TZL 1443 (web)

May 30, 2022, Issue 1443 WWW.ZWEIGGROUP.COM

TRENDLINES

Value per EBITDA

The roundtable, although now almost a thousand years old, is providing tremendous value to AEC firm leaders. The power of the roundtable

In Zweig Group’s 2022 Valuation Report of AEC Firms , the disparity in value per EBITDA among valuations done internally by formula (4.34) relative to those done by an independent business appraiser (3.36) is shown. Overall, valuations performed by an independent business appraiser resulted in value ratios that were about 18 percent higher than valuations calculated internally by way of formula. Participate in a survey and save 50 percent on the final or pre- publication price of any Zweig Group research publication.

T hree years ago, Zweig Group launched our “experience” themed leadership roundtables. The first two were held in Kentucky around tours of the various bourbon distilleries that produce 95 percent of the world’s bourbon. The rich family history and how these distilleries approach their business combined with the explosion of demand for bourbon was an inspirational backdrop for these events. The real benefit, however, is getting a group of AEC firm leaders together who are willing to share their struggles and successes and to be able to both receive and give advice. The environment was rich. The Round Table originated as King Arthur’s famed table in the Arthurian legend, around which he and his knights congregated. As its name suggests, it has no head, implying that everyone who sits there has equal status. Over my more than 25 years in this industry, I’ve witnessed the evolution of leaders in AEC becoming not only open to sharing their challenges but their magic bullets as well. We’ve become comfortable helping each other as we realize there is plenty of work to go around and elevating our firms as well as the industry requires us to work together. The roundtable, although now almost a thousand years old, is providing tremendous value to leaders in AEC firms. This is why I am delighted that after two years of being unable to conduct these events, we are hosting our first in-person roundtable next month in Dallas. Unlike previous roundtables, this event is like two events in one. We are hosting several industry experts who will share powerful insight through short talks and panel discussions, with the roundtable sessions in between and themed around the areas of discussion. Each attendee will be able to choose 18 topics they want to discuss over the day-and-a-half event. It really will be an innovative event with a unique structure that allows attendees a lot of time to discuss exactly what they want to learn more about while getting access to experts on some of the industry’s greatest challenges. Roundtable topics will cover every area of the business including recruiting, retention, scalable growth, succession planning, cybersecurity and IT, the role of the CEO, risk management, M&A, private equity, flexible work policies, training and development, compensation and incentive structures, arbitration versus litigation, corporate giving programs, the role of the CSO, building a motivated and aligned leadership team, creating a positive and productive

Chad Clinehens, P.E.

FIRM INDEX AECOM..........................................................................2

TYLin............................................................................ 10

Universal Engineering Sciences.............12

VMDO............................................................................ 6

Ware Malcomb........................................................4

MORE ARTICLES n NEA MAY POOLE: A call for rethinking AEC education Page 3 n Creating opportunities: Rob Winstead Page 6 n JARED MAXWELL & CADY SINKS: Still navigating the fallout Page 9 n MARK ZWEIG: Why the AEC business? Page 11

See CHAD CLINEHENS, page 2

THE VOICE OF REASON FOR THE AEC INDUSTRY

BUSINESS NEWS AECOM TO PROVIDE DESIGN AND ENGINEERING SERVICES TO TXDOT MARITIME DIVISION AECOM, the world’s trusted infrastructure consulting firm, today announced it has been selected by the Texas Department of Transportation to provide design and engineering services for its Maritime Division. In this role, AECOM will deliver services required for port, waterway, and intermodal freight planning for the Texas port system, which includes the major deep-draft ports of Port Houston, the largest in the U.S. by waterborne tonnage; Port of Corpus Christi; Port of Beaumont; and Port Freeport, among others. “Texas is a port-driven state and with the recent attention on the global supply chain, there has never been a more critical time than present to ensure its systems remain robust,” said Jennifer Aument, chief executive of AECOM’s global Transportation business. “We are excited to bring our world-class technical teams to these high-value projects that will help enhance port efficiency and resiliency, expand the movement of freight through intermodal systems, and create new jobs – bolstering the state’s standing as an essential trade gateway to the world.” The scope of AECOM’s work includes project management and planning, economic analysis, environmental and permitting, public involvement, technical report development, geotechnical exploration, and signage and illumination design. This work is a continuation of services AECOM has provided to TxDOT

Maritime since 2016 while developing deliverables such as the Port Mission Plan and Investment Strategy, which highlights the funding needs of the Texas port system. “We are honored to have a dynamic history supporting the TxDOT Maritime Division and look forward to strengthening our partnership in this new role,” said Travis Boone, chief executive of AECOM’s U.S. West region. “Texas’ maritime system is a vital part of the state’s transportation network and includes several of the nation’s fastest growing ports by export revenue. We understand the improvement opportunities that will lead to more effective and safer transportation systems and look forward to leveraging our cross- discipline service offering to help deliver these key capital investments.” Founded in 2012, the TxDOT Maritime Division promotes the development and intermodal connectivity of Texas ports, waterways, and marine infrastructure and operations. The state has eleven deep- draft ports, eight shallow-draft ports, and two recreational ports that are critical to its economic growth. AECOM is the world’s trusted infrastructure consulting firm, delivering professional services throughout the project lifecycle – from planning, design and engineering to program and construction management. On projects spanning transportation, buildings, water, new energy, and the environment, AECOM’s public- and private-sector clients trust the firm to solve their most complex challenges.

Interested in learning more

about the projects and ideas driving the AEC industry forward? Learn more with Civil+Structural Engineer Media.

PO Box 1528 Fayetteville, AR 72702

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.

CHAD CLINEHENS, from page 1

culture, leadership transition, getting more done with fewer people, the economic outlook, and more. This will be a powerful day-and-a-half to focus on you and your firm as you learn and collaborate with industry peers. It will also provide a great connection to keep the conversation going at ElevateAEC in September where we will have some follow-up activities for this group. I hope to see you in Dallas June 23-24 as we reharness the power of the roundtable! Click here to register or to find out more info. Chad Clinehens , P.E. is Zweig Group’s president and CEO. Contact him at cclinehens@ zweiggroup.com.

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 MAY 30, 2022, ISSUE 1443

OPINION

Universities do their students a disservice if they leave their programs without a fundamental understanding of what the career they have chosen entails. A call for rethinking AEC education

I ’ve had many discussions with peers and recent graduates about the disconnect between an architectural education in the U.S. and the actual practice of architecture. Based on these discussions and my observations as the person responsible for hiring at our 40-person firm, I believe there is a strong argument for a significant shift in the curriculum and teaching methodology at architecture schools.

Nea May Poole, AIA, LEED, AP

In the past 20 years, I have had three interns leave the profession in under a year because it was so different from their expectations. A while back, I had a recent graduate (two months out of school) seriously ask me how long it would be before he was lead designer at the firm. I told him a strong designer understands, and is inspired by, codes, budgets, client needs, and of course, how a building goes together. Without that basis, a design is sculpture for someone else to make a reality. But this is not new; at the University of Virginia, my first class was taught by a “professor” who was 25 years old and had left one of the finest design firms in the world after just two years for life as an academic because he had no interest in the reality of architecture. However, on a positive note, the majority of our recent

graduates were thrilled to discover architecture was a much more colorful tapestry than their university ever indicated. They thrived on learning how buildings went together, grew confident as they coordinated with engineers and clients, and some were even genuinely curious to learn about codes. One of my favorite parts of mentoring is getting to take interns who have been working on a project to “their” jobsite for the first time. To get the perspective of recent graduates, I held a roundtable discussion with eight employees who had graduated within the last four years. They were from four-, five-, and six-year programs and half graduated from universities ranked in the top 15 of American architecture programs. The most common

See NEA MAY POOLE , page 4

THE ZWEIG LETTER MAY 30, 2022, ISSUE 1443

ON THE MOVE WARE MALCOMB HIRES REI TAKATA AS STUDIO MANAGER, ARCHITECTURE, IN WASHINGTON, D.C. OFFICE Ware Malcomb, an award-winning international design firm, announced that Rei Takata has been hired as studio manager, architecture in the firm’s Washington, D.C. office. In this role, Takata will help lead the studio and manage select projects. A registered architect in Maryland, Takata has more than 20 years of project experience including multifamily, adaptive reuse and higher education. He brings extensive experience leading complex, multi-million-dollar projects from schematic design through to

construction administration. Takata will utilize his in-depth multifamily market experience to further develop and strengthen the Washington, D.C. office’s multifamily portfolio. “We are thrilled to welcome Rei to our team. His depth of experience with significant projects in D.C. makes him a wonderful addition to this team,” said Mike Christensen, regional director for Ware Malcomb. “We look forward to his contributions and leadership.” Rei is a graduate of Catholic University of America, where he earned both a bachelor’s and master’s degree in architecture.

Established in 1972, Ware Malcomb is a contemporary and expanding full service design firm providing professional architecture, planning, interior design, civil engineering, branding and building measurement services to corporate, commercial/residential developer and public/institutional clients throughout the world. With office locations throughout the United States, Canada, Mexico and Brazil, the firm specializes in the design of commercial office, corporate, industrial, science and technology, healthcare, retail, auto, public/institutional facilities and renovation projects. Ware Malcomb is recognized as aHot Firm by Zweig Group.

Give students at least two semesters of experience with non-academics. The goal would be to have not only realistic projects, but to encourage enlightening in-studio discussions about handling clients and their expectations, and dealing with issues that inevitably arise, like zoning restrictions, neighborhood groups, environmental considerations, or how construction costs rising will impact a design. 2. Encourage or mandate a semester, or summers, interning with firms. 3. Allocate time for teaching at least a semester of drafting and reading construction-level plans. This would help the students with their in-school presentations, and it would also make them more prepared for the realities of working in this field and more valuable to employers. What is an architect who cannot draw or read construction documents? 4. Stop the archaic practice of all-nighters and hostile juries. It’s obvious that no one does their best work sleep deprived at 4 a.m. (how many of us had a classmate go the emergency room with an X-ACTO injury?) and making a person cry is cruel, not a productive critique. Moreover, this practice sets expectations that long hours, even all- nighters, are not only acceptable but to be expected in the workplace. This allows unethical employers to take advantage of these emerging professionals, setting expectations of more than 60-hour work weeks on a set salary as they “pay their dues.” Simply because we were subjected to this unproductive nonsense is not a reason to continue the practice. Architecture school is not a trade school nor should it be; a broader education improves critical thinking, reasoning, communication skills, and provides a more global perspective. However, universities do students a disservice if they leave their programs without a fundamental understanding of what the career they have chosen entails. Nea May Poole, AIA, LEED, AP is a principal and COO at Poole & Poole Architecture, LLC. Connect with her on LinkedIn .

NEA MAY POOLE , from page 3

negative comments were that school was too theoretical/ removed from the reality of architecture, did not prepare them for actually working in an office, and the projects often had ridiculous premises, for example, “design a grade school with a commercial drone landing site on the roof.” To a person, none had been taught or encouraged to take a class on any drafting program, though some could have chosen to take a one- semester CAD elective. All had been encouraged to pull all- nighters and had been in juries where students were berated until they cried. What they appreciated about their education was learning the basic concepts and language of architecture, learning to understand plans and sections, learning to think through issues and problem solving, honing presentation skills, and having the time for creative exploration. Of the eight, the one person who felt they had been well prepared had been in a six-year IPAL program that included three years working full- time in an office. Their answers to my last question was very telling and goes to the very heart of what I see as the basis of the problem with architectural education. I inquired how many of their professors were practicing architects or at least had solid experience as a practicing architect. Most of the IPAL graduate’s professors were practicing architects, since classes were after work – so the professors worked during the day then taught at night. After that, the answer was either no practicing architects taught their undergraduate program or there were one or two. No practicing architect teaching these students how to be an architect! Little wonder they graduated with no real idea of what it means to be an architect. I have four suggestions for improving the education of students aspiring to be architects: 1. The most fundamental change should be universities having more educators who are practicing architects. I understand the practical issues with this, but they would not have to be full-time staff; universities could have architects come in as visiting professors to teach a studio.

THE ZWEIG LETTER MAY 30, 2022, ISSUE 1443

PROFILE

Creating opportunities: Rob Winstead Principal at VMDO, an architectural planning and design firm that creates community-centered environments that connect people and place through design.

By LIISA ANDREASSEN Correspondent

A s a nationally-recognized expert in learning space planning and design as well as sustainability, Winstead is an advocate for exceptional learning spaces that blend thoughtful design with high performance goals. As principal and K-12 studio leader at VMDO (Charlottesville, VA), he provides firm- wide leadership and studio management that align with the company’s structure as one firm with multiple studios. “As a former director of sustainability, I’ve spent most of my career working to integrate sustainability into our work, process, and culture,” Winstead says. “We want all of our projects to be happy, healthy, and high-performing. We want the same for our firm and for our staff.” A CONVERSATION WITH ROB WINSTEAD. The Zweig Letter: Can you give me an example of a learning space your firm has designed that blends thoughtful design with high performance goals? Rob Winstead: We like to think all our projects possess both. While we have several that utilize solar technologies and

rainwater harvesting, my favorite examples are often more subtle in nature. For example, the renovation of Thurston Hall at George Washington University is scheduled to open fall of 2022. The project represents the significant expansion of our thinking about performance. This renovation of a 200,000-square-foot historic building, the largest first-year dormitory at GWU, preserves the historic integrity of the Foggy Bottom campus while extending the life of this important asset for the next 50-100 years. Due to complex extended use patterns, maintenance protocols, and centralized utilities, residence life projects are notoriously energy intensive buildings. Careful detailing of the envelope allowed us to honor the historic exterior while improving comfort and minimizing loads. Healthy materials, a new high performance HVAC system, and advanced lighting provide a high level of environmental quality while reducing energy use by 38 percent. Stormwater is managed on-site by using it for toilet flushing and landscape irrigation. The most exciting space in this project is a central courtyard that’s the heart of this living-learning community. Once a dim

THE ZWEIG LETTER M

lightwell filled with dirty puddles, pigeon feathers, and dead leaves, this space is being transformed through selective demolition and a variety of new plazas, gardens, terraces, canopies, bridges, perches, and views that connect students to the district, the campus, and one another. This goes beyond easily quantified measures of performance, like energy and water efficiency, and gets to the social side of sustainability. In a time when we’re all struggling with division and isolation, I can’t think of anything better than drawing students out of their rooms and into opportunities to live, learn, and develop as an inclusive community. TZL: Sustainability is a fundamental driver at VMDO. What are you doing to incorporate that concept on different levels – i.e., project work, culture, and design process? RW: As a former director of sustainability, I’ve spent most of my career working to integrate sustainability into our work, process, and culture. We want all of our projects to be happy, healthy, and high-performing. We want the same for our firm and for our staff. A major trigger for opening a Washington, D.C. office was the Clean Energy D.C. Act of 2018, where D.C. implemented a plan to become a net-zero energy city by 2032. We felt that we had expertise to offer and wanted to be part of leading that transformation. The office is really built around that mission and we have a number of projects underway that are creating a path to a net-zero energy future. It’s late in the game, but the industry has shifted dramatically. The AIA 2030 Commitment and Framework for Design Excellence are two good examples. Sustainability is no longer the “other,” but an integral part of good design. But, our progress is slow and we feel a tremendous sense of urgency to leverage our skills to address the most challenging issues of our time. TZL: Diversity and inclusion are lacking. What steps are you taking to address the issue? RW: As with many firms, we’ve struggled with how to make meaningful change in this area. VMDO was an early adopter of the JUST label, a program of the International Living Future Institute, which was incredibly helpful in aligning our firm operations along a third-party social justice rating system. After the murder of George Floyd, a grassroots movement among our staff helped us to start identifying ways we could take greater action, in terms of broadening the pipeline

to our profession for underrepresented groups, rethinking our hiring and operations and improving our work through the lens of equity and inclusion. We began scholarships at Hampton University and the University of the District of Columbia and we participate in mentoring programs and portfolio reviews. We’ve revamped our hiring process to reduce any unintentional biases, and our staff and leadership have gone through an extensive series of trainings to help us to understand identity and to not only recognize difference, but to leverage it. We’ve also been piloting some new community engagement tools and approaches, expanding our research protocols to better unearth the lesser-known histories of the places we work, and exploring a broadened definition of universal design. Finally, we’ve expanded our standard post- occupancy evaluation and developed with UC Berkeley’s Center for the Built Environment to incorporate questions around inclusion. There’s still a lot to do. TZL: Working as a mentor seems important to you. What are some key pieces of information that you always pass on to your mentees? RW: There are a lot of “Robisms” out there. Some are funny and, hopefully, a few are useful. These come with some frequency: 1. Design with love. In my opinion, great design comes from a genuine care for people, purpose, place, and planet. 2. Meet clients where they are, build relationships, and help them move forward. Rarely can you move a client from a two to a 10 in one project. It takes relationship building, time, and trust to do really challenging and aspirational projects. 3. You gotta read to lead. I’m a lifelong learner and VMDO is a learning organization. To continue to lead and innovate, we need to study our craft, explore our world, and continue to learn about issues that affect and shape our clients and industry. I love to travel and have an endless pile of books on my nightstand on a wide variety of subjects – business, design, sustainability, education, brain science, etc. I’m always interested in what other people are reading too. TZL: As a firm, you believe that an emphasis on quality and enduring design can transform a place and elevate the human experience. Can you give me an example of a recent project that has worked to achieve this and explain why? See CREATING OPPORTUNITIES , page 8

HEADQUARTERS: Charlottesville, VA NUMBER OF EMPLOYEES: 75 YEAR FOUNDED: 1976 OFFICE LOCATIONS: ■ ■ Charlottesville, VA ■ ■ Washington, D.C. MARKETS: ■ ■ K-12 ■ ■ Higher education ■ ■ Athletics ■ ■ Community SERVICES: ■ ■ Architecture ■ ■ Planning ■ ■ Interiors AWARDS: VMDO’s designs have achieved international and national acclaim from a variety of societies and associations, including: ■ ■ The American Institute of Architects’

Committee on Architecture for Education ■ ■ The Society for College and

University Planners

■ ■ The Association

of College Unions International ■ ■ Recipient in 2010 and

2017 of Top Ten AIA Committee on the Environment awards – the industry’s premier accolade for sustainable design

MAY 30, 2022, ISSUE 1443

CREATING OPPORTUNITIES , from page 7

RW: Lubber Run Community Center in Arlington, Virginia. Arlington is a rapidly urbanizing area and public green space is critical to the community. In addition, there’s a strong commitment to sustainable design and robust and authentic community engagement. The existing facility was beloved, but outdated, while the park was a highly-valued and heavily-used community asset, with significant green space and buffer for the adjacent waterway. Community needs had long exceeded the capacity of the site. In addition to needing additional outdoor program areas, the community needed 50,000 square feet of indoor program and more than 100 parking spaces. A conventional planning approach would have obliterated the site. Together, Arlington Parks & Recreation and VMDO conducted a series of public workshops where we learned how important equity, access, public health, and sustainable design were to this community. The team applied an empathetic approach to gathering cross-generational voices that informed the design of numerous blended spaces connected to nature, interweaving building and landscape. Taking advantage of existing topography, the team slipped a significant portion of the program and all the parking underneath the park, maintaining the stream buffer and mature vegetation, reducing the scale of the building on the park, and dramatically increasing the space available for outdoor programs. The end result is a community center and park that is greater and greener for all residents. It’s a space that elevates the human experience. “As a former director of sustainability, I’ve spent most of my career working to integrate sustainability into our work, process, and culture. We want all of our projects to be happy, healthy, and high- performing.” TZL: What benefits does your firm offer that your people get most excited about? RW: We have an exemplary retirement program, though the level of excitement probably directly correlates to an employee’s age. We help people pursue their interests and find their passion, and that means field trips, continuing education allowances, support for professional certifications and exams, an annual traveling fellowship, and for those who have been with the firm for a while, a sabbatical. TZL: How are you balancing investment in the next generation – which is at an all-time high – with rewards for tenured staff? This has always been a challenge, but seems heightened as investments in development have increased. RW: When our founding principals, majority shareholders at the time, retired in a relatively short timeframe, the second generation of leaders was made keenly aware of the financial burden of that buy-back. So, they came together and agreed upon a sustainable leadership plan, where the largest

VMDO staff enjoying a group outing.

shareholders began voluntarily selling shares at a steady rate early, and all principals agreed to begin selling their shares back to the firm when they turn 62. Further, we created the associate principal level, and offered shares to that group at a reduced cost. This serves as an “on-ramp” into ownership that generates returns on those shares that can be reinvested into the company. So, in general, the rate of share exchange remains relatively steady over the long-term, which also leaves more flexibility for investing in the next generation. TZL: What are some of your top goals for the firm in say the next five years? RW: Some of my top goals include: 1. Building our practice in Washington, D.C. to support the tremendous opportunities in the region. A number of communities in the area have established themselves as leaders in health, sustainability, and net-zero energy. A D.C. office allows us to better serve clients in the region and beyond and gives us access to a larger and more diverse pool of talent. 2. Meeting the goals of the AIA 2030 Commitment. This is the decade of de-carbonization, and we must do everything we can to bring our entire portfolio to net-zero energy by 2030. We know how to do it for new buildings, but it’s a massive challenge for renovations and certain building types. 3. Supporting the next generation of leaders. We’ve done a great job over the past decade or so transitioning leadership and ownership. We’ve just started the transition to a fourth generation, with an increased focus on diversity. A big part of my job is to help identify and develop those leaders, and then support them as they lead the firm into the future. TZL: A firm’s longevity is valuable. What are you doing to encourage your staff to stick around? RW: Create opportunities for others to do great work. Support them as they grow. Get out of the way.

THE ZWEIG LETTER MAY 30, 2022, ISSUE 1443

OPINION

Still navigating the fallout

E ven as the spread of COVID-19 infections appears to be waning, design firms may be dealing with the enduring effects of the pandemic for many months to come. Several insurers providing architects and engineers professional liability insurance expressed their concerns about the evolving risks facing their clients in 2022 and how this might Despite slowing infection rates, AEC firms and their insurers may still endure the effects of the pandemic for many months to come.

Jared Maxwell

be reflected in their rating plans and underwriting decisions. Here are some key insights from the Ames & Gough 2022 survey of 16 leading insurance companies providing professional liability insurance to AEC firms in the U.S. on critical concerns influencing their decision-making: 1. Economic and social inflation driving up claim costs. The threat of inflation now ranks among insurers’ top concerns that could impact professional liability claim costs and premiums this year. Besides economic inflation, insurers point to social inflation – especially increased litigation, broad interpretation of insurance policy coverages, plaintiff-friendly legal decisions, and larger jury awards – as a major driver of higher claim costs.

2. Supply chain disruptions may have ripple effects. One of the enduring impacts of the COVID-19 pandemic has been issues arising from supply chain disruptions. Notably, 94 percent of the insurers anticipate that supply chain interruptions will lead to potential claims for the AEC industry. These disruptions may trigger higher material costs, project delays, unavailability of critical materials, and higher costs fueling inflation and resulting in higher overall claim costs. 3. Fallout from the “great resignation.” The survey found 63 percent of insurers are concerned about the potential for the great resignation to result in employee shortages at AEC firms and claims. The most significant potential consequences involve

Cady Sinks

See JARED MAXWELL & CADY SINKS , page 10

THE ZWEIG LETTER MAY 30, 2022, ISSUE 1443

BUSINESS NEWS TYLIN MOVES UP TO NUMBER 31 IN ENGINEERING NEWS-RECORD’S 2022 TOP 500 DESIGN FIRMS TYLin, a globally recognized, full-service infrastructure consulting firm, announces that TYLin advanced to No. 31 in Engineering News-Record’s (ENR) 2022 listings of the Top 500 Design Firms, moving up four spots from 2021. The annual list is based on companies’ 2021 design services revenue.

TYLin continues to expand its global design expertise through its sector model, serving Buildings, Transportation, and Water clients worldwide. The firm ranked in these additional ENR categories: ■ ■ No. 8 Top 20 Design Firms (Transportation) – up three spots ■ ■ No. 12 Top 50 Designers in International Markets – up two spots

■ ■ No. 20 Top 100 Pure Designers – up two spots Founded in 1954, TYLin is a globally recognized, full-service infrastructure consulting firm committed to providing innovative, cost-effective, constructible designs for the global infrastructure market. With 3,200 employees working in 65 offices throughout the Americas, Asia, and Europe, the firm provides support on projects of varying size and complexity.

the adequacy of their insurance programs and status of any outstanding claims or liabilities. Under-insured risks can significantly change the terms of a deal or cancel it altogether. 8. High-risk projects/disciplines draw scrutiny. In pursuing new opportunities as they emerge from the pandemic, some design firms might consider widening their practice to encompass different projects or to expand their capabilities to include higher risk disciplines. It’s worth noting that, from an underwriting perspective, insurers continue to scrutinize what they consider higher risk projects, such as condominiums and schools, and high- risk disciplines, especially geotechnical engineering, structural engineering, and architecture. Of insurers surveyed, 77 percent plan to target rate increases to firms with high-risk projects or disciplines. 9. Underwriters sharpen focus on regional loss trends. As they continue to examine heightened exposures from an underwriting perspective, more insurers are turning their attention to states and jurisdictions either historically considered higher risk or with generally adverse loss experience. This year, 38 percent of insurers surveyed plan to apply rate increases to states in this category, such as California, Florida, New Jersey, and Texas. 10. Not the time to relax risk management. While the prospects of emerging from the throes of the pandemic are exciting news for all industries, now is not the time for design firms to relax any of their risk management measures. With the potential for worker shortages, inflation, supply chain issues, and escalating professional liability premium and claim costs, AEC firms are well- advised to maintain sound risk management. That includes practicing good contractual hygiene, ensuring timely incident and claim reporting, and carefully reviewing their cybersecurity measures, as well as those of their subs, and the adequacy of their related insurance protection. For a copy of the Ames & Gough Survey, PLI Market 2022: A/E Firms Face Headwinds Due to Adverse Economic Factors , email info@amesgough.com. Jared Maxwell, vice president and partner, Ames & Gough, and Cady Sinks, assistant vice president, Ames & Gough. Jared Maxwell can be reached at jmaxwell@amesgough.com ; Cady Sinks can be reached at csinks@amesgough.com.

JARED MAXWELL & CADY SINKS , from page 9

increased risks of design and technical errors, shortages of workers leading to project delays, and loss of institutional knowledge at design firms to keep projects on track and to anticipate and address potential issues. 4. Fears over growing cyber threats. The explosion of ransomware claims during the pandemic has resulted in large underwriting losses, which in turn are fueling cyber- insurance premium rate increases of 15 percent to 50 percent. Besides higher premium costs, design firms might see coverage restrictions, further scrutiny by underwriters of their cybersecurity practices, and exclusions or sublimits for losses arising from various types of cyber incidents. Firms failing to demonstrate appropriate cybersecurity protocols or that have experienced cyber incidents in the past may find coverage more difficult to obtain. 5. More insurers question “rate adequacy.” A growing number of insurers now wonder about the sustainability of competitive rates in the aftermath of a decade of relative rate stability amid rising claims. Thus, it may not be surprising that this year, 81 percent of insurers are seeking rate increases and 31 percent plan to apply higher rates across their entire business. 6. Addressing capacity crunch may take extra effort. Even as more clients require AEC firms to carry higher limits of professional liability coverage, insurers surveyed generally have a stable amount of capacity to meet those requests. Nonetheless, design firms and their insurance advisors may need to be creative in obtaining higher insurance limits. For instance, to save costs, they might opt for project-specific excess or negotiate with clients to validate requests for higher limits. In some cases, increased requirements may be outsized for the overall exposure. Further, when elevated limit requests are cascaded to subconsultants, they may be both impractical and unaffordable. 7. Heightened M&A activity calls for greater diligence. With AEC firms involved in some 400 mergers and acquisitions last year, insurers are carefully monitoring the impact of deals on the risk profile of the acquiring firm and the combined entity. In the meantime, AEC firms making acquisitions need to apply due diligence to all aspects of target firms – from their disciplines and client mix to

THE ZWEIG LETTER MAY 30, 2022, ISSUE 1443

FROM THE FOUNDER

Why the AEC business?

There are so many positive aspects of this industry, and it’s important that we keep reminding ourselves and our people why this is such a great business.

I consider myself incredibly fortunate for so many reasons. I have four daughters and one stepdaughter, each unique and perfect in their own ways. I have a great spouse and partner who cares for me and whom I respect. I am 64 and have no serious health problems and can still do pretty much anything. My mom is still alive at 101 and living in her own house. I get to work with young people and teach them everything I know about business as a college professor. I am so, so lucky.

Mark Zweig

I am also fortunate that I have spent my entire career working in the AEC industry. I want to talk about the professional services side of AEC, so for the purposes of this discussion, let’s just say the “C” in AEC stands for consulting. There are so many positive aspects of this industry. As leaders of our firms, I think it is important that we keep reminding ourselves and our people why this is such a great business. Here are some of the reasons this is the best industry to work in: 1. We don’t need a lot of capital to start one of these businesses. As someone who teaches “new venture development” and has a preference for bootstrapping, I have always liked service-

based businesses. They don’t require a lot of cash from their founders to start one. That means you probably won’t need outside equity, at least until you can grow to a certain size and maturity. And that, in turn, means you can control your own business and not have to work for anyone else. This is a big plus for AEC businesses. 2. We are doing something that is needed and beneficial for society. No one hires an AEC firm unless they need their help. Help with an environmental problem. Help with getting something built like a bridge, road, or school building. Help managing a capital improvements

See MARK ZWEIG , page 12

THE ZWEIG LETTER MAY 30, 2022, ISSUE 1443

ON THE MOVE UNIVERSAL ENGINEERING SCIENCES NAMES DAVID WITSKEN AS CHIEF EXECUTIVE OFFICER Universal Engineering Sciences, a leading national engineering and consulting company, has appointed David Witsken to the role of CEO. UES, recognized as the fastest- growing AEC firm in the U.S., continues to expand its operations nationally, with 67 branches in nearly 20 states and more than 3,100 professionals today. Witsken will be located at UES’ headquarters in Orlando and will begin later this month. Most recently, Witsken served as the president of BrandSafway’s Industrial, Energy, and Commercial business for the U.S., Canada, and Mexico. BrandSafway is a provider of services and products to the industrial, commercial and infrastructure end markets worldwide. Witsken worked in various global executive leadership roles throughout his 17 years at the company, including M&A, sales, and general management. During his tenure, BrandSafway completed 30 successful acquisitions and grew from $300 million in revenue in 2005 to $5 billion today. Previously, Witsken spent 18 years at General Electric in various leadership positions. He received a bachelor’s degree in mechanical engineering from the University of Cincinnati and an MBA from Westminster College.

“Dave’s of leadership in the industry and extensive experience driving growth positions him exceptionally well to lead UES in its next exciting chapter,” said UES Chairman Michael Burke. “In the past 18 months, UES has tripled in size through both organic growth and acquisitions. This includes notable project wins, as well as the successful completion of 13 strategic acquisitions. Looking ahead, we are excited to continue UES’ expansion across high growth geographies in the United States. I look forward to working closely with Dave and our talented leadership team to seize the incredible opportunity ahead of us.” strong track record “I’m excited to join UES at this moment of its journey,” said Witsken. “UES is poised to make a tremendous impact nationally. Between the national commitment to infrastructure spending and the increased population shift to the Sun Belt, there is a significant opportunity for UES to build stronger communities, serve more clients and create exciting career paths for our people.” UES, headquartered in Orlando, is a rapidly growing engineering and consulting firm with nearly six decades of experience in geotechnical engineering, construction materials testing, building code compliance, threshold inspections and environmental

consulting. UES is considered a pioneer of the industry and stands at the forefront of emerging technology, best practices, and influential legislature. Projects include both public and private clients, ranging from transportation and healthcare to commercial and education. UES engineers, geologists, certified inspectors, and scientists offer an unwavering commitment to excellence, approaching each project as an opportunity to cultivate enduring relationships with clients. UES has made a commitment to growing through strategic acquisition and organic growth. UES’ presence includes locations throughout the high growth markets in the South, Midwest and West, including Texas, Florida, Georgia, Alabama, North and South Carolina, Metro DC, California, Utah, Nevada, Missouri, Illinois, Kansas, Nebraska, Ohio, Kentucky, Tennessee, Mississippi, and Arkansas. UES was named number one on the Zweig Group Hot Firm List which honors the fastest-growing firms in the AEC industry. With nearly 3,100 professionals across 67 branches in nearly 20 states nationwide, UES consults on projects of all sizes to help deliver needed infrastructure and build safe and successful communities.

Not all businesses can claim that. Imagine what it would be like to run or work in a chain restaurant of some sort where every single detail of what to do and how to do it is laid out. 5. We work with extremely intelligent people. We have smart people in our companies and smart people as clients who can afford to hire us and build the stuff we create. Everything is better when you work with intelligent people. There is also a really great ethical standard with the professionals in our industry. 6. We can work from practically anywhere. We learned this one during COVID. U.S. firms in this business have always been the best, so we can also work anywhere around the globe. There is opportunity to travel and opportunity to work from home. What could be better than that? There are so many positive aspects of the AEC industry. It’s why I encourage all of my students and friends to try to get into it. Once you get in, you never leave! But if someone does leave, they will probably come back at some point! Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.

MARK ZWEIG , from page 11

program. Help planning a new affordable housing project. Help with hundreds or even thousands of things, all of which make people happier, safer, more efficient at their jobs, healthier, and improve the quality of life in our communities. AEC firms do GOOD things. I cannot imagine what it would be like to work in any industry that does bad things, like tobacco for example. Or one that hurts people financially, like gambling. Or to be in a company that sells a product that is already available from other brands that are its equivalent. 3. Our firms create really good jobs. We employ knowledge workers. All of the jobs in AEC firms are relatively high- paying, safe jobs where people get to work with other good people to do good things. What could be better than that? 4. We get to regularly exercise our creativity. Creative work is important to people’s sense of self-worth and well- being. This “business” offers unlimited opportunities to be creative in the projects themselves but also in how they are done and how the business is managed. That’s great!

THE ZWEIG LETTER MAY 30, 2022, ISSUE 1443

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12

Made with FlippingBook Annual report