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Effective remote work

Who are these private equity extraterrestrials, what do they want, and how long will they be here? Private equity

F I R M I N D E X Bowman Consulting Group Ltd. .............. 12 D.H. Charles Engineering, Inc. ...................10 NV5 Global, Inc. ......................................................4 Psomas ......................................................................... 6 Stantec.......................................................................10 Terra Associates, Inc. ........................................ 12 Wilson & Company, Inc. ....................................2 MO R E A R T I C L E S n HENRY LIANG: Work-life balance 3.0 Page 3 n Putting people first: Steve Margaroni Page 6 n ANDREW SCHWARZ: Creating a DEI task force Page 9 n MARK ZWEIG: Profitability tune-up Page 11 Zweig Group combined responses from this year’s AEC Workplace of the Future Survey and last year’s AEC Industry Outlook and Response to COVID-19 Survey to analyze remote work trends and policies in the industry. When asked what percentage of their workforce could effectively work from home, the industry average was 71 percent. When analyzing this question by firm type and condensing the groups to our three main areas, the expected gap between the percentage reported by architecture firms (76 percent) and engineering firms (72 percent) relative to construction firms (38 percent) is clearly displayed. Participate in a survey and save 50 percent on the final or pre- publication price of any Zweig Group research publication.

P rivate equity interest and activity in the AEC industry has been ramping up exponentially in the past several years, and it’s caught everyone’s attention. However, I think its presence still feels a bit alien to many people living in the AEC world. Running with that theme, I think it’s appropriate for every one of the AEC world’s inhabitants to ask three questions: who are these private equity extraterrestrials; what do they want; and how long will they be here? WHO ARE THEY? In the simplest terms, private equity is a form of private financing that is separate from the public markets. Private equity firms pool large amounts of capital from what are called limited partners, with the intention of investing it into promising ventures and distributing a healthy return back to its limited partners at a later date. These pools of money are called private equity “funds.” The most common holding period in a private equity fund is 10 years, though this can vary depending on the firm. A private equity firm’s limited partners are often, but not exclusively, pension funds, wealthy families or individuals, and companies with a lot of cash on-hand. Some of the most common types and strategies of funds are as follows: 1. Buyout funds. These take a controlling interest in an operating company or business, the platform company, and provide support (financial, strategic, or both) to the company’s management team to increase its value. The most common holding period for a platform company is five to seven years. 2. Venture capital funds. These funds specialize in making minority investments in fast-growing companies or startups. 3. Fund of funds. Some larger private equity firms will have funds that are dedicated to investing in other successful and well managed funds that need additional capital. WHAT DO THEYWANT? The short and honest answer is a return, though I don’t think that this must come with the negative connotations that some in the AEC industry put around it. Some have a predisposition that a private equity firms’ intentions are to buy a controlling interest in firms, strip the operations and staff to its bare bones to maximize their bottom line, and then sell off their withered and beaten remains at the end of the holding period. This really isn’t true in a people-focused service industry such as AEC. Private equity firms that are looking to enter our industry are focused on buying companies, but they invest in

Andy Chavez, CM&AA

See ANDY CHAVEZ, page 2

T H E V O I C E O F R E A S O N F O R T H E A E C I N D U S T R Y

ON THE MOVE STEFANY BARONE PROMOTED TO SENIOR VICE PRESIDENT AT WILSON & COMPANY Wilson & Company, Inc., Engineers & Architects has promoted chief marketing officer, Stefany Barone, to senior vice president. Barone brings more than 30 years of experience in marketing, business development and strategy to Wilson & Company. Her excellent leadership, interpersonal and organizational skills have helped her develop best practices for marketing and communications. As the chief marketing officer, she has led a multifaceted marketing team to build fundamental relationships among strategic planning, opportunities, company reputation, communications and project execution.

“Stefany has built a premier marketing organization at Wilson & Company, modeled after our culture of Higher Relationships. As senior vice president, she will continue to be instrumental in strategic growth planning and client engagement,” said Jim Brady, PE, Wilson & Company’s president and CEO. Under her leadership, the marketing and communications team has helped Wilson & Company grow by using creative strategizing and data analytics. Wilson & Company, Inc., Engineers & Architects, has brought more than 600 people together in 15 offices over nine states to build higher relationships through discipline, intensity, collaboration, shared ownership and solutions with our clients, partners and communities.

ANDY CHAVEZ, from page 1

management teams. Having said that, they do need the firm to maintain a healthy level of profitability so they can provide strong returns to their limited partners, otherwise the limited partners will choose to invest their money elsewhere when their investment period comes to an end. Private equity firms measure the success of their funds using metrics called a Multiple of Invested Capital and an Internal Rate of Return . The higher the firm’s MOIC and/or IRR, the less trouble they’ll have when requesting additional capital from new or existing limited partners to start their next fund. Circling back to the original point – in a service industry such as ours, private equity firms need the portfolio company’s staff to remain not only intact, but determined and happy as well. This is necessary so their quality of work may remain high, and they may continue to grow. Ultimately, private equity firms want to help their portfolio companies thrive and grow. HOW LONGWILL THEY BE HERE? Likely for a while, which may be a benefit to our industry and its stakeholders. Private equity firms are home to some of the savviest investing minds out there, and they are here for a reason. They see a massive potential for growth in the industry as the United States’ infrastructure has been deemed improvable, and our government has taken notice and recently passed the record- breaking infrastructure bill. On top of the opportunistic state of our industry, there are also moderately low barriers to entry in terms of price as firms in our industry trade for relatively low multiples compared to other industries’ firms. However, as discussed in my previous article, the increase in buyer demand in our space will likely cause the multiples to increase over time if the supply is unable to keep up. In the end, private equity interest in our space means that the outlook for our industry is strong, and multiples are likely to continue moving upward. The hope is that they stay for a while. Hopefully this deepened your understanding of why and how our newfound private equity allies are showing us interest lately. If you have any questions about anything mentioned in the article, please reach out. Andy Chavez, CM&AA is a senior analyst within Zweig Group’s advisory services group. Contact him at achavez@zweiggroup.com.

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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.

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THE ZWEIG LETTER APRIL 4, 2022, ISSUE 1435

O P I N I O N

Work-life balance 3.0

Mr. Miyagi was right: Balance is key. So, make sure both sides of your work-life scale are balanced.

I recently began watching a Netflix show called Cobra Kai , which is a sequel to The Karate Kid series from the 1980s. For those Karate Kid fans out there, you’ll definitely get a “kick” out of Cobra Kai . In case you don’t remember the original movie, Daniel LaRusso was a huge underdog but defeated Johnny Lawrence in a modern-day David versus Goliath battle at a karate tournament. Cobra Kai picks up the storyline 30 years later and portrays the lives of Daniel LaRusso and his arch nemesis Johnny Lawrence.

Henry Liang, P.E.

Daniel is now a successful businessman, is married to a beautiful wife, has two kids, and is loving life. Johnny can’t keep a steady job, is divorced, abandoned his son, and is struggling to make a living. In one of the Cobra Kai episodes, Daniel LaRusso is teaching his daughter a life-lesson and he quotes one of Mr. Miyagi’s sayings from the original movie. Mr. Miyagi said, “Better learn balance. Balance is key. Balance good, karate good. Everything good. Balance bad, better pack up, go home. Understand?” Mr. Miyagi’s quote about balance has resonated with me beyond just a funny flashback down memory lane. When I started my career in consulting engineering in the early 2000s, one of my mentors taught me that to succeed in our profession we need to work hard, win work, and then work hard. As a highly motivated assistant engineer right out of college with a ton of

energy, I took his advice literally by working tirelessly. My brain translated this advice to mean be the first one in the office, work through lunch, stay the latest, and work weekends so I could get as many tasks done as possible for as many people as possible. Did I worry about burning out? Not at all! I thought working hard was the only way to succeed in my career. Some of you may be thinking, what’s wrong with good, honest, hard work? The truth is … nothing at all. In fact, this attitude of succeeding by outworking everyone else is a mindset more people should be adopting. However, as my career progressed, I soon realized that what I defined as success as a consulting engineer did not fulfill my life at all. I found myself reflecting and asking myself questions like: “Why did I

See HENRY LIANG, page 4

THE ZWEIG LETTER APRIL 4, 2022, ISSUE 1435

TRANSACTIONS NV5 ACQUIRES RIVER CITY TESTING, STRENGTHENS MATERIALS TESTING AND INSPECTION SERVICES IN SOUTHERN CALIFORNIA NV5 Global, Inc., a provider of compliance, technology, engineering, and environmental consulting solutions, announced that it has acquired River City Testing, Inc., a provider of materials testing and special inspection services in Southern California’s Inland Empire

Region. The addition of RCT strengthens NV5’s testing, inspection, and consulting capabilities in the region and gives NV5 a materials testing laboratory to support NV5’s engineering operations in Riverside County and San Bernardino County. “The Inland Empire is one of the most populous regions in California with approximately 4 million residents, and NV5’s presence in the region

has expanded in recent years,” said Dickerson Wright, PE, chairman and CEO of NV5. “We are pleased to add River City Testing’s materials testing and inspection capabilities and its talented team of inspectors and technicians as we continue to grow our position in the Inland Empire and surrounding communities,” said Guillaume Gau, COO of Testing, Inspection, and Consulting at NV5.

■ ■ Support your local students. Supporting your local schools and universities is an extremely rewarding way to represent your profession. Reach out to professors and teachers and ask if you can guest speak in their classes. Participate in career fairs. Visit a student club meeting, bring some pizzas, and talk about your profession with them. They are always looking for real working professionals willing to spend some time with them. You can make a long-lasting impact on the students at an early phase of their academics, and maybe they’ll even remember you when you try to recruit them after they graduate. “Although I agree that work-life balance is important, I’ve learned that it’s much more than a balancing act between work and life. Work-life balance 3.0 means that balance must also be achieved between work-work and life-life.” ■ ■ Join and actively participate in professional societies, alumni associations, and industry organizations. Not only will you be giving back to your profession, you will also be expanding your professional network and likely improve your business development opportunities. Having an established, wide-spread professional network is important in any industry. Active, consistent, and long- term participation is critical for this indirect activity to be meaningful in your life. Professional networking is much more than just attending a meeting and getting a free lunch or liking and sharing a few posts on LinkedIn. You have to invest significant time and effort to make a lasting impact, usually over the course of several years. Life-life balance means that all areas of your personal life (family, spiritual, relationships, etc.) also need to be balanced. Your life-life balance is something I am not even going to attempt to pretend I can understand. Everyone’s life-life balance is going to look different and only you can decide what needs to go on each side of your life-life scale. They key is to remember that it’s much more than balancing work and your personal life. Each side of the scale also needs to be balanced. Balance good, everything good. Henry Liang, P.E., is a principal at MKN. Connect with him on LinkedIn.

HENRY LIANG, from page 3

miss the Sunday afternoon barbecue with my family so I could finish a report?” “Why did I work through lunch and miss that professional luncheon?” “Why am I eating at my desk reviewing company financial reports while my colleagues went to grab a pizza together?” I realized I was only working hard on one side of the scale, completely out of balance. We’ve all heard about work-life balance, and how it’s a big deal for employee satisfaction. Although I agree that work-life balance is important, I’ve learned that it’s much more than a balancing act between work and life. Work-life balance 3.0 means that balance must also be achieved between work- work and life-life. Work-work balance means that your direct work is balanced with your indirect work. Your direct work includes your day-to- day job functions. This is the type of work that would fall under your official job description and likely be completed during your normal work hours. Your indirect work includes the extra- curricular activities that support your professional success but are not requirements specified in your job description. You would likely complete indirect work outside of your normal work hours. Here are a few specific examples of how you can achieve work-work balance: ■ ■ Invest in your people. You likely work in a team environment, and you typically see your work associates even more than your own family. Develop a personal relationship with your colleagues. Get to know them and their families. One of the best business tips I ever learned is from Dave Ramsey’s book EntreLeadership . He has an entire chapter titled “People Matter Most” where he discusses that the people are the most valuable resource within a company and the best way to build unity and loyalty is to invest in them. Investing in people doesn’t mean paying them more money. It’s about taking time out of your busy day, getting to know them, and developing an authentic relationship with them. ■ ■ Never stop learning. Continuous education – like getting your MBA, obtaining a new certification, or completing continuous education courses – will grow your knowledge base and keep it current. Especially with the ability to access unlimited resources at our fingertips, there is really no excuse. Companies like RedVector provide very specific online trainings on just about any technical topic, and every industry has its version of online trainings.

THE ZWEIG LETTER APRIL 4, 2022, ISSUE 1435

P R O F I L E

Putting people first: Steve Margaroni CEO of Psomas (Los Angeles, CA), an employee-owned firm providing engineering, environmental, construction management, and survey/geospatial services.

By LIISA ANDREASSEN Correspondent

N early 25 years ago, Margaroni joined Psomas as an engineering intern, and then after several years in positions that ranged from corporate director of construction management to chief development officer, in 2020, he took the reins as CEO. He’s excited about the future of Psomas and is focused on growing the company to create exciting career paths and projects. “Now that I’m CEO, putting people first comes naturally,” Margaroni says. “Probably because Tim, [former CEO of Psomas] impactfully imparted that on me.” A CONVERSATIONWITH STEVE MARGARONI. The Zweig Letter: In a video on your website, you talk about growth being the most important item on your agenda. Tell me a little about some of the things you’re doing to precipitate growth? What areas are you most focused on? Why?

Steve Margaroni: Growth remains a top priority. One way we’re precipitating growth is through strategic acquisitions. Acquiring companies such as Seattle-based KPG enables Psomas to expand its footprint, add new capabilities and service offerings, and balance our strong, growing pipeline of projects. Our employee base is now more than 700 with offices across Arizona, California, Utah, and Washington. There will be more to come on this front. We’re also growing our service capabilities through state-of- the-art technology. Take our Survey and Geospatial group as an example. We’ve implemented groundbreaking technology that allows us to develop innovative models and maps, digital cities, and more with cutting-edge precision. The latest technology – think drones, lasers, 3D scanning, and more – allows us to acquire and transform complex project imagery, measurements, and data into real-life solutions. Professional growth for our employees is also of the utmost

THE ZWEIG LETTER AP

importance. As a 100 percent employee- owned firm, we all succeed when our employees succeed. We offer mentorship programs and professional development opportunities for all employees to build their careers and collaborate across the organization on meaningful projects. I know this firsthand. TZL: What do you enjoy most about your current position? Why? SM: Interacting with our Psomas team. I’ve been around the industry for longer than I’d like to admit, and I can confidently say that we have some of the brightest minds in engineering and construction. My goal is to help Psomas’ employees at all levels feel empowered to make decisions because they know firsthand what’s best for our clients and culture. I’m also blessed with an unmatched leadership team. When I was appointed CEO, Psomas also hired a new CFO and general counsel. Little did we know that a pandemic was right around the corner. From what I’ve seen, it often takes years for a leadership team to gel, but that wasn’t the case for us. We are a high functioning, effective, nimble, and cohesive team that’s built on respect and trust. Amid the pandemic, Psomas reached record- breaking results in 2020. “From what I’ve seen, it often takes years for a leadership team to gel, but that wasn’t the case for us. We are a high functioning, effective, nimble, and cohesive team that’s built on respect and trust.” TZL: Have you had a particular mentor who has guided you – in school, in your career, or in general? Who were they and how did they help? SM: I’ve had several, but one really stands out as being instrumental early on in my engineering career, and that’s Tim Psomas. Tim’s father was George Psomas, who started Psomas 75 years ago in 1946. When I was hired as an intern, Tim was the CEO. He was well-known and active in the industry and highly respected, nationally. I admired him. I will never forget the day that I was working in my cubicle and Tim popped his head in to say hello. He asked me a few questions, including what classes I was taking in school. He took a real personal interest in me, even though I was

an intern. A few months later, he popped his head in again. He knew my name and he also asked me how my calculus class was going. I was blown away that he even remembered me, let alone what class I was taking. It was obvious to me that he was a kind, caring person who put people first. Now that I’m CEO, putting people first comes naturally, probably because Tim impactfully imparted that on me. “Employees see Psomas as a place where they can build their careers – from a first job through retirement, and all stages in between.” TZL: Your company’s “Howwe work” section states that the “finishing details make all the difference.” Can you illustrate this point with a recent example? SM: Details matter. Whatever phase a project is in, whether it’s the permitting process or the final stages and approvals on a project. Because we are detail obsessed, our clients trust that we will do our best to get the job done right. The Wilshire Grand Center is one example of the importance of performing with the highest degree of accuracy and care. In 2013, the 60-year-old Wilshire Grand Hotel was demolished and replaced by the mixed- use Wilshire Grand Center. Completed in 2017, the $1 billion, three-and-a-half acre redevelopment is a world-class, 73-story skyscraper that houses the 900-room InterContinental Los Angeles Downtown Hotel, restaurants, and businesses. The Wilshire Grand now stands as the tallest building west of Chicago. Our survey and geospatial team performed construction surveying. Due to the complexity and scale of the project, every detail mattered. Psomas also provided land use entitlement services including a flexible development agreement, Transfer of Floor Area Rights, conditional use permits, and airspace subdivision. Approvals created the first Class “A” office building erected in downtown Los Angeles since the late 1980s. TZL: Who are you admiring right now in the AEC industry? Where do you see thought leadership and excellence? SM: I admire our employees and their

HEADQUARTERS: Los Angeles, CA NUMBER OF EMPLOYEES: 700+ YEAR FOUNDED: 1946 OFFICE LOCATIONS: 13 MARKETS: ■ ■ Transportation ■ ■ Water and wastewater ■ ■ Facilities ■ ■ Land development

■ ■ Energy ■ ■ Federal SERVICES: ■ ■ Construction management ■ ■ Engineering ■ ■ Surveying and

geospatial services

■ ■ Environmental consulting.

PSOMAS TODAY: In 2020, Psomas reached record- breaking revenue and continues to have a full project pipeline despite the effects of a global pandemic. Over the last year, Psomas priorities included building a flexible and safe remote work environment for all employees, supporting diversity and inclusion initiatives, while innovating and providing clients with the most sustainable and environmentally sound engineering solutions.

See PUTTING PEOPLE FIRST, page 8

PRIL 4, 2022, ISSUE 1435

PUTTING PEOPLE FIRST, from page 7

dedication to our clients. They are the heroes of our business. I’m a member of several local and national CEO and executive roundtables and admire many of those industry executives. Our collective thought leadership was a guiding force that helped me lead through the pandemic. Industry organizations such as ACEC, APWA, CMAA, and others are also beacons of the industry and we value being members. TZL: In just a fewwords, howwould you describe the “Psomas experience?” SM: As an employee, the “Psomas experience” is a reflection of our company culture, which is based on our core values: Respect, Collaboration, Recognition, and Service. We find that all employees, from interns to executive leaders, work hard and collaborate for a common purpose. Each team member brings unique ideas and contributions shaped by their own life story that strengthen the company. Each team also empowers, trusts, and develops every person. Psomas prioritizes the well-being of each employee and is committed to creating a welcoming, comfortable environment where employees feel valued and learn from each other. For our clients, the “Psomas experience” is based on trust. We build trust with our clients from the get go. Our clients know they can depend on us to get the job done from start to finish. We work tirelessly to ensure that what we’ve created, designed, and helped build stands the test of time – and that’s something we’ve lived by for our entire 75-year history. “Our culture fosters collaboration and teamwork at every level, and offers employees support, professional development opportunities with the ability to work on high-profile projects that make a real difference.” TZL: What type of leader do you consider yourself to be? SM: I aim to be a transformational leader who inspires others to grow, learn new skills, develop talents, be their best self, and contribute to the greater good. I want to ensure all employees are given the tools they need to feel successful. Investing in the personal and professional growth of our employees is at the heart of our culture. TZL: “Envisioning the bold” is part of your company culture. Can you give me an example of how this statement translates into something tangible? SM: “Envisioning the bold” guides our teams on every project to find innovative, creative solutions to challenges. We leverage expertise across our different groups, including engineering, construction management, environmental, and surveying and geospatial, to reimagine what’s possible and then deliver it. As an example, Psomas was selected by the city of Los Angeles Bureau of Engineering to work on the widening and rehabilitation of the North Spring Street Viaduct Widening and Rehabilitation project, a historic bridge spanning the Los

North Spring Street Viaduct Widening and Rehabilitation project, a historic bridge spanning the Los Angeles River between Long Beach and the San Fernando Valley.

Angeles River between Long Beach and the San Fernando Valley. Built in 1928, this bridge is treasured in the community and needed a dynamic upgrade that would preserve its character. Once again, we “envisioned the bold” and our Los Angeles engineering team earned the 2022 Engineering Excellence Honor Award from ACEC for their work on that project. TZL: What benefits does your firm offer that your people get most excited about? SM: Employees see Psomas as a place where they can build their careers – from a first job through retirement, and all stages in between. Our culture fosters collaboration and teamwork at every level, and offers employees support, professional development opportunities with the ability to work on high-profile projects that make a real difference. As a 100 percent employee-owned company we offer an employee stock ownership plan, internally referred to as Psomas Pshares. When you build a career with Psomas, you’ll see bigger long-term financial gains and a healthier nest egg. Statistics show employee-owners have more than two times the average total retirement balance of Americans nationally. While we embrace and support hybrid and remote roles, our flexible workplaces are also a big draw – they are designed with collaboration in mind and meant to inspire creativity and fun, while offering sufficient space for each person. Depending on the office, you’ll find open seating, dry erase walls for brainstorming, big screen TVs, fully-stocked kitchens with healthy snack options, ping pong tables, and even a bowling alley. The Zweig Letter: In one word or phrase, what do you describe as your number one job responsibility? SM: Maintaining a “people-first” culture.

THE ZWEIG LETTER APRIL 4, 2022, ISSUE 1435

O P I N I O N

Creating a DEI task force

Achieve greater business success and improve employee work satisfaction by actively working toward a more diverse, equitable, and inclusive company.

W e recently formed the D.H. Charles Engineering Diversity, Equity, and Inclusion Task Force. We didn’t have to do it; employees weren’t clamoring for it, nor were there any issues or events that forced our hand. At DHC, we continually strive to better our workplace environment, so, naturally, we wanted to form this group to improve as individuals and as a company and to make the DHC work experience even better for our employees. We want to bring awareness to the importance of DEI in the workplace and integrate best practices for fostering a diverse and inclusive workforce into our culture. We are an approximately 30-person structural engineering firm that provides construction engineering services.

Andrew Schwarz PE, SE, LEED AP

The benefits of diversity in companies are well documented. In general, a more diverse workplace brings different perspectives to the table, which invariably increases performance. Having a diverse workforce brings a variety of experiences and talents to the table that can lead to more creativity and better results. When employees identify better with others, their communication improves, leading to more productivity. They usually can then more easily consider varied viewpoints and grow more sophisticated ways of getting the job done. From a profitability standpoint, companies with a more diverse workforce achieve a 15 percent to 35 percent

performance advantage (above the national median), over those companies without, per a McKinsey study titled “Why Diversity Matters.” For us, forming the committee was only the first step. After our initial meeting, we did some brainstorming and research to decide what we think needs to be done. We surveyed the company workforce and presented a plan to the company ownership/ leadership, which was approved wholeheartedly. Our plan is divided into short-term and long-term goals across the following categories: Education

See ANDREW SCHWARZ, page 10

THE ZWEIG LETTER APRIL 4, 2022, ISSUE 1435

ON THE MOVE DR. SUJAN PUNYAMURTHULA JOINS STANTEC’S WATER PRACTICE TO GROW FOOTPRINT ACROSS NORTH AMERICA Sujan Punyamurthula, Ph.D., MBA, PE, has joined Stantec – a global engineering, architecture, and consulting firm – as a North American Water Growth Leader. A senior vice president in the firm’s Water practice, Punyamurthula will collaborate with team members across North America to identify and foster growth opportunities that span business lines. While his primary focus is the Water sector, he will work with the firm’s network of industry leaders to develop and build long-term strategies to position Stantec for growth across the U.S. and Canada in alignment with innovation and sustainability goals. Basedout ofSacramento, Punyamurthula has nearly three decades of experience building, growing, and managing large multidisciplinary programs. He is well known in the civil engineering industry as a thought leader who can integrate global expertise on emerging technologies to optimize the planning and implementation of infrastructure programs across the U.S. “We’re incredibly excited to welcome Sujan Punyamurthula to our growing North American Water team,” said John Take, Stantec’s chief business officer. “While his resume and reputation

speak for themselves, his forward- looking insights into the Water sector bring an invaluable perspective to our Stantec team, enabling us to better serve our clients across the U.S. and beyond.” Punyamurthula has worked on a wide range of complex civil infrastructure projects as project manager, program manager, technical lead, and principal in charge. He previously served in several leadership roles across the Western U.S. at one of the largest infrastructure firms in the world. Over the past decade, he focused on water infrastructure projects and developed and implemented annual strategic growth plans that resulted in consistent organic growth of more than 10 percent. Punyamurthula specializes in integrating digital technologies to drive innovation, improve operational efficiency, and sustain market leadership. On the project execution front, Punyamurthula has a strong reputation for closely collaborating with client leadership to execute projects fully aligned with owners’ expectations from inception through completion. Some of his recent success included projects with the U.S. Army Corps of Engineers, the San Francisco Public Utilities Commission, Valley Water, Sites Project Authority, the city of Stockton, Padre Dam, the MetropolitanWater District, and

King County. He recently conducted a P3 workshop with several state and federal agencies and actively supports clients in the transition to alternative project delivery models for mega projects. Punyamurthula has served on various joint venture boards to oversee and manage corporate risk on mega programs and design build projects. He has published technical papers and participated at conferences as a moderator and panel member to discuss emerging trends, challenges, and solutions in the water resources sector. In addition to a bachelor of science in civil engineering, he holds a master’s degree in geotechnical engineering and a master’s in business administration from the University of California, Berkeley, as well as a doctorate in geotechnical engineering from the University of Washington. Communities are fundamental. Whether around the corner or across the globe, they provide a foundation, a sense of place and of belonging. That’s why Stantec always designs with community in mind. Stantec is made up of designers, engineers, scientists, and project managers innovating together at the intersection of community, creativity, and client relationships. Balancing these priorities results in projects that advance the quality of life in communities across the globe.

about each other’s experiences is a good way to begin understanding each other’s perspectives – helping to bridge the gap between our differences. We will look to add these educational components to our everyday workflow through company meetings, regular emails, and monthly newsletters. There are many more action items that will take a significant amount of effort to accomplish, but we look forward to working hard to achieve our goals. We are looking forward to working with an outside diversity consultant to help us with these objectives. Some of our larger, long-term goals include overhauling our hiring to process to help with our diverse talent pipeline, encouraging employee resource groups, and reviewing compensation for gaps between employees. We are diverse in many ways, but still have challenges to work on. We aren’t only trying to shore up our weaknesses, but are working toward a more diverse, equitable, and inclusive company in order to achieve greater business success and improve employee work satisfaction. Andrew Schwarz, PE, SE, LEED AP, is a branch manager at D.H. Charles Engineering, Inc. Connect with him on LinkedIn.

ANDREW SCHWARZ, from page 9

& Awareness, Recruitment & Hiring, and Retention & Development. Within each of these groupings we have very specific action items with goals, costs, and timelines. We foresee dividing up these tasks between our committee members and engaged employees, and making a push to integrate the results into our company workflow. We intend to meet regularly as part of our work on the DEI Task Force. “We want to bring awareness to the importance of DEI in the workplace and integrate best practices for fostering a diverse and inclusive workforce into our culture.” Some immediate action items are to expand employee resources, such as libraries and employee resource groups, and to acknowledge significant holidays for various cultural, religious, and ethnic groups. Educating ourselves and learning

THE ZWEIG LETTER APRIL 4, 2022, ISSUE 1435

F R OM T H E F O U N D E R

Profitability tune-up

There is always something you can do to improve your bottom line, and now is the time to do it.

A ttention all of you who are AEC firm owners and managers! With the widespread inflation we are experiencing in this country, if you aren’t worried about declining profitability, you probably should be.

Everything is going up. And it’s not going up by 6 percent to 7 percent like it’s being reported. Some things are going up by 300 percent or more. So if it hasn’t hit you already, all of us are eventually going to face rising costs for labor, office space, software, insurance, and everything else. And these cost increases will unquestionably affect your profitability. If declining profits are one of your concerns, you might want to consider doing some of these things: 1. Raise prices. I could keep saying this until I am blue in the face. Those of you on percentage of construction cost contracts will get paid more just because everything is going up. But projects on a fixed fee or hourly billing rate should also go up in price. Now is the time if there ever was one to raise your rates by 10 percent or more. 2. Buy a building or buildings. It’s one way to control

your space costs and get some tax advantages. And while there is no doubt commercial real estate has gone up in value thanks to market acceptance of lower cap rates, it has not gone up as fast as rent. Could this be the time to go for it? Perhaps it is. 3. Shop your insurance. I’m no expert in insurance, but I do know this: When you have worked with the same brokers and insurance companies for a long time they tend to push their rates up. Sometimes new companies will buy your business for a year or two and give you a better deal than you are currently getting. Brokers can get lazy or may be tied to one company. Check out your options.

Mark Zweig

See MARK ZWEIG, page 12

THE ZWEIG LETTER APRIL 4, 2022, ISSUE 1435

TRANSACTIONS BOWMAN EXPANDS TEXAS OPERATIONS THROUGH ACQUISITION OF HOUSTON AND SAN ANTONIO BASED TERRA ASSOCIATES, INC. Bowman Consulting Group Ltd. announced it had entered into a definitive purchase agreement for the acquisition of Terra Associates, Inc. Headquartered in Houston, Texas, Terra delivers civil design and engineering solutions to clients focused on traffic and transportation planning, water-wastewater solutions, landscape and irrigation systems, office and industrial facilities, and multi-family development. Under the continuing leadership of Vickie Henkel, Terra’s staff of more than 30 professionals work from offices in Houston and San Antonio for both public and private sector clients. In connection with their water-wastewater practice, Terra serves in the role of district engineer for several Texas-based Municipal Utility Districts. “Terra is a company with a 40-year heritage of serving eastern Texas,” said Gary Bowman, CEO of Bowman. “The leadership of Terra has surrounded themselves with a team of committed and energetic professionals who will all be great additions to Bowman. We have been intent on growing our Texas operations and this acquisition, following closely on the heels of our acquisition of 1519 Surveying, fortifies Bowman’s presence in the Lone Star state. Terra’s experience in commercial site work,

transportation design, and utility district services are highly complementary to our portfolio of services and align with our growth plans and evolving market demand.” “Choosing to join Bowman was an easy decision,” saidVickieHenkel, CEOofTerra. “Bowman’s approach to growth is very exciting to all of us at Terra. We’ve gotten to know the leadership at Bowman over the course of the acquisition process and we all feel very comfortable with the decision. Their commitment to helping our leadership and staff grow without changing the core of who we are is a big part of what makes us excited about this opportunity. The opportunity to be a part of an entrepreneurial public company is both exciting and energizing.” The acquisition, which the company expects to be immediately accretive, was financed with a combination of cash, seller financing, and stock. The company expects the Terra acquisition to initially contribute approximately $5.5 million of annualized net service billing. “We are continuing to execute on our commitment to growth at a reasonable price,” said Bruce Labovitz, Bowman’s CFO. “This will be our last acquisition in 2021, and it brings our annualized acquired revenue for the year to approximately $36 million. The Terra acquisition is within our target multiple

range and it meets all of our objectives for operating performance metrics. As is our practice, we will provide more detailed information on M&A activities and pipeline in connection with scheduled quarterly communications.” Terra has provided civil engineering, surveying, economical design, project management and permitting services for multi-family, retail developments, office/ industrial projects, and municipalities for over fortyyears. During its award-winning history, the company has added traffic engineering, landscape architecture and irrigation design services. With multiple certifications including LEED, Texas HUB, and SBE, Terra’s team of more than 30 professionals work every day to exceed client expectations for reliability and innovation. Headquartered in Reston, Virginia, Bowman is an engineering services firm delivering innovative infrastructure solutions to customers who own, develop, and maintain the built environment. With 950 employees and more than 35 offices throughout the United Sates, Bowman provides a variety of planning, engineering, construction management, commissioning, environmental consulting, geomatics, survey, land procurement and other technical services to customers operating in a diverse set of regulated end markets.

7. Get more fuel efficient vehicles. Does everyone really need to commute in F-250s and 6.2 liter Denalis? Even though I love some of these fuel-guzzlers myself, smaller hybrid and electric-powered vehicles may be in order now. There is always something you can do to improve your bottom line. Now is the time to do it, if there ever was such a time! Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com. “If it hasn’t hit you already, all of us are eventually going to face rising costs for labor, office space, software, insurance, and everything else. And these cost increases will unquestionably affect your profitability.”

MARK ZWEIG, from page 11

4. Take a fresh look at individual staff utilization. Two things I want you to look at in particular: First is design and technical staff who are low utilization-wise when you have record high workloads. That tells you something. No one wants them on their jobs. And secondly, you need to take a hard look at overhead staff that got added when the company was making record profits. Some companies sure seemed to load up on all kinds of expensive non- billable staff at the highest levels in the last few years. 5. Change your bonus plan. Maybe you should take a fresh look at it to see if you need to more directly tie firm performance to individual bonuses. You want everyone to understand that bonuses come only from profits, and aren’t just part of their “deal” regardless of how the firm performs profit-wise. 6. Lower utilities usage. Get an energy audit. Figure out how you can reduce your utility costs. They are going up quickly, and not looking at this expense – even though it isn’t a huge percentage of revenue – could hurt your profitability.

THE ZWEIG LETTER APRIL 4, 2022, ISSUE 1435

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