1117

WWW . T H E Z W E I G L E T T E R . C O M

A u g u s t 2 4 , 2 0 1 5 , I s s u e 111 7

Firms’ project website systems T R E N D L I N E S

10% 15% 20% 25% 30% 35% 40% 45% 50%

Wanted – two kinds of people Inspiration is necessary for technical/design professionals and those who manage projects to be successful.

0% 5%

Zweig Group’s 2015 Information Technology Survey of A/E/P & Environmental Consulting Firms shows the two most commonly used project website systems are Sharepoint (47 percent) and Project Center (42 percent). Building a custom system in-house was also popular at 32 percent, followed by ProjectWise (21 percent) and Buzzsaw (11 percent). Percentages total more than 100 because respondents were asked to check all answers that applied. — Vivian Cummings, research analyst assistant F I R M I N D E X AECOM .............................................................. 12 Ann Beha Architects ............................................ 7 Bill Faber Construction ........................................ 9 Cathexes .............................................................. 3 CBI . .................................................................... 12 Chen Moore and Associates ............................... 6 Ecology and Environment .................................. 12 EMCOR Group .................................................... 12 Epic Piping ......................................................... 12 Fluor ............................................................... 8, 12 Fluor S.A. ............................................................. 8 Gensler. ................................................................ 7 Hight-Jackson Associates PA .............................. 9 Hill International ................................................ 12 Industrial Services Americas ............................. 12 Jacobs . .............................................................. 12 KBR .................................................................... 12 KBR Builder Group ............................................. 12 Lavallee Bresinger Achitects ............................. 12 Rental Guys . ........................................................ 5 SacyrFluor ............................................................ 8 Sacyr Industrial SLU ............................................ 8 Stantec . ............................................................. 12 Tetra Tech . ......................................................... 12 VI Engineering . .................................................. 12 Willdan Group . .................................................. 12 W. R. MEADOWS ................................................ 2

I ’ve been saying for years that having two tracks – one for managerial and sales people, and one for design and technical people – is largely a myth in this business. My conclusion was based largely on money and supply-and-demand. There are less people who can sell and manage, and they are worth more than someone who only does project-related worth. Now, I’m going to backpedal a little on that. I’ve always known that we need those technical and design people – particularly leaders – who turn out outstanding projects. It goes wrong when we don’t do a good job of communicating exactly what that standard is. It’s high. What we need in these outstanding technical/design people and in those who manage projects is inspiration . They need to be able to inspire everyone else on the team to ever-greater performance. I define that performance from the client’s point of view: The project has to exceed their expectations. They should be calling and writing letters and emails to you expressing how great a job the firm and your people did for them. And the workers who report to these people should be coming to you on their own to express their admiration and appreciation for the outstanding leadership that has been provided to them. See, the problem is, we act like project- related work isn’t important and, instead,

“See, the problem is, we act like project- related work isn’t important and, instead, only achieving certain

Mark Zweig

business goals is.”

MORE COLUMNS

xz FROMTHE CHAIRMAN: A fresh look at employee evaluations. Page 3

PLUS xz SEPTEMBER 2015 CALENDAR Page 11 xz ZG INDEX: Page 12

See MARK ZWEIG, page 2

Art in a structure Page 9

Project options

Pages 6, 7

T H E V O I C E O F R E A S O N F O R A / E / P & E N V I R O N M E N TA L C O N S U LT I N G F I R M S

A LOOK AHEAD

BUSINESS NEWS AIR BARRIER ASSOCIATION EVALUATES W.R. MEADOWS’ AIR-SHIELD W. R. MEADOWS announced that AIR- SHIELD, one of its air/vapor and liquid barrier products, has been evaluated by the Air Bar- rier Association of America and listed on its website. ABAA is the national voice of the air barrier industry in America and is dedicated to the education of all parties involved in building construction. It also provides the industry with premier training to both designers and contractors, as well as providing a listing of materials and assemblies fully evaluated by the association. Having become increas- ingly looked upon as the credible leader, the ABAA ensures products’ standards and requirements are up to code as guidelines continue to change. AIR-SHIELD is part of W. R. MEADOWS building envelope system. It’s a roll-type product that is nominally 40 mils thick. Its self-adhesive membrane is strong and durable, yet remains flexible when surface mounted. It provides excellent protection that won’t shrink, sag, dry out, crack, or rot, and it resists punctures during installation. More BUSINESS NEWS, page 4

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MARK ZWEIG , from page 1

only achieving certain business goals is. If you know anything about the best, most passionate, and creative architects, engineers, and planners, you know that only talking business with them is alienating to them. They want and need to know that what they are doing is important, worthwhile, and appreciated. Their heroic efforts cannot be consistently ignored if you expect them to be repeated. They do not just want to drive business results; they want to do projects and have relationships with clients that they can be proud of. We need project leaders and discipline experts who demonstrate that they want to keep learning. We need project leaders and discipline experts who don’t act like they are superior to everyone else on their team and help others learn. We need project leaders and discipline experts who are responsive to questions and engaged and who know how to treat other people they work with. We also need project leaders and discipline experts who work hard and don’t act like unionized blue-collar workers. The expectations are high – even if you aren’t a big seller of work or manager of people and “just” a project person. So, in this business, we desperately need good, inspired, passionate, and committed architects and engineers, who take tremendous pride in their work. We have to make sure we don’t only talk about business but also devote airtime to their project accomplishments, both inside and outside of the firm. We need hard-working leaders who love their work so much they have to be pried away from it. When we have people like this in design posts and project leadership roles, they will inspire others – Gen-X, Gen-Y, and Millennials – to work harder and longer and be better at what they do. That will produce even better projects and more accolades you can share and one more of the “virtuous cycles” of this business is established. This pattern will create a culture that leads to BUSINESS SUCCESS as well; it is the outcome of it. The $50,000 question is: “Are you creating high enough expectations for all of your project staff?” If not, start now. And are you really touting their accomplishments? If not, start that now. You will be more successful if you do. Don’t let the design and technical track be a dumping ground for people who not only aren’t good managers or business developers, but also aren’t effective inspiration project leaders and team members.

38West Trenton Blvd., Suite 101 Fayetteville, AR 72701 Mark Zweig | Publisher mzweig@zweiggroup.com Andrea Bennett | Managing Editor abennett@zweiggroup.com Christina Zweig | Contributing Editor christinaz@zweiggroup.com Sara Parkman | Editor sparkman@zweiggroup.com Megan Halbert | Design Assistant mhalbert@zweiggroup.com Liisa Andreassen | Correspondent lsullivan@zweiggroup.com Richard Massey | Correspondent rmassey@zweiggroup.com

Tel: 800-466-6275 Fax: 508-653-6522 E-mail: info@zweiggroup.com

Online: www.thezweigletter.com Twitter: twitter.com/zweigletter Blog: blog.zweiggroup.com Published continuously since 1992 by Zweig Group, Fayetteville, Arkansas, USA. ISSN 1068-1310. Issued weekly (48 issues/yr.). $475 for one-year subscription, $775 for two-year subscription. Article reprints: For high-quality reprints, including Eprints and NXTprints, please contact The YGS Group at 717-399-1900, ext. 139, or e-mail TheZweigLetter@TheYGSGroup.com. © Copyright 2015, Zweig Group. All rights reserved.

MARK ZWEIG is founder and CEO of Zweig Group. Contact him at mzweig@zweiggroup.com.

THE ZWEIG LETTER AUGUST 24, 2015, ISSUE 1117

I ’ve always been skeptical of the “performance review” style of evaluating. I believe in a strengths-based method of casting – placing people in roles that take best advantage of each person’s unique mix of talents. Preparing for and then delivering (or receiving) a performance review seems about as pleasant as having a root canal. A fresh look at employee evaluations Architectural colleague shares new scale for assessing employees’ impact on the firm, community, world in areas of attitude, capability, performance. O P I N I O N

Ed Friedrichs

I’ve been spending a great deal of time with Don Clark, who runs the Reno-based architectural firm Cathexes . The name of the firm is the plural of cathexis, which is an investment of mental or emotional energy in a person, object, or idea. And Don does exactly that in everything he undertakes and with everyone with whom he works. As we were talking the other day about people management, Don shared his employee evaluation form with me. My first response was skepticism, until he began to explain it. Don uses three general areas of review; each has a few subcategories along with examples of how successful performance is to be evaluated. His categories are very much an inventory of culture and values. They are not granular, nor are they work-assignment specific. Since I’ve covered many of these issues, I’ve added short-hand descriptors from some of my previous columns in italics. Attitude ❚ ❚ Assumes responsibility – set it and forget it; no need to check back ❚ ❚ Work relationships – plays well with others; courte- ous, friendly, sincere ❚ ❚ Professional outlook – takes responsibility to grow in the firm and profession ❚ ❚ Attendance – shows up and works with focus ❚ ❚ Image – maintains an orderly work area and projects a professional image and appearance Capability ❚ ❚ Analytical ability – is a self-starter in research, concise subcategories along with examples of how successful performance is to be evaluated.” “Don uses three general areas of review; each has a few

and thorough with recommendations ❚ ❚ Initiative – takes responsibility, recommends systemic improvements ❚ ❚ Mental alertness – listens carefully, responds well to changes ❚ ❚ Ability to represent firm – respectful toward clients, “lives” the firm culture, inspires confidence in the firm and team ❚ ❚ Supervisory ability – inspires team, develops team members, obtains measurable results ❚ ❚ Stability – projects calm in crisis, is consistent in per- formance, adapts to change ❚ ❚ Overall competence – possesses technical/design skills, adds to the skill base of the firm, is an “expert” in something valuable to others in the firm Performance ❚ ❚ Dependability – completes assignments thoroughly without being monitored ❚ ❚ Quantity of work – is consistent with skills and proj- ect needs ❚ ❚ Quality of work – is consistently organized, coordi- nated, and accurate ❚ ❚ Resourcefulness – seeks out best solutions, overcomes adversity ❚ ❚ Communication – speaks, listens, writes, and re- sponds clearly and thoroughly in a professional style You can imagine that everyone at Cathexes has a clear idea of what the culture of the firm is. When this is the case, it fosters consistent and predictable behavior and attitude. But here’s where Don adds a unique twist that is both humorous and serious. Using a point system from 0 to 10, each person is rated in each category as follows: 0) You died 1) You’re fired 2) Poor; need to relearn this concept

See ED FRIEDRICHS, page 4

THE ZWEIG LETTER AUGUST 24, 2015, ISSUE 1117

BUSINESS NEWS FIRST HALF 2015 COMMERCIAL AND MULTIFAMILY CONSTRUCTION STARTS SHOW NEW YORK CITY METRO AREA LEADING THE NATION A ranking of the top U.S. metropolitan areas by the dollar amount of new commercial and multifamily construction starts reveals the New York City metropolitan area leading the nation during the first half of 2015, according to Dodge Data & Analytics. A total of $17.3 billion of commercial and multifamily projects in the NewYork City metro- politan area reached ground-breaking during this year’s January-June period, up 72 percent from a year ago. The NewYork amount was substantially greater than what was re- ported by the metropolitan area ranked No. 2, Miami at $3.0 billion and up 38 percent from a year ago. Rounding out the top five metro- politan areas with their percentage change from a year ago were the following – Washington DC, $2.4 billion (down 15 percent); Boston, $2.2 billion (up 21 percent); and Seattle, $2.1 billion (up 49 percent). Metropolitan areas ranked 6 through 10 performed as follows dur- ing the first half of 2015 – Los Angeles, $2 billion (down 30 percent); Houston TX, $1.9 billion (down 36 percent), Denver, $1.8 billion (up 56 percent); Dallas-Ft. Worth, $1.8 billion (up 5 percent), and Chicago, $1.7 billion (up 7 percent). For the U.S. as a whole, commercial and multifamily construction starts during the first half of 2015 were re- ported at $73.2 billion, up 13 percent from a year ago. “Market fundamentals such as occupancies and rents continue to show improvement, which supports further growth for commercial

and multifamily construction,” said Robert A. Murray, chief economist for DodgeData & Analytics. “While the expansion for the overall economy remains tepid, as shown by the 2.3 percent growth for GDP in the second quarter, commercial and multifamily development continues to be a prime focus of the investment community in its search for yield. The level of construction starts for commercial build- ing is still well below the peak volume of the previous decade, even with double-digit gains over the past four years. Multifamily housing has shown steady growth since 2010, which has generated some concern about overbuilding, particularly in the NewYork metropolitan area. Still, NewYork is seeing an even greater amount of multifamily construction starts this year, and the national multifamily upturn is now broadening in terms of geography, with construction gains tak- ing place in more metropolitan areas.” The NewYork metropolitan area during the first half of 2015 showed growth for both its commercial building (up 84 percent) and its multi- family (up 67 percent) segments from a year ago. Large commercial building projects that reached ground-breaking during the first half of 2015 included two structures at the Hudson Yards development on Manhattan’s West Side – the $1.2 billion 30 Hudson Yards office/retail tower and the $400 million 55 Hudson Yards office tower. Other large commercial building projects that reached ground-breaking included the $575 million 1 Manhattan West project, the $200 million South Street Seaport Pier 17 retail center, and a $150 million tenant install at 10 Hudson Yards.

ED FRIEDRICHS , from page 3

ANNUAL EVALUATIONS IN A/E/P AND ENVIRONMENTAL FIRMS According to Zweig Group’s 2015 Policies Procedures & Benefits Survey of AEP & Environmental Firms:

3) Marginal; need to pay attention and improve 4) Good; need some fine-tuning 5) Perfect; all we ask So, where do people in the firm go from here? 6) Perfect, and a little extra 7) Performance is changing the office 8) Performance is noticeable in the community 9) Performance is changing the community 10) Performance is changing the world Both Don and the person being evaluated fill out the form with their numbers. The meeting is a comparison of how each sees performance. But, since the process has an aspirational character, no one is bothered by it. It’s all about expectations, and expectations like this require continual support from the firm to help people achieve their ambitions and passions to change the world. It also attracts others with such aspirations. If people are working consistently to achieve this level of performance, their efforts affect their project work. The projects Don has on the boards right now in Reno are of a scale, scope, and thoughtfulness to place them squarely in the “9” category. If they are as successful as they have the potential to be and are emulated in other communities, Cathexes will score a clear and resounding “10.” Don adds: “When you reach ‘10,’ erase the slate and start all over again!”

90 percent of firms conduct regular performance appraisals or reviews of employees.

72 percent of firms use the same performance appraisal form for all employees.

81 percent of firms adjust wages/salaries based on the results of the performance review.

PERFORMANCE REVIEWS A L i nkedIn po l l asked respondents : “What word comes to mind when you think about Performance Reviews?”

Bull%&*!

24%

25%

16% 16%

Helpful

21% 23%

50% 20%

Helpful

Bull%&*!

Stressful

Exciting Time Consuming 20% 24%

Helpful

Exciting Time Consuming 16% 15%

Time Consuming

30%

Source: Cloudave.com

THE ZWEIG LETTER AUGUST 24, 2015, ISSUE 1117

I N D U S T R Y T R E N D S

The case for renting Percentages of firms choosing not to buy rarely used equipment has skyrocketed since 2011 and is projected to keep growing; several organizations also offering their fleets.

Additionally, in its survey of more than 70,000 business owners, CEOs, managers and procure- ment professionals, Purchasing.com discovered that between 2011 and 2014, rentals for compact truck loaders shot up 925 percent, wheel loader rentals skyrocketed 273 percent, and forklift rent-

By LIISA ANDREASSEN Correspondent

C onstruction equipment that is not being used costs money. It’s that simple. That’s why more and more mobile-based equipment rental apps are popping up all over and also why more construc- tion companies are not only renting other’s equip- ment, but renting out their own, too. “Whether it’s work on the Fort Armstrong building in Rock Island or smaller projects, like your own personal garden, renting equipment remains a cost efficient option.” According to the American Rental Association, the construction world is following a broader trend of contractors renting goods that they only occasion- ally use. The ARA estimates that nearly 50 percent of all equipment used on job sites today is rented, and it forecasts a growth of 37.6 percent in North American equipment-rental activity that could reach $52.3 billion in sales by 2017.

als jumped 90 percent. RENTAL COMPANY WEIGHS IN.

Andy Fliege, president of Rental Guys , a construc- tion equipment rental company for the Quad Cities in Illinois, says, “The third and fourth quarter this year, is going to show big increases in construction work in the Quad Cities. And, if everyone had to go buy their stuff instead of renting, that’s tough for them to do. There’s a large project coming – the 74 bridge – and to outlay that type of capital for such a project is difficult to do nowadays.” Revenue for companies like Rental Guys is expect- ed to grow over the next four years, according to the ARA. And, their equipment will help grow the community. “Whether it’s work on the Fort Armstrong build- ing in Rock Island or smaller projects, like your See RENTING, page 8

THE ZWEIG LETTER AUGUST 24, 2015, ISSUE 1117

Project

Determining the right type Several factors dictate whether design-build or design-bid- build is the appropriate delivery method for a project. By LIISA ANDREASSEN Correspondent H ow do you determine which type of project is best – design-build or design-bid- build? Let’s start with the definition for each project delivery system. ❚ ❚ Design–bid–build is the traditional method for project delivery, where the agency or owner contracts with separate entities for the design and construction of a project. There are three main sequential phases to the design–bid–build delivery method:

J M CE P

PROCUREMENT PRO WEIGHS IN Helmut Johannsen is a partner at Fasken Martineau, an international business law and litigation firm. He is the leader of the firm’s construction, procurement and infrastructure group, and his practice focuses on law related to construction, engineering, and procurement. He says the advantages and disadvantages of design- build include: Advantages ❚ ❚ Single-point responsibility ❚ ❚ Opportunity for innovation and faster project delivery ❚ ❚ Efficiency (design and construction expertise combined) ❚ ❚ Contractor bears risk of integrating design and performance of all packages ❚ ❚ Streamlined contractor/consultant interface ❚ ❚ Fewer changes ❚ ❚ Implementation of changes often simplified ❚ ❚ Often reduces number of claims ❚ ❚ Increased flexibility ❚ ❚ Reduced administrative burden for owner ❚ ❚ Improved risk management for owner ❚ ❚ Cost savings and more certainty of final price ❚ ❚ Greater ability to evaluate contractors on factors other than cost Disadvantages ❚ ❚ Loss of control and reduced owner involvement in design ❚ ❚ Cost of procurement process (to all parties) ❚ ❚ Difficulty/time comparing different designs ❚ ❚ Cost of risks and contingencies can result in substantial risk premium ❚ ❚ Environmental/regulatory processes ❚ ❚ Limited pool of qualified design-builders ❚ ❚ QA/QC largely in contractor’s hands ❚ ❚ Disputes tend to be larger and more complex ❚ ❚ Management of long-term risks ❚ ❚ Some lack of project definition before contract award ❚ ❚ Consequences of default more drastic than for design-bid-build

❚ ❚ The design phase ❚ ❚ The bidding phase ❚ ❚ The construction phase

❚ ❚ Design–build is a project delivery system used in the construction industry. It is a method to deliver a project in which the design and construction services are contracted by a single entity known as the design-builder or design-build contractor. In contrast to design-bid-build, design–build relies on a single point of responsibility contract and is used to minimize risks for the project owner and to reduce the delivery schedule by overlapping the design phase and construction phase of a project. Peter Moore, president of Chen Moore and Associates (Fort Lauderdale, FL), a 43-person civil engineering, environmental engineering, planning, landscape archi- tecture, GIS, and construction observation service firm, says that his first engineer- ing projects, 18 years ago, were all design-build projects. “I was an entry-level engineer, and my first experiences were on a series of park and recreational facility projects that were procured via design-build,” he says. “It was a great learning experience, working on solid designs following regulatory require- ments, but it pushed my creative limits to keep within budget constraints. It helped solidify my awareness and concern with design costs.” “Overall, there are pros and cons to every pursuit, not necessarily associated with the type of construction procurement.” FOLLOW RULES AND CHOOSE. Today, as the CEO of a company working in the public and private sectors domestically and internationally and through a variety of procure- ment methods, Moore thinks that both design-build and design-bid-build have their advantages and disadvantages. He explains that Chen Moore does not lean toward one procurement method or an- other, but typically follows a set of rules: ❚ ❚ No matter what the procurement method is, a bad client is a bad client. It is im- portant to gauge the financial security, ability to make (and live with) decisions, and overall respect that a client has for the consultant. ❚ ❚ You will be defined by your weakest partner. Whether it be an unreliable contracting partner or a weak subconsultant, regardless of the procurement method, the perception

See PROJECT TYPE, page 8

THE ZWEIG LETTER AUGUST 2

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Joint-ventures get a face-lift Modern teaming is more informal and billing-based than past partnerships; survey shows CEOs anxious to join with other firms when possible. PA R T N E R S H I P S

“Seeing how they use joint ventures could help you de- cide on the best approach for your business,” Jacque- line Weir, director of A/E services at Feeley & Driscoll, a Boston-based accounting firm, says. Weir says that you can also benefit from studying your own enterprise. Be realistic about your strengths and weaknesses – consider performing a strengths, weak- nesses, opportunities, and threats analysis to identify whether the two businesses are compatible. You will almost certainly want to identify a joint venture part- ner that complements your own skills and failings. Remember to consider the employees’ perspective and bear in mind that people can feel threatened by a joint venture. It may be difficult to foster effective working relationships if your partner has a different way of doing business. When embarking on a joint venture, it’s imperative to have your understanding in writing. You should set out the terms and conditions agreed upon in a written contract, this will help prevent misunderstandings and provide both parties with strong legal recourse in the event the other party fails to fulfil its obligations while under contract. SURVEYS SAY… PricewaterhouseCoopers recently re- leased a study that revealed CEOs are eager to form more joint ventures and business alliances. Forty-two percent of CEOs plan to enter into one such arrange- ment this year, and only 4 percent expect to leave an existing relationship. “Partnering allows you to become larger than you are and to get work that would otherwise be out of reach,” says Aarni Heiskanen, executive producer at “AEC Business,” a blog for business owners, managers and developers in the architecture, engineering, and con- struction industries. Another survey reports that more than half of fast- growing private companies say joint ventures, strate- gic alliances, and acquisitions are critical in order to grow business and move into new markets. Construction companies have always been heavy See JOINT VENTURES, page 8

By LIISA ANDREASSEN Correspondent

E ntering into a joint venture can mean some seri- ous business restructuring. And, however favor- able it might be to your growth potential, it needs to fit with your overall business strategy. David Wexler, a CPA at Adler Blanchard & Associates LLP in Burl- ington, Massachusetts, a public accounting firm, says it’s important to review your business strategy before committing to a joint venture. You might even decide there are better ways to achieve your goals. TEAMING UP. “Many firms no longer create formal joint ventures like they did years ago. Now, it’s more com- mon to team up with one firm being the architect of record,” Wexler says. He explains that these less formal relationships are usually done for two reasons. First is that the job is very big, and the feeling is that the project requires more than one firm can provide and the owner does not want to go to a huge A/E firm. The second reason is that the owner has a relationship with a local archi- tect, but the job requires more talent than that one firm can provide. “For example, there is an article in the June edition of High Profile (New England development news) that re- ports that the New England Conservatory is breaking ground on an $85 million student and performance center. It reports that the project is designed by Ann Beha Architects with Gensler as the architect of re- cord,” he says. “In these cases, the firms usually have a prime who bills the client and the other firm bills the prime.” Wexler add that it is also becoming more common to have firms bid as a team with their consultants. “On an overall basis, each firm would prefer to be the only architect or the architect of record,” he says. “Sometimes this sharing arrangement is the only way to get the work or to get experience in a market.” WHERE TO BEGIN? If you are considering entering into some type of joint venture, you may want to study what similar businesses are doing, specifically those that operate in similar markets to yours.

R AUGUST 24, 2015, ISSUE 1117

RENTING , from page 5

verification, background checks, payment processing, and an easy interface for lending and renting equipment. It benefits renters by providing a platform that facilitates inexpen- sive renting of contracting equipment, and gives contractors the ability to make money off of the equipment they aren’t using. ❚ ❚ Yard Club. Backed by Caterpillar, this online marketplace lets customers safely earn in- come on idle equipment by renting to other club members, and allows them to maximize their financial returns on fleet investments. For example, Yard Club reports that a recent one-month rental of a Caterpiller D9 Dozer saved the renter $8,500, versus a traditional rental. ❚ ❚ BlueLine Rental. BlueLine Rental has more than 130 rental stores across North America. Each rental center offers a comprehensive line of essential equipment for the construc- tion, commercial, and industrial markets, and an extensive line of compact excavators, compactors, wheel loaders, backhoe loaders, and compaction equipment. ❚ ❚ TrakQuip. An equipment rental software that also benefits non-rental companies and allows them to manage the utilization and maintenance of equipment. The TrakQuip app allows users to rent, sell, and request repairs; exchange in-app data with Microsoft Office applications in Windows 2000 or new- er; and includes various modules, such as the Basic Rental Package, Fleet Maintenance, Repair, Batch Invoice, Accounts Receivable, Accounts Payable, and Purchasing.

RISE IN RENTALS LEADS TO FEWER FEATURES Strategic “de-featuring” was a common theme at the American Rental Association’s 2015 Rental Show: Equipment makers have responded to continued growth in the rental market with more machines targeted to rental fleets. Terex launched its TLB840R backhoe loader, a modified version of the TB840, at this year’s Rental Show. Boasting a 20 percent drop in price, compared with the full-featured backhoe, the TLB840R features several changes targeted to the rental market, including a new, 74-hp engine to meet emissions standards and redesigned hydraulics to compensate for the resulting loss in power. “Mostly we took away the fancy features that a rental operation just doesn’t place value in,” said John Beckley, Terex global product manager. Source: enr.construction.com, March 4, 2015.

own personal garden, renting equipment re- mains a cost efficient option,” Fliege says. “They don’t have to put the capital out to purchase the piece of equipment. And they don’t have the maintenance issues; we han- dle all that for them. We do delivery and pick-up for them, so pretty much they can make a phone call, they hang up, they know that piece is going to be taken care of.” THERE’S AN APP FOR THAT. Where can busy con- tractors turn when they want to rent? Here are a few resources to check out: ❚ ❚ Getable. This app lets contractors rent across vendors and manage owned and rented ma- chines. Though the app is nearly five years old, $5 million in funding has made it avail- able on the iPhone and iPad. There are two versions of the free app: one for contractors and another for suppliers. Contractors can also order equipment based on negotiated pricing and volume-based incentives. And, if you’re not looking for a specific person to rent from, the app finds equipment from vendors in the Getable network. The app also gives contractors the ability to control equip- ment costs, sending weekly reports on a ma- chine while it is on-rent, notifications when it’s time to return a machine, and detailed invoicing for each machine ❚ ❚ EquipmentShare. This peer-to-peer rental startup allows contractors in the Midwest to list equipment, get price quotes, and arrange rentals. This platform combines insurance

PROJECT TYPE , from page 6

users of joint ventures. Many projects are simply too large for any one firm to bid on and deliver by itself. Here are a few ways in which the partnership-savvy industry capitalizes on the practice. ❚ ❚ One size does not fit all. Partnerships can take several forms, including: JOINT VENTURES , from page 7 ❚ ❚ Joint ventures: This is when two companies invest funds into creat- ing a third, jointly owned company. The new company is an ongoing entity that will be in business for itself, but profits are owned by the parents. ❚ ❚ Strategic alliances: These are agree- ments between two companies that often have a limited scope and func-

tion, such as a partnership through- out a specific project. ❚ ❚ Referral programs: This is where non-competing companies steer cli- ents to one another. ❚ ❚ Align different disciplines. You can also profit by thinking creatively and forming relationships with people in complemen- tary fields. For example, construction companies could work with home supply stores or real estate agents. Heiskanen shares one example of a joint- venture developed by an HVAC engineer- ing company and a maintenance firm that reduced costs by packaging their comple- mentary services. He says this shows how companies in different disciplines can “partner up to create something new.”

of your firm will be associated with the least desirable trait of your weakest partner. ❚ ❚ It is important to under- stand risk/reward, but the emphasis is on risk. Particu- larly for design-build projects, but often for large public design-bid-build design pur- suits, consultants often have significant front end costs and understanding those risks to the firm and to cash flow need to be projected to the client and the firm’s decision makers. “Overall, there are pros and cons to every pursuit, not nec- essarily associated with the type of construction procure- ment, but if the consulting community follows these sim- ple rules, the project will be a success for the owner, contrac- tor and consultant,” Moore says.

FLUOR, SACYR FORM JOINT-VENTURE IN SPAIN Fluor Corporation announced in July that it agreed to divest 50 percent of shares of its Spanish operations – Fluor S.A. – to Sacyr Industrial SLU , a multinational Spanish construction company. The new entity, SacyrFluor , will be headquartered in Fluor’s Madrid operations center and will provide project management, engineering, procurement, construction management, and self- perform construction services.

THE ZWEIG LETTER AUGUST 24, 2015, ISSUE 1117

P RO F I L E

Art in a structure Crystal Bridges Museum of American Art celebrates the beauty of Frank Lloyd Wright’s organic design in Bachman-Wilson House reconstruction.

tino (New Jersey), Hight-Jackson Associates PA (Rogers, AR), Bill Faber Construction (Benton- ville, AR), and Scott Eccleston, the museum’s direc- tor of operations and the Bachman-Wilson House project manager. While the typical notion of art focuses on painting and sculpture, the Wright home stretches the con- ventional definitions. “The Bachman-Wilson House is a work of art, rep- resenting Wright’s organic design philosophy,” Eccleston says. “The house embodies the Crystal Bridges mission to celebrate the American spirit in a setting that unites the power of art with the beauty of nature. Preserving the house offers a rare opportunity to share this significant work with the public and enhance our grounds, educational pro- grams, collection and to tell the unfolding Ameri- can story.” Originally located in Somerset County, New Jer- sey, the house flooded at least four times, in 1999, 2007, 2010, and 2011. The Tarantinos saw the writing on the wall: Sell the house and have it re- located or let it be destroyed. They eventually con-

By RICHARD MASSEY Correspondent

R ebuilding a masterpiece isn’t easy, but it’s re- warding. That’s the big takeaway from the Bach- man-Wilson House, which is being reconstruct- ed on the grounds of Crystal Bridges Museum of American Art in Bentonville, Arkansas. While the typical notion of art focuses on painting and sculpture, the Wright home stretches the conventional definitions. Set to open this fall, the Frank Lloyd Wright design will stand as a monument to American architecture in addition to serving as a living tool for public ed- ucation. The 1954 house, at around 1,700 square feet, will be the largest piece in the museum’s col- lection, and with its own place inside a walled yard overlooking the museum’s Great Hall, will have pride of place. The reconstruction is the work of a team of ex- perts: former owners Lawrence and Sharon Taran-

See BACHMAN-WILSON, page 10

THE ZWEIG LETTER AUGUST 24, 2015, ISSUE 1117

BACHMAN-WILSON , from page 9

tacted Crystal Bridges, a deal was hashed out, and in early 2014, the museum announced the purchase. In partnership with J.B. Hunt Transport Services Inc. (Low- ell, AR), the house was trucked to Northwest Arkansas Re- gional Airport in thousands of meticulously labeled pieces and stored in a hangar. Then Hight-Jackson and Bill Faber Construction went to work. The biggest trick was to maintain the look and feel of 1954 while equipping the structure with the modern technologies it will need to function as an event and educational space. “We created new site plans to position our building at its new location,” says Shayan Dehbozorgi, a project manag- er with Hight-Jackson. “We also had to design a basement that is not visible to the public’s eye which contains all the mechanical units that were added to the house to provide desired thermal conditions. We also had to recreate the original imperfections that were a part of the original con- struction and correct some of the initial mistakes in the construction without compromising the final product.” Eccleston says there will be limited guest capacity each day to protect the interior. The house will also be subject to daily inspections and a protection services specialist will be sta- tioned in the house to monitor impact. The museum’s facili- ties team will be in charge of keeping the home clean and maintained. Known as a Usonian home, Bachman-Wilson was designed for a middle-class buyer. In keeping with that philosophy, the house has very few luxuries and was built in large part with ordinary materials, such as cinderblock. As with other

Wright homes, the signature features are a wall of glass, an open ground floor, and a cantilevered balcony. Though the house was moved from its original location, it is perhaps more historical now than it was before. One of only two Wright houses that have been relocated, Bach- man-Wilson has the original plans, new plans by Hight- Jackson, and documentation of the deconstruction and the reconstruction. The Tarantinos also sourced new ma- terials, such as block and interior mahogany, and provided invaluable historical data to Hight-Jackson and Bill Faber Construction. Ron Shelby, the CEO of Hight-Jackson, was chosen to lead the project partly because of his connection to Crystal Bridges. He was key in the installation of James Turrell’s “The Way of Color,” a site-specific skyspace located on the Art Trail. He was also chosen because of his connection to legendary Arkansas architect Fay Jones, who apprenticed under Wright. “This was a project that took me back to the roots of my ar- chitectural education, very basic in its theory and detailing,” Shelby said. “It reacquainted me with Frank Lloyd Wright in a way that I had not done since my time in college. For that, it was very rewarding to me personally.

THE ZWEIG LETTER AUGUST 24, 2015, ISSUE 1117

CALENDAR

SEPTEMBER 2015 SUNDAY MONDAY TUESDAY

conference/ seminar/course

webinar

award

deadline

WEDNESDAY

THURSDAY

FRIDAY

SATURDAY

ACHIEVING RECORD

ORGANIZING WITH

ZWEIG GROUP HOT FIRM & A/E INDUSTRY AWARDS CONFERENCE Boston; zweiggroup.com/conference

SALES AND PROFITS 1:30pm ET; acec.org/ calendar

OUTLOOK 2013 FOR BUSY PEOPLE 1:30pm ET; acec. org/calendar

LIABILITY IQ & REVIEW 1:30pm ET; acec. org/calendar 8-HOUR LIFE SAFTEY CODE SEMINAR Lake Charles, LA; nspe. org/resources/pe- institute

8-HOUR LIFE SAFTEY

IF YOU HAVEN’T

ENR GLOBAL

CONSTRUCTION SUMMIT NewYork; globalconstruction summit.com

CODE SEMINAR Covington, LA; nspe.org/ resources/pe- institute

PLANNED IT, YOU CAN’T CONTROL IT 1:30pm ET; acec. org/calendar

30TH ANNUAL WATEREUSE SYMPOSIUM Seattle; watereuse.org/symposium

BECOMING A BETTER PM

8-HOUR LIFE SAFTEY CODE

BECOMING A BETTER

SEMINAR Baton Rouge; nspe.org/ resources/pe- institute

San Jose, Calif.; zweiggroup.com/ seminars

PM Seattle; zweiggroup.com/ seminars

EPA-USDA NATIONAL WORKSHOP ON WATER QUALITY MARKETS Lincoln, Neb.; conservationfund.org/ resources/courses-and-events

USING METRICS TO IDENTIFY BARRIERS TO SUCCESS 1:30pm ET; acec. org/calendar

STORMWATER CONGRESS

OWNERSHIP TRANSITION

MYSTERIES OF FAR REVEALED Sacramento, Calif.; acec.org/

Chicago; weftec. org/stormwater congress

2.0 1:30pm ET; acec.org/calendar

calendar/calendar

COMPETITIVE STRATEGIES

FOR WINNING PURSUITS 1:30pm ET; acec.org/ calendar

WEFTEC

WEFTEC Chicago; September 26-30; weftec.org

BECOMING A BETTER PM NewYork; zweiggroup.com/ seminars

ICC ANNUAL CONFERENCE Long Beach, Calif.; iccsafe. org/conference

PLACING ROUND PEGS

INFORMATION TECHNOLOGY FORUM • FINANCE FORUM • HR FORUM 2015 New Orleans; acec.org/calendar

INTO ROUND HOLES 1:30pm ET; acec. org/calendar

TALK TO US Have some feedback on a recent A/E/P or environmental event? Send your review to abennett@zweiggroup.com for inclusion in TZL . And, if a calendar item is missing, please let us know! Send your event list to Andrea Bennett, too.

THE ZWEIG LETTER AUGUST 24, 2015, ISSUE 1117

ZG INDEX DESPITE THE OIL AND GAS SLOWDOWN ... Though many engineering, procurement, and construction companies have been trending down for the past several months, those with diversified portfolios are doing just fine. The lower stock values also present a real opportunity for investors. Like many others, Fluor has fallen hard lately. In a recent post on OilPrice.com, Michael McDonald writes, “capped by a nearly 10 percent decline after announcing earnings on July 30 … As a long-term holding, FLR and many others offer great value then, but investors buying in at this stage need a strong stomach as the worst is probably still to come.” Though global energy demand is expected to rise 56 percent by 2040, the fall in oil creates lower fees making a quick rebound possible as projects become more affordable again. There were no big winners this month, though staying alive and profitable is a struggle, as the fall in almost all commodities including oil and mining processes has driven many backlogs down. Only Tetra Tech , CBI , KBR , and Ecology and Environment are substantially above their 50-day moving average. Ecology and Environment is the only firm on the list to see a significant stock price increase this month with an 8 percent increase in price-per-share. Ecology and Environment declared a six-month dividend of 24 cents per share,

the 57th consecutive dividend E&E has declared since the firm went public in 1987. AECOM , CBI, EMCOR Group , Hill International , Jacobs , KBR, and Willdan Group all received numerous awards; Jacobs saw a piece of a $1.2 billion contract for the second section of the California high speed rail system. Many of the awards are for transportation infrastructure, industrial plant design, and large scale urban development. On the acquisition front, Stantec acquired VI Engineering (Houston, TX) to strengthen its engineering markets of high voltage substations, transmission, and distribution. KBR announced that it will spin off its Industrial Services Americas unit into a new company and that it sold its Canadian pipe fabrication facility to Epic Piping ; both companies belong to the portfolio of a capital investment group. KBR has also cut its losses and sold KBR Builder Group to another firm out of Illinois; it will be rebranded BE&K, it’s name before being acquired in 2008. Don’t fret the short-term losses, which can be attributed to the drop in oil and gas projects. Everything is cyclical; it will rebound, and companies will become stronger and more diverse. This is something we have learned time and time again. Take advantage of the investment opportunity while you can. Think of it like buying a house in 2009-2011! — Ryan Renard, consultant.

Share Pricing

Valuation

Ticker

Name

Market

Market Close Cap Jul. 31, 2015

Close Beginning of % Month

Change % Change EPS

EV/

EV/ Price/ Price/

Book Value

Jun. 30, 2015

Month Change

Change

from 50 -day MA

Rev. EBITDA Sales

ACM

AECOM Technology Corp

NYSE

4.86B

33.03

33.08

0.05

(1.28)

-3.81%

(0.05)

0.71 12.74 0.37

1.43

AMFW Amec Foster Wheeler

NYSE

4.89B

14.62

12.92

(1.70)

-12%

(1.20)

-8.70%

0.42

1.02 13.51 0.79

1.59

CBI

Chicago Bridge and Iron Co.

NYSE

5.17B

54.26

50.04

(4.22)

-8%

(6.14)

-11.42%

5.37

0.58 6.10 0.41

1.91

EEI

Ecology and Environment

Nasdaq

44.63M

9.04

10.43

1.39

15%

0.75

7.72%

0.43

0.33 6.62 0.36

1.19

EME

EMCOR Group Inc

NYSE

2.99B

45.37

47.77

2.40

0.65

1.39%

2.43

0.47 8.91 0.47

2.09

ENG

ENGlobal

Nasdaq

36.69M

1.50

1.35

(0.15)

-10%

(0.15)

-10.10%

0.17

0.32 4.66 0.37

1.29

EXPO

Exponent Inc.

Nasdaq

1.18B

42.56

44.78

2.22

1.83

4.21%

1.52

3.50 14.64 4.00

4.60

FLR

Fluor Corp

NYSE

7.66B

56.22

53.01

(3.21)

-6%

(3.78)

-6.79%

3.23

0.34 5.08 0.37

2.53

HIL

Hill International Inc

NYSE

264.46M

5.30

5.26

(0.04)

-1%

(0.11)

-2.07%

(0.22)

0.66 9.87 0.45

1.79

JEC

Jacobs Engineering Group

NYSE

5.01B

43.26

40.62

(2.64)

-6%

(3.00)

-7.00%

2.56

0.45 6.80 0.40

1.17

KBR

KBR Inc.

NYSE

2.71B

19.15

19.48

0.33

(0.67)

-3.42%

(8.09)

0.35 (11.60) 0.45

3.17

STN

Stantec Inc

NYSE

2.68B

27.64

29.21

1.57

(0.03)

-0.12%

1.44

1.75 12.94 1.54

2.89

TRR

TRC Companies

NYSE

328.37M

10.26

10.15

(0.11)

-1%

0.36

3.47%

0.58

0.68 7.28 0.80

2.24

TTEK

Tetra Tech Inc.

Nasdaq

1.53B

26.16

25.64

(0.52)

-2%

(0.45)

-1.75%

1.47

0.96 11.47 0.85

1.66

VSR

Versar Inc.

NYSE MKT

35.7M

3.69

3.94

0.25

(0.17)

-4.41%

(0.05)

0.38 21.70 0.28

0.93

WLDN

Willdan Group Inc

Nasdaq

83.75M

14.36

11.18

(3.18)

-22%

(2.42)

-18.41%

1.22

0.74 8.46 0.73

2.55

DJIA

DOW Jones Industrial Avg.

NYSE

18010.68 17619.51

(391.17)

-2%

*information at close of day Aug. 13, 2015

Average Median

0.83x

8.7x 0.79x 2.06x

0.62x 8.69x 0.45x 1.85x

ON THE MOVE LAVALLEE BRENSINGER ARCHITECTS ADDS STAFF, OPENS NEW OFFICE Lavallee Brens- inger Architects of Boston and Manchester has announced the addition of eight staff members to the firm and the opening of a new location in Portland, Maine.

“In response to more than 20 years of suc- cessful partnering with extraordinary orga- nizations throughout Maine, we are excited to announce our Portland office is under construction and will be ready for its grand opening this fall,” said Richard Pizzi, CEO.

The new staff members include, in the de- sign team, Paul Lewandowski, Alice Carey, Eric Giuliano, Shellie McClallen, Ryan Tirrell, and Scott Graham; and in the business- support area Kathleen Porter and Rebecca Tildesley.

THE ZWEIG LETTER AUGUST 24, 2015, ISSUE 1117

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