Competition, tech spur consolidation of construction, design firms

Updated Dec 6, 2012

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As a result of the long recession and the ability to collaborate more closely thanks to growing adoption of new technologies, a trend has developed of architectural, engineering and construction firms consolidating into AEC firms.

The trend is discussed in detail in a new report by FMI and Philip Warner research consultant Steve Isaacs.

“…The construction industry is often chided for its slowness to adopt new ideas and become more productive,” Isaacs writes. “While some of that criticism may be deserved, more construction industry firms are realizing that their survival and future profitability depend on adapting to change and getting out in front of modern trends.”

According to the report, more clients are beginning to favor the design-build construction delivery methods over the traditional design-bid-build. Isaacs explains that “as the recession caused owners to reduce or eliminate their capital construction plans, industry competition increased rapidly.”

And because of the recession, one-stop shopping and lower prices have become a priority for more owners. Removing the bidding phase and opting to build with a consolidated firm saves time, but can also save money since the designers and builders are working together to ensure the owner is getting the best value.

In many cases it also saves headaches. Issacs writes that though the design-bid-build delivery method doesn’t always result in such scenarios, on many occasions they cause disagreements between the “owner and the contractor, and the contractor with the architect and engineer.”

Obviously, that requires a greater degree of collaboration, more possible than ever thanks to the growing use of building information modeling (BIM), smart building technologies, project tracking software, smartphones and tablets. And thanks to 4G LTE wireless data networks, team members can take advantage of a fast connection wherever they are.

“BIM technology, like the smartphone, is a perfect example of convergence or consilience with the capabilities to merge a wealth of information into one model, capturing materials, design, scheduling and record-keeping tasks all into an impressive 4D model of the final project,” Isaacs wrote.”