Not so “alternative” anymore is one way to describe the rise of alternative project delivery. Revenue for construction management-at-risk and design-build delivery reached all-time highs before COVID-19 plagued the market. But this year’s company rankings tell a more complicated story about alternative project delivery during a crisis.

Over the last 10 years, before the pandemic, alternative project delivery firms reaped the rewards of a rapidly expanding construction market—cementing the boom that many firms reported in their ENR Top List surveys. Total revenue for construction management-at-risk (CMAR) projects peaked in 2019 at $151.92 billion before the virus took hold last year and brought it down slightly to $148.3 billion.

Total design-build revenue rose to a crescendo in 2018 at $107.65 billion and was also on track to peak in 2019. But Fluor Corp., ranked at No. 2 in 2018 at $10.96 billion, did not participate in last year’s survey due to internal financial audits. As a result, the design-build revenue total took a dip in 2019 to $96.78 billion and only slightly rebounded in this year’s list to $97.77 billion, which included the return of Fluor’s revenue figures.

相关链接 ENR Top 100 Design-Build Firms 2021 ENR Top 100 Construction Management-at-Risk Firms 2021

Collectively, the 2021 Top 100 alternative project delivery firm rankings reflect the mindset of many owners during the early stages of the pandemic. Many scaled down and pivoted to traditional design-bid-build approaches on smaller, turnkey projects because that was what many contractors know best, firms have reported. A few firms that fell off the list this year also reported taking more design-bid-build work when alternative project delivery projects slowed down.

Adapting to market conditions and the needs of clients kept many firms’ revenues strong while they navigated changes brought on by the pandemic.

Pandemic Pivot

The pivot by some firms to design-bid-build had an immediate impact on their alternative project delivery revenue, in some cases dropping them off the Top 100 Design-Build and CMAR lists. As a result, there are more than 15 newly ranked firms on each list.

With Fluor back in the fold for 2021, Top 100 Design-Build list revenue grew just under 1%. But losing McDermott International—since it did not participate after entering and exiting bankruptcy protection in 2020—removed a reported $8.4 billion in revenue from the total. Kiewit increased design-build revenue by more than $2 billion to reach the No. 1 spot for the first time after consistently ranking in the top five for years. Meanwhile, Bechtel dropped nearly $3 billion in revenue to No. 2, most likely the result of a shrinking cost structurepreviously reportedby ENR.

Overall, median design-build firm revenue rose to $499 million from $494.85 million on last year’s list, up 0.8%. When it comes to overall general contracting revenue, design-build has shrunk to 24.4% last year, from 29.1% in 2016, according to ENR data.

Based on reported revenue on the Top 100 CMAR delivery list, the total shrank 2.4%, mostly on the domestic side. But international revenue trends clearly show a more gradual decline. CMAR continues to hold a large overall share of general contracting revenue, from 34.3% in 2016 (among all firms who sent in surveys) to 41.6% this year, still down from its peak of 43% in 2019.

The median firm revenue for CMAR was $776.3 million, a 10.8% drop from last year’s $870.1 million figure. Of the 41 survey respondents that listed 100% of general contracting revenue from CMAR (including firms ranked below the Top 100 threshold), 36.6% said their backlog was higher than last year, 29.3% said it was lower and 29.3% reported no change. Those backlog percentages for all firms on the Top 400 Contractors list were 43.7%, 38.2% and 18.1%, respectively.

在书面调查的回应中，公司报告说，业主正在寻找在COVID-19危机不可预测性下恢复市场苦难的确定性的方法。Burns＆McDonnell的建筑/设计建设集团高级副总裁Matt Ralston说，早期成本和计划确定性最终是许多客户想要的。

“There is no secret that the industry is experiencing pockets of significant material price escalation and supply chain disruptions, including increased lead times and freight costs as well as unpredictability of imported equipment and materials,” he says. “A big challenge for us this year will be mitigating those risks and supply chain constraints.”

替代见解

甚至在前几年alterna的主要增长tive project delivery, the construction industry was still in the throes of another dilemma caused by workforce shortages. Contractor backlogs brimmed while labor scarcity pressurized the bid-build process, many contractors reported. Under these heightened conditions, owners become more open to innovation in the form of alternative project delivery systems, explains Mounir El Asmar, associate professor in the School of Sustainable Engineering & the Built Environment at Arizona State University’s Del E. Webb School of Construction. After an initial contraction, crisis-level market conditions caused by the pandemic might again push owners toward innovation to lift shelved projects into production, he says. But firms will need to prove to owners that alternative project delivery works in a crisis.

替代项目交付比传统设计竞标构建的一个明显优势是，通常不需要完成项目设计即可开始构建。El Asmar说，“设计阶段与某些施工阶段的重叠”是CMAR，设计建造，集成项目交付以及许多其他替代交付方法的关键组成部分。他说：“另一个非常关键的是承包商可以在设计上提供意见。”“他们可以执行可施加性分析，并估算设计决策的成本和计划影响，以导致最终产品更接近所有者对预算的打算，以告知设计。”

The up-and-down revenue of Top 100 firms isn’t surprising, says El Asmar. It reflects the natural ebbs and flows of owners investing in alternative project delivery.

In one research study measuring the scope of the approaches, ASU found that CMAR and design-build projects tend to be of larger size and complexity, since the amount of up-front investment requires the owner to hire the alternative delivery team early on.

Owners “are going to compensate them … for that time, effort and insight into the design that the contractor is bringing on,” says El Asmar. “That’s generally the case on complex projects with room for innovation. You want contractors to join the party early and develop solutions with you.” For some firms, he explains, 10 alternative delivery projects could account for as much as 50% of revenue while about 50 design-bid-build projects could account for the other 50%.

此外,alternative project delivery is often the faster method because contractors help navigate market conditions early on. “There are good studies out there that show that design-build and CMAR can be twice as fast as your traditional design-bid-build,” says El Asmar. “Because contractors are grounded in the reality that labor is scarce, and steel and other construction material costs are through the roof, they have a good pulse on prices in the construction market.”

然后，他们可以利用该见解来确保该项目考虑所有者的预算。埃尔·阿斯马尔（El Asmar）指出：“他们可以将其与设计师考虑在内，以便将其设计为所有者的预算。”

As an integrated engineering, procurement and construction provider, Burns & McDonnell says it has the ability to drive construction jobsite conditions during design, minimizing labor risks and increasing predictability for stakeholders, which has helped it solve labor and workflow issues during the pandemic.

“当工艺可用性有限时，战略使用场外预制和模块化有效地推动了人事需求的高峰，消除了贸易堆叠并最大程度地减少了整体实地建设时间，所有这些时间都提高了安全性，质量和生产力，”伯恩斯说。& McDonnell’s Ralston. “Having the flexibility to self-perform construction, both in open shop and union spaces using our wholly owned subsidiaries Ref-Chem and AZCO, respectively, provides further direct control over the skilled labor and eliminates insolvency risks that exist in the construction sector.” This helped the firm expand its capacity in power generation, oil, gas, chemicals, electrical transmission and distribution markets, as well as in process and manufacturing.

公司further report reorganizing their portfolios to better meet developing business markets. For example, Black & Veatch is preparing for an ongoing energy transition that it calls “repowering” the power industry.

Black＆Veatch的Power Business总裁Mario Azar解释说：“我们已经使整个电力业务重新建立了更广泛的能源。”“我们引入了更多的关注较小的电力传输和分销解决方案，我们积极参与氢作为发电的清洁燃料替代品。”

Infrastructure in Flux

With a trillion-dollar proposed infrastructure spending bill launched by the White House in the form of the American Jobs Plan, alternative project delivery could be poised to take a major piece of the post-pandemic contracting market share.

Public agencies need legislative authority to engage in design-build delivery, and currently 45 states, plus the District of Columbia, either widely or fully permit design-build delivery (see chart, p. 46), says Lisa Washington, CEO of the Design-Build Institute of America.

“We saw a lot of legislative activity during COVID, and it’s been that way for many years in a row,” she says. “What this means is that design-build is a tool in the toolbox for public agencies across the country.” Washington notes that “as an organization, we believe that having the option to consider design-build as a project delivery method is important, but it may not be right for every project.” A lot depends on project goals and what the owner wants to achieve, she adds.

Overall, firms should prepare to meet their backlog of work. “Our member firms have, pretty unanimously, indicated that they are very busy, and we do believe that there is going to be a backlog of projects that need to be completed post-pandemic,” says Washington, predicting contractors will be busier than designers because many projects that broke ground only to be shelved last year have restarted.

“We truly believe that, very similar to the American Recovery and Reinvestment Act, these [infrastructure] projects are going to come with some stipulations about getting them off the ground quickly,” Washington adds, “and we think design-build is going to play a major role in that.”