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BUSINESS NEWS FLUOR SELECTED FOR POSITION ON GLOBAL CONTINGENCY SERVICES MULTIPLE AWARD CONTRACT III Fluor Corporation announced that it has been awarded a position on the Global Contingency Services Multiple Award Contract III by the United States Naval Facilities Engineering Systems Command Pacific. As one of six companies selected for the indefinite delivery/indefinite quantity contract, Fluor is eligible to compete for specific task orders with a combined value not to exceed $2 billion for up to 102 months. The contract provides for the ability to quickly deliver short-term facility support services in response to natural

disasters, humanitarian efforts or military actions. Work will be performed at various locations throughout the world, including remote locations. “This award builds on our more than 100-year history of providing services to U.S. government and commercial clients often in some of the toughest and most remote environments in the world,” said Tom D’Agostino, group president of Fluor’s mission solutions business. “The contract’s scope of work fits well with what we do best – providing high quality and rapid response of contingency construction, humanitarian assistance and disaster recovery support in difficult and demanding situations.”

NAVFAC, the oldest of the United States Navy’s System Commands, is committed to Navy and Marine Corps combat readiness. Fluor Corporation is building a better world by applying expertise to solve its clients’ greatest challenges. Fluor’s 30,000 employees provide professional and technical solutions that deliver safe, well-executed, capital-efficient projects to clients around the world. Fluor had revenue of $15.5 billion in 2023 and is ranked 303 among the Fortune 500 companies. With headquarters in Irving, Texas, Fluor has provided engineering, procurement and construction services for more than 110 years.

change. This year, insurers raised a new wrinkle on climate change with some uncertainty over whether AEC firms can adapt to designing to address more extreme and complex weather conditions not yet contemplated by existing construction codes. 10. Watch looming risks of AI. As AEC firms begin to embrace AI opportunities, they need to navigate potential regulatory and legal compliance issues given the largely unregulated nature of AI in the workplace. Those adopting AI should reevaluate existing policies to accommodate AI deployment in the context of varied federal and state laws. They also need to address employee concerns about job security as they adopt AI. 11. Insurers continue to balance competition with sound underwriting. Even as insurers providing professional liability coverage compete for AEC business, many are focusing on the most desirable risk segments while being relentless in applying sound underwriting discipline across their entire portfolio. 12. AEC firms must remain diligent about risk management. In this environment, design firms need to approach their risk management with heightened diligence that encompasses all aspects of their business – from client and project selection to choosing and managing subconsultants, maintaining effective quality control, performing thorough contract reviews, ensuring proper contractual risk allocation, and providing timely documentation of communication with owners and project participants. Contact info@amesgough.com to obtain a complimentary copy of the Ames & Gough survey, PLI Market 2024: A/E Firms See Steady Growth, Evolving Risks, and Inflation-Driven Costs . Jared Maxwell is vice president and partner at Ames & Gough, and Cady Sinks it assistant vice president and partner at Ames & Gough. Jared Maxwell can be reached at jmaxwell@ amesgough.com; Cady Sinks can be reached at csinks@ amesgough.com.

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that may lead to larger awards, higher defense costs and greater claim severity. 5. Availability of larger professional liability limits declines. Most insurers surveyed reported consistent availability of professional liability insurance limits. However, only 40 percent indicated they can provide limits exceeding $5 million, a huge drop from two-thirds of insurers willing to offer this capacity level in the 2023 survey. 6. AEC firms with higher limit requirements need a plan. When faced with owner requirements for higher professional insurance limits of liability, AEC firms might try negotiating with owners to check if higher limits are warranted. If so, they might explore alternative structures, such as specific additional limits endorsements/project excess or review their program structure and build layers with multiple participating insurers. 7. Most insurers target rate increases on accounts with poor loss experience. This year, 75 percent of the insurers surveyed plan to target rate increases on accounts with adverse loss experience; 56 percent will target firms with what they consider higher risk projects, such as condominiums and other residential construction, street/ road, highway, and infrastructure. The same percentage plan to target higher risk disciplines, including structural engineering, mechanical engineering, civil engineering, and architecture. And 25 percent plan increases for their entire book of business. 8. Insurers foresee rebound in AEC firm M&A. Although M&A activity among AEC firms slowed in 2023, insurers surveyed believe a resurgence of transactions is likely should interest rates begin to stabilize. Meanwhile, they continue to apply careful underwriting to firms involved in combinations with some adding questions about such growth plans to their new policy and renewal applications. 9. New concerns over AEC firms’ ability to address climate

THE ZWEIG LETTER JUNE 10, 2024, ISSUE 1541

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