dahill Jr., CEO of PinnacleOne. But Dahill is beginning to see signs of a trend from the K-12 market toward higher education. "Right now, it is moving toward community colleges, with some university work," he says. "It's a matter of demographics, as students age."
Ironically, the blossoming of design-build may actually be helping agency CM firms. "Arizona recently adopted an alternative means of project delivery law, and for public agencies, it's the newest thing in town," notes Dahill. But few public agencies have any experience in design-build and need to hire CM firms as their agents to help them through the process, he says.
While firms providing agency CM are finding greater opportunities to use their expertise by providing new and expanding services, many are facing an identity problem. "We play games in the industry with definitions," says Bruce D'Agostino, executive director of the Construction Management Association of America. D'Agostino emphasizes that construction management is not a distinct project delivery system, but a broader management discipline. A CM firm can deliver a variety of different services to meet the expanding demands of owners, he says.
But firms still are fighting the image as providing simple project delivery. "As part of a marketing study, we did a survey of our clients," says Dahill. "Most did not know of all the services we can supply. We are going to have to do a better job of communicating."
