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By Erica Konieczny
April 10, 2016
Being an architect or engineer at a smaller firm comes with its fair share of pros and cons. The agility and freedom that accompanies a small and independent company can sometimes be overshadowed by the financial limitations that plague smaller organizations. Various factors in the marketplace are making it trickier than ever for smaller firms that are highly focused to compete with larger organizations––but that doesn't mean small organizations are doomed. In fact, smaller groups that correctly adapt to the changing marketplace have the chance to pick up more business thanks to a resurgent economy.
Construction spending grew nearly 14 percent from August 2014 to August 2015, according to the Census Bureau, and the trend toward increased spending shows no signs of slowing down. This is a welcome change after years of sluggish spending brought on by the financial crisis. To take advantage of these gains, you need to keep abreast of the trends that will impact the construction industry during the next several years. Below are a few factors to keep in mind:
Design-build projects, where the same company controls the engineering, architectural, and construction elements of a contract are becoming more popular. This may be seen as a threat to smaller firms because they often lack the broad resources necessary to commit to design-build projects. In fact, most smaller firms can compete in the design-build space by partnering with larger organizations.
Successfully competing in this space while remaining independent will require tight communication and careful project selection. That effort will pay off, however, as the Design-Build Institute of America notes, this approach cuts costs throughout the entire project lifecycle. Sometimes, partnership with a larger entity may not be an option, and to survive, smaller organizations may need to merge with other firms that fill in gaps in their skill set. The trend toward mergers is hugely important, and represents a confluence of several different forces in the market.
The Small Business Administration attempts to award more than 20 percent of contracts to small businesses each year, according to the Washington Post. In the past few years, the definition of what constitutes a small business has grown so broad that many larger entities qualify. This means small organizations have a very difficult time competing in the current market for government contract work. As a result, more groups and firms are considering a merger to expand their offerings and improve their ability to compete with larger organizations. According to a survey from the Zweig Group, the majority of firms are currently considering a merger. Firms that are unwilling to consolidate may be left behind in the near future.
Technology is affecting the construction industry in a variety of ways. Engineers and architects need to adjust the way they design buildings based on new construction materials that can boost efficiency and durability. The move toward new materials is both a response to the growing development of prefabricated building parts, and a nod toward new regulations according to the American Society of Mechanical Engineers. Prefab building elements are rapidly changing the amount of engineering effort required to work on many projects. These pieces can dramatically decrease costs for a project owner, but they impose new limitations and requirements on engineers and architects who have to work with existing materials.
The development of new energy-efficient materials and building techniques is equally meaningful throughout the industry. Owners are interested in energy efficiency because it provides potential tax breaks from state, local, and federal governments and can substantially cut the cost of long-term ownership. Smaller firms must gain familiarity with new materials and building techniques to remain relevant and to enhance operational efficiency.
The more integrated relationships between architects, engineers, and construction workers extends to every operation, not just design-build projects. As a result, architects and engineers will need to work alongside the construction team long after they finish the majority of design work on a project. That continued communication will involve transferring countless documents as new issues arise and fixes are created.
A cloud-based communication platform that tracks needed changes and coordinates proposed solutions allows everyone to work on a project regardless of location. A system like Procore provides a centralized place for all of a project's important data and makes it simple to track progress from start to finish.
Increased collaboration throughout the construction industry may be a positive force overall, but it can also lead to more liability for all the parties involved. With Procore, every piece of communication is stored in one place, which makes it easy to combat potential litigation.
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