Results of the “Tenth Annual Survey of Owners,” unveiled at this year's Construction Management Association of America (CMAA) National Conference held in October in Orlando, Fla., revealed some interesting trends for the construction industry going forward. Presented by FMI, management consultants and investment bankers to the construction industry headquartered in Raleigh, N.C., and McLean, Va.-based CMAA, the report examines the long-term trends affecting capital construction program management and focuses on how the construction delivery process, owner perspectives, and necessary skill sets will transform the A/E/C industry over the next 10 to 20 years.
“With drastic drop off in construction activity over the past year, we felt it was appropriate to explore how construction management and the outsourcing of construction activities are changing,” says Mark Bridgers, the FMI consultant who managed the study. “We learn [in the study] that the outsourcing of design and construction activities will be a trend that cannot be ignored going forward.”
This year's study portrays a construction owner community that is responding to changing economic conditions by looking to service providers for more comprehensive support across the entire building life cycle. During 2008 and 2009, the economic turmoil has resulted in a dramatic shift in the business environment for the A/E/C industry. This shift or “inflection point” represents a significant moment of change.
Several areas identified in the study demonstrated the greatest inflection, including outsourcing acceleration, perspective shifts, and the importance of a life-cycle cost or asset-management approach to capital construction. More specifically, the survey revealed a 60% increase in program activation outsourcing since 2006, a 30% increase in operations and maintenance (O&M) outsourcing since 2006, and an across-the-board increase in outsourcing of several other phases predicted between 2009 to 2014 (click here to see Figure). During this time frame, owners expect to attach significantly more importance to the following areas: selecting the most effective project delivery system, maintenance management support in both processes and technologies, proactive strategies to avoid claims and disputes, development and use of a construction management plan, and effective documentation and processes designed to support facility commissioning or turnover.
Dissecting the survey data according to demographics, results tended to be specific to certain business categories. For example, private/closely held organizations want a full range of services and more support, particularly in the pre-design or design phases and post-construction phases. State agencies expect to perform the front-end activities in-house. Publicly traded owners do not want tactical help, particularly in monitoring cost, addressing compliance, defining scope of work, and work conformance testing. Federal agencies are anticipating the need for more help with up-front pre-design or design services and construction oversight. Municipal agencies anticipate needing help with claims support and compliance monitoring activities. Small owners, with programs less than $100 million, place the greatest importance on services that occur before construction begins or post-construction.
In 2009, federal agencies show some of the most dramatic changes in an across-the-board increase in outsourcing. Overall program activation and O&M are both significantly up in outsourcing use in part due to the use by federal agencies.