TZL 1444 (web)

June 6, 2022, Issue 1444 WWW.ZWEIGGROUP.COM

TRENDLINES

Finance and accounting staff

There is no perfect buyer or seller in the marketplace, but how do you attract the best possible partner? The best transaction partner

Finance and accounting staff as a percentage of total staff was analyzed among firm participants in Zweig Group’s 2022 Financial Performance Report of AEC Firms . This follows a common theme among nontechnical staff in which the department staff percentage decreases as the total firm size increases. Because of this increase in responsibility for finance staff in larger firms, financial directors see a bump in base salary relative to industry norm. Participate in a survey and save 50 percent on the final or pre- publication price of any Zweig Group research publication.

E very company that is active in the M&A market, whether you are a buyer or a seller, is interested in finding the “ideal” partner in a transaction. One of the earliest exercises in any M&A search conducted by Zweig Group is to define your search criteria. What types of companies and company traits would yield intriguing benefits through a merger or acquisition? This conversation can revolve around different criteria, but usually centers around things like size (revenue and FTE), profitability, geography, service lines, and market sectors. Sometimes, even with outlandish and unreasonable expectations of the perfect suitor, companies interested in M&A will search endlessly for their “unicorn.” Some readers may have heard this term before, but a unicorn is essentially the perfect buyer/seller, a company that actually exists in the marketplace that matches all of your preferred criteria, and, most importantly, is actually willing to negotiate a fair purchase price. The reason we refer to these as unicorns is simple – they do not exist, at least not for the price that you have in mind. The point that anyone who wants to be active in M&A needs to understand is there are always trade-offs made along the way. The “perfect” M&A partner for you – buyer or seller – who is also willing to negotiate a fair price, almost certainly does not exist in the AEC M&A market. Even if they do, the odds of you contacting them with advantageous timing are even slimmer. So, this inevitably leads us to this question: If I can’t meet the perfect buyer or seller in the marketplace, how do I attract the absolute best possible partner in a merger or acquisition? Here are a few ways that I have found effective in my work as an M&A advisor at Zweig Group: 1. Build the right deal team. It is extremely common, especially with first-time buyers or sellers, to want to include everybody on the M&A deal team. They want all 15 principals and the kitchen sink to have an opportunity to be involved in the M&A process. While it is admirable to lead your firm with such inclusivity, we have found that it is best to limit the deal team to a select few (three to four) members of executive leadership (e.g. CEO, CFO, COO). You could potentially include one of the second tier/future leaders of the firm if desired, but there is no need for your entire leadership team to be intimately involved in the process. I speak more about this in No. 4

John Bray, CM&AA

FIRM INDEX Derck & Edson, LLC.............................................4

FEH Design...............................................................6

GZA GeoEnvironmental Inc. ....................... 10

RDG Planning & Design ....................................4

SCS Engineers......................................................10

MORE ARTICLES n JANE LAWLER SMITH: Foundations Page 3 n Steward of the firm: Kevin Eipperle Page 6 n SOL SIM: Who should assume the risk? Page 9 n MARK ZWEIG: The joys of simply doing the work Page 11

See JOHN BRAY, page 2

THE VOICE OF REASON FOR THE AEC INDUSTRY

JOHN BRAY, from page 1

below, but a crowded deal team can only lead to mixed opinions and an inefficient decision-making process. 2. Cast a wide net. It is essential to keep an open mind about what types of firms could benefit your organization in an acquisition. You need to define your criteria in a way that is not so specific that there are only 15 total companies on Earth that would qualify. Casting a wide net will give you more “swings at the plate” – statistically it will enhance your odds of speaking to the best possible partner in a transaction. In addition, there is only so much information about private companies (like the ones you are targeting) available online, so limiting yourself to a very narrow search may even prevent you from speaking to firms that do fit your criteria, it just wasn’t apparent online. Lastly, casting a wide net involves always building opportunistic relationships in the M&A world (e.g. companies, advisors, attorneys, etc.), as you never know when one of your connections will one day lead to a prime opportunity. 3. Sell your firm and the future opportunity. This may seem obvious, but you would be surprised how often this gets lost as a priority over the course of M&A discussions. When you can identify a target who is willing to speak with you about buying or selling your firm, you need to nurture and value that opportunity from start to finish. The best possible acquisition opportunities are oftentimes successful companies that are not even looking to buy/sell, so their agreeing to speak with you should be viewed as nothing more than that – a single conversation. It is up to you to sell them on the specific benefits and synergies that you can offer to convince them that it makes sense to move the conversation forward. On the other hand – many buyers will be evaluating multiple firms for purchase, and most sellers will have multiple interested buyers – what are you doing to differentiate yourself from the competition? 4. Be responsive and respectful of the other party’s time. There is an old saying – “time kills all deals” – and it could not be truer in M&A discussions. Make your search a daily priority and respond to all requests from advisors or the other party as quickly as possible. Create a sleek team and efficient decision-making process to push conversations forward quickly. If you need consensus and sign-off from more than a couple people before making a decision, the M&A process will be negatively affected. Taking too long (more than two weeks) to respond at any point has the potential to kill the deal. The other party will lose enthusiasm for the conversation quickly if they feel like the time and effort they are putting forth is not being reciprocated. 5. Be flexible and willing to negotiate. Do not enter negotiations with a “my way or the highway” mindset. Have an open mind about how you can work together to build an offer that both sides are excited about. Has your team differentiated internally between terms that are “wants” and “needs” on the deal? Ask the other party what their expectations are. Ask about the specific terms they would like to see in the Indication of Interest or Letter of Intent. Work with an advisor who has experience working in the AEC industry so you can use industry-specific experience in assembling a term sheet. The important thing to remember at this late stage is that you will likely need to make trade-offs in negotiating a deal, but that is OK because you have properly vetted the opportunity and understand the many benefits that can come from this strategic partnership. Whether you’re on the buy- or sell-side of a deal, Zweig Group’s full-scale M&A advisory team can help you find and evaluate candidates and then structure the transaction – managing the process from conception to the closing table. Click here to learn more! John Bray, CM&AA is an advisor with Zweig Group’s M&A and executive search teams.

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Chad Clinehens | Publisher cclinehens@zweiggroup.com Sara Parkman | Senior Editor & Designer sparkman@zweiggroup.com Shirley Che | Contributing Editor sche@zweiggroup.com Liisa Andreassen | Correspondent landreassen@zweiggroup.com Tel: 800-466-6275 Fax: 800-842-1560 Email: info@zweiggroup.com Online: zweiggroup.com/blogs/news Twitter: twitter.com/zweigletter Facebook: facebook.com/Zweig- Group-1030428053722402 Published continuously since 1992 by Zweig Group, Fayetteville, Arkansas, USA. ISSN 1068-1310. Issued weekly (48 issues/year). Free electronic subscription at zweiggroup.com © Copyright 2022, Zweig Group. All rights reserved.

2022 AEC EXECUTIVE ROUNDTABLE This roundtable is a unique opportunity for AEC firm leaders to engage and interact with industry peers to discuss current issues facing firms today, explore industry trends and next practices, and confront the biggest challenges they face leading their firms. See you this June 23-24 in Dallas!

THE ZWEIG LETTER JUNE 6, 2022, ISSUE 1444

OPINION

Foundations

Over time, evolving client needs and approaches could erode your marketing foundation. Take the time to shore up your foundation before it crumbles entirely.

I n the AEC industry, a strong foundation is of utmost importance. Build it poorly, and you will suffer the consequences. Build it well, and it will serve you for a lifetime.

Marketing is not so different from building construction when it comes to foundations. Those of us with longevity in our positions worked hard to create strong foundations for our marketing structures. We are intimately familiar with the equivalent of the concrete, steel, block, and stone of our constructs. These metaphoric building materials likely take the form of your one-page firm history, organization chart, project sheets, professional resumes, business card templates, and letterhead files – for print and digital use of course. Building on top of these foundational items, we have our website (which some may argue is a foundational element today), your latest 3D graphics for marketing, and your movie files. Then there are the campaign details for direct mail and email marketing, procedures and details for core client gifts,

promotions for prospects and promotions for existing clients, and let’s not forget the qualifications packets and of course, the proposals. Suffice it to say, over time, as client needs and marketing approaches evolve, so have our marketing enterprises. In most cases, I would argue that the basics are still the same and the core structure stands. But depending on your organization, your target markets (which may remain consistent or change over time), and your overall growth, you may have new additions – in the building metaphor, a new wing, a dormer, a carriage house, additional floors, or levels above. Add to that the transition from print-based systems to more digitally intense marketing. Where once there was an elegant structure on a

Jane Lawler Smith, MBA

See JANE LAWLER SMITH, page 4

THE ZWEIG LETTER JUNE 6, 2022, ISSUE 1444

TRANSACTIONS INTERACT BUSINESS GROUP OFFICIALLY JOINS RDG PLANNING & DESIGN RDG Planning & Design, a nationally recognized multidisciplinary design firm, has acquired Interact Business Group, the country’s premier authority on strategic business planning for public safety training facilities. The acquisition transforms a decades-long successful partnership into an integrated company offering business planning, feasibility studies, and the design of public safety training centers. “The RDG+IBG collaborative partnership is built on a highly integrated teaming experience we’ve developed more than 20 years serving public safety clients

across the country,” said RDG Partner Frank Buono. “Our combined experience and knowledge will allow our clients to have the best of both worlds to better serve their communities.” RDG and its predecessor companies have been collaborating with clients to create meaning together since 1965. The firm’s Public Safety market has completed more than 100 public safety training center planning and design projects across 19 states, supporting more than 3.2 million training hours annually for the nation’s public safety- first responders. Operating for more than 25 years, IBG is recognized as the national authority in strategic business

planning for public safety training centers and has completed more than 78 public safety training center strategic planning projects in 25 states. IBG’s team of experienced business planners will continue to collaborate with public safety jurisdictions and design firms working in the public safety sector. “The need for innovative, thoughtful, forward-thinking training for law enforcement, fire and EMS is clear in cities throughout the nation. We look forward to working together to create training facilities that provide enormous value to first responders and their communities,” said Buono.

assistant, a peer, a co-worker from a different department, or a professional mentor. Talk them through your structure. What are their struggles, confusions, and questions? Is their impression that of a well-thought-out arrangement or more of an escape room experience? If you detect cracks in your foundation, it’s always advisable to look to the pros. On This Old House , Tom Silva lays out some basic steps for foundation repair that could be applied to our marketing: 1. Chisel away as needed from the inside and the outside. For marketers, chiseling away will take the form of deleting or archiving old materials and files. It is important to establish guidelines to differentiate between what materials are just plain old and what materials are core to your work. Old files can be deleted and will make accessing your most recent work faster. If you don’t want to delete, archive. But if you archive, you should revisit your archive at a pre-determined date or interval. Maybe those files really can be deleted. Conversely, if you find you are copying files from the archive repeatedly, you can always bring those materials back into the core. 2. Mix up your new material to fill any gaps that are left. With old material out of the way, gaps in your marketing foundation may be evident. Spend time evaluating what is missing and creating new materials to fill the void. 3. Prepare the surface for the new material and apply. Before initiating your changes, be sure to prepare yourself, your team, or your entire organization for what is to come. Then, apply your changes. Save the quirky and teetering for the movies. In marketing, it is time to re-build it well. Jane Lawler Smith, MBA, is the marketing manager at Derck & Edson, LLC. She can be reached at jsmith@derckandedson.com.

JANE LAWLER SMITH, from page 3

solid base, now teeters a Tim Burton-esque quirky creation or perhaps a fantastical monstrosity. How long can such a structure stand in the real world? Is it time to shore up or replace your marketing foundation? Going back to the field of construction, the answer may be yes. Bowing walls, leaks, cracks, and crumbling mortar – these are all signs that foundation work might be necessary. If a second or third floor is desired, often the original foundation cannot bear the weight so it simply must be rebuilt. Likewise, in marketing, there are signs too. Consider these questions: ■ ■ Are there signs of weakness? ■ ■ How long does it take to drill down to the files you need for a promotional or proposal effort? ■ ■ Is it just as easy to locate new files as go-to files? ■ ■ Is it equally easy to find project files and data from the various stages of project design as well as from final constructed reality? ■ ■ If there are multiple people on your marketing team, do you all save files according to the same conventions? ■ ■ If someone from outside of your marketing team needs to find a marketing resource, can they? What have you added?

■ ■ Office locations ■ ■ Target markets ■ ■ Geographical territories ■ ■ Service offerings

One way to gauge the health of your marketing foundation is to invite someone from the outside in – an intern, an

THE ZWEIG LETTER JUNE 6, 2022, ISSUE 1444

PROFILE

Steward of the firm: Kevin Eipperle President of FEH Design (Dubuque, IA), a full-service architectural, structural engineering, inter design team that’s creating a better world through design.

By LIISA ANDREASSEN Correspondent

E ipperle first developed an interest in architecture when, at the age of 12, he helped his mother to design a little cabin in the woods. He then went on to help build it with his father and brothers. He was adept at math, art, and details and as time wore on, he decided to blend the three into what would turn into a lifelong career. Today, he and his team generate great design solutions and they have fun doing it. And, he’s doing it at a firm that’s been around since the late 1800s! “We have existed since the 1800s. The ownership has been passed down successfully for a long time,” Eipperle says. “We are a corporation with 16 shareholders of different levels of stock. We keep an ownership attitude, but also one of stewardship of the firm.” A CONVERSATION WITH KEVIN EIPPERLE. The Zweig Letter: Collaboration and teamwork seem important to you. Can you tell me about a recent brainstorming session that was particularly inspirational and why?

Kevin Eipperle: One great example is during the design of the new Galesburg Public Library. The design team was getting together to generate ideas for making the children’s area special. One of us mentioned the idea of connecting a theme to the community. Carl Sandburg was a resident, and we got the idea to connect him as a famous local author to the library. A couple of his children’s books had great stories and we each just kept building on each other’s ideas in an excited and intelligent way. It got everyone energized about the whole area of the building. The client loved the connections too. TZL: How has COVID-19 permanently impacted your firm’s policy on telecommuting? KE: One of the things that we love most about design is the collaboration. Collaborating remotely is not as efficient or productive. You lose the energy that you get from working shoulder to shoulder when you are working virtually. Remote workers lose the opportunity to learn by being around the veterans. It is clear that any designer working remotely

THE ZWEIG LETTER JU

will have a truncated learning and training experience. Their counterparts will get more experience, learn more, and build stronger relationships, and be at an advantage over them. We believe that any firms that embrace remote working on a large scale for long-term solutions will not be as well positioned, with experienced staff, to serve their clients. We have not changed any policies for that beyond the COVID needs. TZL: When did you become president? What was your role prior to that and when did you start with the company? KE: It became official in January 1992, but it was decided a couple of years earlier as a part of our transition planning. That gave me lots of time to learn the role. I started with FEH Design in September 2011 by starting a branch office in my home. We built the office one staff member at a time as we grew our client base. Within six months we landed a $30 million project. I have managed this office since then. TZL: How much time do you spend working “in the business” rather than “on the business?” KE: Even though I serve as president, I spend most of my time serving our clients or getting new clients. Our leadership culture at FEH Design has always been that way. We are all architects, and we love the work. TZL: Trust is essential. How do you earn the trust of your clients? KE: Honest communication is the base of any relationship. Some grey hair is one way, but real experience and friendship is better. Friendship is built on trust. If you make a sale for a project, you can make some money, but if you make a friend, you can earn a fortune in every way. TZL: What’s your overall, number one priority for the firm right now? KE: Like most other firms, staffing is critical. We lost a few staff due to retirements and transition to other firms recently, so we are building an elite team across our four locations. The integration of key staff at appropriate office locations keeps us all focused on a single entity/one company mindset. That is a key to sustaining our 125-year-old firm. TZL: Diversity and inclusion are lacking. What steps are you taking to address the issue? KE: Diversity is all relative. Things are a lot different than they were 40 years ago. When I graduated from college, there were no female architecture students in my class. They had

either dropped out, went to another school, or changed majors. There were, however, many nationalities represented. Twenty years ago, I served on an advisory council for a college of architecture. We recognized that we could not hire for diversity as a profession unless a diverse population was graduating from colleges. At the university advisory council, it became clear that we could not recruit a diverse population of students unless those high school students saw role models and they were encouraged by practicing architects to pursue our field. We currently engage high school students through a BSA Scouts Career Exploring program and we sponsor an Explorer Post in our office to teach about architecture and engineering. In the past we have even taught architecture classes to elementary school students. There is gender equity in the firm and the ownership is balancing as well. “Architects have a habit of putting in lots of time every week. There are many factors driving that, from passion about the art of creation, to serving our clients at the highest level, to keeping our bottom line strong. Balancing that with personal time to recharge and enjoy family is critical.” TZL: What’s one of the greatest challenges you see ahead for the industry as a whole? How is your company working to meet that challenge? KE: I think an important one is creating work- life balance. Architects have a habit of putting in lots of time every week. There are many factors driving that, from passion about the art of creation, to serving our clients at the highest level, to keeping our bottom line strong. Balancing that with personal time to recharge and enjoy family is critical, especially considering all the demographic balancing in the profession. TZL: What benefits does your firm offer that your people get most excited about? KE: At the start of the year, we talked about benefits with each staff member. We wanted to be sure we were providing what people need and want. We looked at everything.

HEADQUARTERS: FEH

Design doesn’t have a

headquarters. It has four

physical locations with

owners in each.

NUMBER OF

EMPLOYEES: 47+

YEAR FOUNDED: 1898

OFFICE LOCATIONS:

■ ■ Sioux City, IA

■ ■ Des Moines, IA

■ ■ Dubuque, IA

■ ■ Oconomowoc, WI

MARKETS: All

SERVICES:

■ ■ Architecture

■ ■ Interior design

■ ■ Structural

See STEWARD OF THE FIRM, page 8

engineering

UNE 6, 2022, ISSUE 1444

The FEH Design team.

STEWARD OF THE FIRM, from page 7

Compensation is, of course, critical, but people want trust in flexibility. That trust has to be a two-way thing. It is also true that we have great benefits in healthcare and the like, so those things may get taken for granted by some. TZL: Ownership transition can be tricky, to say the least. What’s the key to ensuring a smooth passing of the baton? What’s the biggest pitfall to avoid? KE: With FEH design, there is pressure to be sustainable in our practice. We have existed since the 1800s. The ownership has been passed down successfully for a long time. We are a corporation with 16 shareholders of different levels of stock. We keep an ownership attitude, but also one of stewardship of the firm. We give nice bonuses at the end of the year to staff who are key to our success for that year. We are strong financially and we offer ownership to staff members who prove themselves. TZL: The SPARKs sessions are interesting. How did the idea come about and how long has the company been doing them? KE: A SPARK session is a fast-paced, engaging, and highly-focused design process. We’ve been using public and private SPARK sessions for a very long time. On my second day of employment, I was pulled into a full day SPARK workshop while training in another office. It was a great experience. These engaging sessions really set us apart from the competition. We’re a team of SPARK plugs. TZL: How many years of experience – or large enough book of business – is enough to become a principal in your firm? Are you naming principals in their 20s or 30s? KE: FEH Design has a policy that includes a long list of performance- based achievements to be considered to be elected an associate principal. At that level, staff are able to purchase small percentages of the company ownership. Years of experience and book of business are not currently written requirements for that advancement but both are certainly considered as a part of the evaluation for advancement.

FEH Design’s mascot, Jersey.

THE ZWEIG LETTER JUNE 6, 2022, ISSUE 1444

OPINION

Who should assume the risk?

E ngineering, procurement, and construction contracts, or EPC contracts, are a type of construction contract between parties where the contractor is responsible for the engineering, procurement, and construction activities to deliver a completed project to the owner within a predefined time and cost. It is in the interest of both the project owner and contractor to critically review risks and allocate them to the party most capable of controlling them.

Sol Sim

Here at SCS Engineers, we’ve seen an increase in demand for EPC delivery on our largest projects, most notably in the renewable natural gas sector. The RNG market is exploding due to the generous subsidies aimed at addressing emissions linked to climate change. This drive to take advantage of the lucrative incentives is steering developers and owners to the EPC model to “fast track” project execution and get to production in the shortest time possible. In our current environment, where supply chain issues and labor shortages are commonplace, the ability to procure major equipment and begin site development prior to final design completion can result in material time savings.

While speed to market in order to achieve return on investment is arguably one of the biggest drivers for the push toward the EPC delivery method in the RNG project space, there are other key advantages worth noting. EPC contracts are more common for larger “mega-projects” where the pool of qualified and financially capable contractors is limited. Negotiating with a qualified EPC contractor can provide early cost certainty and a single point of responsibility that allows for easier and more flexible project financing for the owner. As an owner, selecting EPC as the contract delivery method can be a straightforward decision. But negotiations with the contractor may be challenging,

See SOL SIM, page 10

THE ZWEIG LETTER JUNE 6, 2022, ISSUE 1444

ON THE MOVE GZA WELCOMES

CHRISTOPHER

as a project manager at O’Leary Construction, Inc., a global engineering, management, and development contractor. He has worked with clients such as Con Edison and National Grid on several civil construction projects coordinating project permits, project staff, material handling, as well as generating daily reports, performance statements, invoicing, and project close out documents. GZA CEO Pat Sheehan, said, “Chris Anastasiou brings over a decade of industry knowledge in specialty construction management and site remediation throughout the greater New York and Long Island regions. His leadership and in-depth experience as a successful project manager will expand GZA’s capabilities with our local long-term energy projects and provide excellent services to our clients in the metropolitan area.”

Anastasiou earned his bachelor’s degree in environmental sciences from Stony Brook University on Long Island and holds certifications in E-Railsafe contractor safety, Applied Groundwater Flow & Contaminant Transport Modeling, National Oil Heat Research Alliance Oil Technician, and is a New York State Certified Asbestos Inspector. He also is a current member of the New York State Council of Professional Geologists and the National Groundwater Association. GZA is a multi-disciplinary, employee- owned firm providing geotechnical, environmental, ecological, water, and construction management services. GZA’s more than 700 professionals are based in 30 offices in New England, the Mid-Atlantic, and the Great Lakes States.

ANASTASIOU CONSTRUCTION

SENIOR

MANAGER GZA GeoEnvironmental Inc., a leading multi- disciplinary firm providing ecological, geotechnical, environmental, water, and construction management services, has named Christopher Anastasiou as a senior construction manager based in GZA’s Manhattan office. Anastasiou has more than 18 years of experience in project and construction management in commercial development and redevelopment and environmental remediation consulting throughout the New York metropolitan areas. He brings GZA deep expertise in cost estimation, contractor and subcontractor coordination on behalf of clients, health and safety plan preparation, and related client services. Prior to joining GZA, Anastasiou served

responsibilities. This is an example of where well-defined contract allowances for time extensions due to delays outside of the contractors control can help establish a contractor/ owner relationship centered on teamwork, trust, and transparency, which will benefit the project. Dr. Patricia Galloway summarizes this point very well in a paper titled “The Art of Allocating Risk in an EPC Contract to Minimize Disputes.” “Every risk has an associated price, whether that be visible or hidden,” Galloway writes. “Visible risk cost shows up as project contingency or insurance costs and can be compared. It is the onerous contract clauses that promote hidden costs. How risk is allocated will have a significant determination on how a project is financed. Owners can certainly transfer risk to the contractor but need to recognize that in doing so, there is a cost to that risk premium. Allocating risk to the party most able to control and manage it is always a good starting point. Innovative risk sharing arrangements have become the best method of allocating risk and reducing the total contract price. Carefully thought out contract clauses relative to risk allocation and risk exposure limitation that do not grossly and inequitably allocate all the risk to the contractor positively impacts overall project performance and the owner-contractor working relationship.” The next time you negotiate contract terms, remember to allocate risk to the party in the best position to control the risk. Then do not be afraid to get creative about clearly defining baseline conditions with fair incentives and penalties that encourage both parties to do the right thing. Sol Sim is vice president at SCS Engineers. He can be reached at ssim@scsengineers.com.

SOL SIM, from page 10

and this is often the longest and most arduous phase of the project. Allocating and monetizing risk is usually what bogs down contract negotiations. But if owners and contractors take more of a team (versus adversarial) approach to identifying and allocating risks, the process will go much smoother. Experienced owners and contractors can alleviate the stress involved when negotiating risk terms, because they have the ability to identify possible risks at early stages of project development. However, simply identifying potential risks is only part of the process. Allocating them is another. Owners may try to shift the bulk of the risk to the contractor, as long as they can afford the associated fee increase. But speaking as a contractor, I feel that accepting risk that is out of our control can lead to mistrust. It is in the interest of both parties to critically review risks and allocate them to the party most capable of controlling them. Some owners believe that if the risk is allocated to another party, the risk simply goes away – but that is not the case. Here at SCS, we see this risk allocation balancing act most notably in regards to the project schedule. Our RNG clients are eager to begin producing RNG as soon as possible in order to realize return on their investment. Our contracts may contain fairly significant liquidated damages, which are often an owner’s best recourse for mitigating the risk of project delays. While most contractors understand there are real costs for not meeting project schedules, it is important to acknowledge that there are always owner responsibilities that can have an impact on the schedule. Land use and environmental permitting, which typically begin well in advance of EPC contract negotiations are some of the more typical owner

THE ZWEIG LETTER JUNE 6, 2022, ISSUE 1444

FROM THE FOUNDER

The joys of simply doing work

Where are you now in terms of billable work versus business stuff? Are you happy with the mix?

I have always felt there was something wrong about how so many architects, engineers, planners, surveyors, and others with a technical or design discipline background want to get out of doing what they do as quickly as possible so they can become managers. It just doesn’t seem right to me. It’s not that I don’t understand the value of being a good manager and the skills it takes to manage people and a business. I do. I have devoted my entire professional career to helping people develop those skills so they and their companies can be more successful.

Mark Zweig

But the problem – when I see firm principals who are only 10-20 percent working on “billable” projects – is multifaceted. Here are my thoughts: 1. It’s hard to know how long things take if you don’t do it yourself. This makes budgeting and setting fees more difficult. 2. It’s hard to know who in the business is really good at what they do if you don’t work with them and alongside of them. This makes deciding who gets paid how much or who to promote more difficult. 3. It’s hard to inspire the people who are doing the work if you don’t demonstrate both a

competence in it yourself and a willingness to do whatever it is you will ask someone else to do. Leading by example is always the most powerful form of leadership. 4. It’s hard to stay current in your discipline and in knowledge of the tools for doing the work if you don’t do it yourself. That could lead to obsolescence. 5. Work could become less satisfying. Projects have a beginning and an end. That is very gratifying. Management of a firm, however, never has an end. It just goes on forever until

See MARK ZWEIG, page 12

THE ZWEIG LETTER JUNE 6, 2022, ISSUE 1444

TRANSACTIONS W.E. O’NEIL CONSTRUCTION CO. HAS ACQUIRED DCA CONSTRUCTION Zweig Group, a full-service AEC management advisory firm, announced its client W.E. O’Neil Construction Co. has acquired DCA Construction, a prominent general contracting firm based in Austin, Texas. The acquisition marks an exciting opportunity for W.E. O’Neil to formally expand its operations into the Texas market, where it has completed several projects for long-time clients over the last two decades. Zweig Group advised W.E. O’Neil through the acquisition. The deal team included Zweig Group managing principal Jamie Claire Kiser; advisor Justin Ramirez; and senior analyst Andy Chavez, CM&AA. “We are grateful to have been a part of bringing these two outstanding and reputable companies together,” Ramirez said. “With W.E. O’Neil being an ESOP, the primary beneficiaries of this combination of entities will be the employees of DCA who will now become owners of the company for which they have dedicated their careers. We look forward to seeing the impact on the Austin market that results from the combination of more than 110 years of construction experience.” W.E. O’Neil Construction has seen steady growth since its founding in 1925. Today, the firm is a 500-person, 100 percent employee-owned company. W.E. O’Neil’s award-winning family of construction

companies is recognized as an industry leader. Its longevity can be attributed to its excellent staff of professionals, its integrity, its commitment to customer satisfaction, and its ability to embrace technology. W.E. O’Neil’s combination of the financial strength of a large national contractor and the responsiveness of a small company brings the best of both worlds to its clients. DCA has grown significantly since its founding in 2006. Led by Randy Don Carlos and Kevin Foltermann, the firm performs a mix of negotiated and lump sum work, much of which is relationship- based with repeat customers. DCA’s primary focus is on commercial construction in and around Austin. “We’re thrilled to welcome DCA to the company and look forward to combining the reputation and relationships they’ve established in the Austin market with our expertise and financial resources to create many new opportunities,” stated Brian Ramsay, CEO of O’Neil Industries, W.E. O’Neil’s parent company. As the construction market grows in Texas, the acquisition presents exciting possibilities for the firm’s employee- owners, in terms of project and career opportunities, as well as expanded depth and capabilities to serve W.E. O’Neil’s clients in Texas and nationwide. “W.E. O’Neil shares many of the same values we do,” said Randy Don Carlos, president of DCA. “They were a natural

fit to join forces with, and the acquisition presents tremendous advantages for our employees and our clients. We’re excited about the expertise they bring to our team, which will allow us, together, to pursue projects in the Austin market we may not have been positioned to previously.” Zweig Group, three times on the Inc. 500/5000 list, is the leading research, publishing, and consulting resource for the built environment. The firm provides strategy, mergers and acquisitions, business valuation, ownership transition, marketing, business development, market research, financial management, project management, recruiting and executive search services nationwide. Zweig Group also provides a comprehensive suite of products including industry reports and surveys, executive training, and business conferences covering virtually every aspect of AEC firm management. The firm’s mission, Elevate the Industry, has five tenets: promote, diversify, educate, change, and celebrate. Zweig Group’s vision is to facilitate action in pursuit of elevating individuals, firms, and thus the industry. More than a mission, this is a movement to advance the AEC profession, creating a world that celebrates the built environment and recognizes its impact on individuals, communities, and commerce.

work versus business stuff? Are you happy with the mix? If not, maybe you should do more of what makes you happy and look for other people to do the stuff you don’t want to do. There is a lot to be said for the simple joys of doing work! Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com. “Where are you now in terms of billable work versus business stuff? Are you happy with the mix? If not, maybe you should do more of what makes you happy and look for other people to do the stuff you don’t want to do. There is a lot to be said for the simple joys of doing work!”

MARK ZWEIG, from page 11

the firm is no more. Not to mention engineering and design professionals went to school to do engineering and design because that is what they were interested in. If they wanted to be in business, they would probably have business degrees. Obviously, some people do feel that management and business are more intellectually stimulating and more challenging. I certainly understand this myself. That is why so many owners and managers of firms in this business do go back to school for business education or self-educate themselves on the subject. But the point is, there is an ideal time to make that switch if you are going to make it, and it doesn’t have to be a full-time job where you shut off project work and now work “on” the firm. It can be gradual and the amount of each varies widely. Think about yourself. Where are you now in terms of billable

THE ZWEIG LETTER JUNE 6, 2022, ISSUE 1444

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