The Federal Transit Administration (FTA) recently required a local transit authority to return over $900,000 in federal grant funds that were used to pay an A/E firm for the design of a new facility.
The Lackawanna County (NY) Transit Authority must return the full federal grant applied to the hiring of an A/E firm to perform design services for a proposed intermodal transportation center.
The reason for this action? The local authority did not comply with applicable federal laws and regulations in the selection and contracting with this A/E. Failure to follow required Brooks Act procurement caused the design services to be not eligible for federal funding under the “common grant rule”, which forms one of the baseline grant rules applicable to recipients of federal funds.
Federal Grant rules, as specified by various laws and regulations make it very clear that if federal funds are used in the procurement of A/E services, federal law, including QBS (Brooks Act) and contracting and payments (FAR) must follow federal rules.
This action is long overdue, and hopefully will be the start of a trend that ends with all recipients of federal funds following the established best practices incorporated in federal procurement of A/E services.
Fair and open procurement, and fair contract terms for A/E firms have for many been often been a challenge at the state and local level.
Hopefully this “message” of the risks of not following fair contracting processes will spread to many other agencies with questionable contracting practices.
In this instance, FTA asked for the money back from the local transit authority, without any penalty or refund from the A/E.
Bill Fanning
Director of Research
Sunday, August 31, 2008
Thursday, August 28, 2008
HOK Sport Venue Event splits from parent
The managers of Kansas City-based HOK Sport Venue Event, the world's leading sports architecture firm, and the board of its St. Louis-based parent company, HOK Group Inc., have agreed to a transfer in ownership of HOK Sport Venue Event to the leaders of that practice, according to a Kansas City Business Journal article published Thursday.
Financial terms were not disclosed, according to the article, which said that HOK Group shareholders approved the transaction at a meeting on Thursday. Subject to final terms, the buyout is expected to be complete by the end of 2008.
The article states that the deal also calls for HOK Sport Venue Event, a wholly owned subsidiary of HOK Group since 2000, to launch a new corporate name and brand after becoming an independent company.
An employee-owned firm with 26 regional offices on four continents, HOK Group posted $631 million in revenue last year up 32 percent from $479 million in 2006, according to the article. HOK Sport reported $154 million in 2007 billings, up 22 percent from $126 million in 2006.
According to a press release announcing the split, the buyout will not affect clients or projects, and both practices will continue to collaborate on projects where their combined expertise will benefit the client and the project.
Ed
Financial terms were not disclosed, according to the article, which said that HOK Group shareholders approved the transaction at a meeting on Thursday. Subject to final terms, the buyout is expected to be complete by the end of 2008.
The article states that the deal also calls for HOK Sport Venue Event, a wholly owned subsidiary of HOK Group since 2000, to launch a new corporate name and brand after becoming an independent company.
An employee-owned firm with 26 regional offices on four continents, HOK Group posted $631 million in revenue last year up 32 percent from $479 million in 2006, according to the article. HOK Sport reported $154 million in 2007 billings, up 22 percent from $126 million in 2006.
According to a press release announcing the split, the buyout will not affect clients or projects, and both practices will continue to collaborate on projects where their combined expertise will benefit the client and the project.
Ed
Update: ENR to buy Building Design + Construction?
Last month, we wrote that McGraw-Hill (which publishes Engineering News-Record and Architectural Record, among many other publications) is interested in buying Reed Business Information (which publishes Building Design + Construction, among many other publications).
According to a Folio magazine article published earlier today, Reed Elsevier is said to have allowed first-round bidders for RBI to resubmit their bids last week. The re-submission, which was not officially the second round, was allowed because certain bidders "felt they were not provided with enough information" on RBI during the first round, according to a Reuters report.
The Folio magazine article said that it was not clear what that information was, nor which group resubmitted bids. A Reed Elsevier spokesperson could not be reached for comment. According to the Reuters report, the new bids came in "slightly lower" than the first round.
The Folio article quotes a New York investment banking firm partner as saying that allowing resubmitted bids is a bit "unusual."
At this point, McGraw-Hill remains in the game, but it will have to make its way through several heavy hitters to close the deal.
UBS, the bank that's organizing the RBI sale, has invited more than 10 groups, including McGraw-Hill and private equity firm Bain Capital, to submit second round offers, according to the Folio article.
Reed Elsevier expects to divest itself of RBI in the second half of 2008, according to the article. The value of the first round bids was said to have ranged between $1.87 billion and $2.33 billion.
Ed
According to a Folio magazine article published earlier today, Reed Elsevier is said to have allowed first-round bidders for RBI to resubmit their bids last week. The re-submission, which was not officially the second round, was allowed because certain bidders "felt they were not provided with enough information" on RBI during the first round, according to a Reuters report.
The Folio magazine article said that it was not clear what that information was, nor which group resubmitted bids. A Reed Elsevier spokesperson could not be reached for comment. According to the Reuters report, the new bids came in "slightly lower" than the first round.
The Folio article quotes a New York investment banking firm partner as saying that allowing resubmitted bids is a bit "unusual."
At this point, McGraw-Hill remains in the game, but it will have to make its way through several heavy hitters to close the deal.
UBS, the bank that's organizing the RBI sale, has invited more than 10 groups, including McGraw-Hill and private equity firm Bain Capital, to submit second round offers, according to the Folio article.
Reed Elsevier expects to divest itself of RBI in the second half of 2008, according to the article. The value of the first round bids was said to have ranged between $1.87 billion and $2.33 billion.
Ed
Roll with the changes
When times are tough, such as they are right now for some of you in the AEC industry, there's a mentality that often creeps up among firm leaders that "we need to get back to doing what got us here."
Sounds like a good idea on the surface, but you have to keep up with the times. What got you from a $1 million firm to a $10 million firm will not get you from $10 million to $100 million. Doesn't work that way. Sure, there are some basic principles that work no matter what size your firm or how long you've been in business (pay bills when they come in, get invoices out when the work is done, never stop marketing), but things change and you have to change with them or you will be left behind.
Take, for instance, the concept of marketing.
For the purposes of this discussion, let's assume you are a 55-year-old male CEO of a 200-person architecture firm. Now, if you want to market your clients the way your firm marketed itself when you were named CEO at 45, I've got a big bucket of cold water waiting to hit you in the face with a reality check. You can't do it.
Marketing is marketing, though, right? You are promoting your firm, building your brand, and developing relationships (which sort of blends into business development, but let's leave that aside for now), so why wouldn't the same marketing approach that you used 10 years ago work today?
Where do I start?
Fax machines are basically irrelevant at this point for marketing. Studies have shown that less than 5% of firms actively use fax machines for marketing efforts these days.
Even the seeming holy grail of e-mail (distributed immediately, costs virtually nothing) has been handicapped through overuse and hyperactive spam filtering. To make e-mail marketing work these days, it has to be part of an arsenal of marketing tools, not the only one.
There's still face-to-face marketing, which will always work, but the increasing demands on our time (not to mention the ramped-up pressure to validate your existence by bringing in more work through more proposal submittals and the growing trend of using the marketing department to help the HR department recruit employees) make it harder to get in front of clients. Plus, that's sort of a business development function.
Of course, technology has helped us all get more done in less time, but that's the fundamental reason why doing what worked for you and your firm in the past does not work today. The generational gap between you and your audience is greater than ever if you are over the age of 50.
Do the words BlackBerry, iPhone, LinkedIn and Facebook mean anything to you? That's how people are communicating these days, and effective marketers are adopting these tools and using them to their advantage. Everyone knows what a BlackBerry can do, and iPhones offer that functionality and the personal conveniences we've all come to enjoy in an iPod.
But what about LinkedIn and Facebook? Are you familiar with these tools?
Facebook has essentially replaced MySpace as the social networking site of choice for people under the age of 40. And people are communicating there both day and night. They might be doing it right now in your office, unless you have an aggressive spam filter that blocks it.
LinkedIn, however, has become pretty much the business networking site of choice in the United States today. You can do everything from download someone's contact information to your PDA (click the "download vCard" button on the bottom of the page) to post questions about issues affecting you and your business.
Trust me, people are doing this. My brother-in-law, who works in public relations, posts questions a few times a week and I just got off the phone this morning with an associate principal of marketing and business development at a Florida engineering firm who posts questions to help her with her new role in the human resources department.
You can also update colleagues on what you are working on, post your resume (great for job-hunters and employers alike), and extend your network by finding out who your contacts have added as contacts. You can also join groups of professionals with similar interests (i.e., who attended the same college or are members of the same trade association).
Anyway, the point of all this is there are constantly evolving means of communication and what was popular 10-15 years ago is not relevant anymore, so to think you can run your business the same way today that you did in the mid 1990s is similarly irrelevant.
I'd love to hear your thoughts. Drop me a line or give me a call.
Ed
Sounds like a good idea on the surface, but you have to keep up with the times. What got you from a $1 million firm to a $10 million firm will not get you from $10 million to $100 million. Doesn't work that way. Sure, there are some basic principles that work no matter what size your firm or how long you've been in business (pay bills when they come in, get invoices out when the work is done, never stop marketing), but things change and you have to change with them or you will be left behind.
Take, for instance, the concept of marketing.
For the purposes of this discussion, let's assume you are a 55-year-old male CEO of a 200-person architecture firm. Now, if you want to market your clients the way your firm marketed itself when you were named CEO at 45, I've got a big bucket of cold water waiting to hit you in the face with a reality check. You can't do it.
Marketing is marketing, though, right? You are promoting your firm, building your brand, and developing relationships (which sort of blends into business development, but let's leave that aside for now), so why wouldn't the same marketing approach that you used 10 years ago work today?
Where do I start?
Fax machines are basically irrelevant at this point for marketing. Studies have shown that less than 5% of firms actively use fax machines for marketing efforts these days.
Even the seeming holy grail of e-mail (distributed immediately, costs virtually nothing) has been handicapped through overuse and hyperactive spam filtering. To make e-mail marketing work these days, it has to be part of an arsenal of marketing tools, not the only one.
There's still face-to-face marketing, which will always work, but the increasing demands on our time (not to mention the ramped-up pressure to validate your existence by bringing in more work through more proposal submittals and the growing trend of using the marketing department to help the HR department recruit employees) make it harder to get in front of clients. Plus, that's sort of a business development function.
Of course, technology has helped us all get more done in less time, but that's the fundamental reason why doing what worked for you and your firm in the past does not work today. The generational gap between you and your audience is greater than ever if you are over the age of 50.
Do the words BlackBerry, iPhone, LinkedIn and Facebook mean anything to you? That's how people are communicating these days, and effective marketers are adopting these tools and using them to their advantage. Everyone knows what a BlackBerry can do, and iPhones offer that functionality and the personal conveniences we've all come to enjoy in an iPod.
But what about LinkedIn and Facebook? Are you familiar with these tools?
Facebook has essentially replaced MySpace as the social networking site of choice for people under the age of 40. And people are communicating there both day and night. They might be doing it right now in your office, unless you have an aggressive spam filter that blocks it.
LinkedIn, however, has become pretty much the business networking site of choice in the United States today. You can do everything from download someone's contact information to your PDA (click the "download vCard" button on the bottom of the page) to post questions about issues affecting you and your business.
Trust me, people are doing this. My brother-in-law, who works in public relations, posts questions a few times a week and I just got off the phone this morning with an associate principal of marketing and business development at a Florida engineering firm who posts questions to help her with her new role in the human resources department.
You can also update colleagues on what you are working on, post your resume (great for job-hunters and employers alike), and extend your network by finding out who your contacts have added as contacts. You can also join groups of professionals with similar interests (i.e., who attended the same college or are members of the same trade association).
Anyway, the point of all this is there are constantly evolving means of communication and what was popular 10-15 years ago is not relevant anymore, so to think you can run your business the same way today that you did in the mid 1990s is similarly irrelevant.
I'd love to hear your thoughts. Drop me a line or give me a call.
Ed
Wednesday, August 27, 2008
Las Vegas architectural firm shutters its doors
The realities of the economic marketplace are causing Las Vegas, Nevada-based Trevi Architectural to close on Friday, according to an article in the Las Vegas Review-Journal.
The firm has provided custom fountains, statuary, sculptures, columns and moldings to resorts including Wynn Las Vegas, Wynn Macau, The Venetian, and Caesars Palace, but company founder Scott Acton told the newspaper that a combination of factors led the to the business' closing, including a series of unpaid bills and a decision by the company's new owners not to put any more cash into the business.
Most of the company's 147 workers were fired Monday, Acton told the newspaper. He would not say how much work is outstanding, but the article said he is trying to get orders moved to other companies. "I don't want to see any one of my customers get hurt," said Acton, who was named Nevada small businessperson of the year by the Small Business Administration in 2005.
Private equity firm Ampersand Ventures bought Trevi Manufacturing on Sept. 17, 2007, changing the name to Trevi Architectural, according to the article. According to Acton, Ampersand decided recently not to put more money into the business.
The company did double its sale volume after the transaction, but when a few vendors refused to pay outstanding bills, Trevi got into a "sticky situation," as Acton described it to the newspaper. A pair of lawsuits have been filed since May by the firm in Clark County District Court claiming unpaid bills totaling nearly $108,000.
When the newspaper called Ampersand's office in Wellesley, Massachusetts, the story claims an employee said, "We don't talk to the press."
According to the article, Ampersand was founded in 1988 as a spinoff of PaineWebber.
Acton's work is part of the Las Vegas backdrop. His work includes the three-tiered fountain in front of The Venetian, the pirate ships at Treasure Island, and the cove moldings behind light fixtures at Caesars Palace, according to the article.
Acton told the newspaper he is not sure what he will do next, but said he is thinking of restarting the business.
Ed
The firm has provided custom fountains, statuary, sculptures, columns and moldings to resorts including Wynn Las Vegas, Wynn Macau, The Venetian, and Caesars Palace, but company founder Scott Acton told the newspaper that a combination of factors led the to the business' closing, including a series of unpaid bills and a decision by the company's new owners not to put any more cash into the business.
Most of the company's 147 workers were fired Monday, Acton told the newspaper. He would not say how much work is outstanding, but the article said he is trying to get orders moved to other companies. "I don't want to see any one of my customers get hurt," said Acton, who was named Nevada small businessperson of the year by the Small Business Administration in 2005.
Private equity firm Ampersand Ventures bought Trevi Manufacturing on Sept. 17, 2007, changing the name to Trevi Architectural, according to the article. According to Acton, Ampersand decided recently not to put more money into the business.
The company did double its sale volume after the transaction, but when a few vendors refused to pay outstanding bills, Trevi got into a "sticky situation," as Acton described it to the newspaper. A pair of lawsuits have been filed since May by the firm in Clark County District Court claiming unpaid bills totaling nearly $108,000.
When the newspaper called Ampersand's office in Wellesley, Massachusetts, the story claims an employee said, "We don't talk to the press."
According to the article, Ampersand was founded in 1988 as a spinoff of PaineWebber.
Acton's work is part of the Las Vegas backdrop. His work includes the three-tiered fountain in front of The Venetian, the pirate ships at Treasure Island, and the cove moldings behind light fixtures at Caesars Palace, according to the article.
Acton told the newspaper he is not sure what he will do next, but said he is thinking of restarting the business.
Ed
Convention bad for business?
Interesting article in today's Denver Post about how this week's Democratic National Convention is negatively impacting businesses near the Pepsi Center that is host to the event.
Many businesses have either shut down or significantly scaled back operations this week. Among them is Staller & Henry Inc., a landscape architecture firm. "Our phones are ringing about 10 percent of what they normally do," said Adam Anderson, who works for the firm.
Another firm having problems is eBlueprint, which prints and manages reprographics for architecture firms and is located within the blockaded perimeter surrounding the Pepsi Center. According to the article, company drivers and couriers are having trouble getting in and out to make blueprint deliveries. A second eBlueprint office in Aurora has not been affected, which is keeping the company afloat this week. "If it wasn't for our other store, we would have nothing," said an employee.
Interesting to see the downside of what appears on television to be a celebration of Barack Obama's nomination as the Democratic candidate for president.
Ed
Many businesses have either shut down or significantly scaled back operations this week. Among them is Staller & Henry Inc., a landscape architecture firm. "Our phones are ringing about 10 percent of what they normally do," said Adam Anderson, who works for the firm.
Another firm having problems is eBlueprint, which prints and manages reprographics for architecture firms and is located within the blockaded perimeter surrounding the Pepsi Center. According to the article, company drivers and couriers are having trouble getting in and out to make blueprint deliveries. A second eBlueprint office in Aurora has not been affected, which is keeping the company afloat this week. "If it wasn't for our other store, we would have nothing," said an employee.
Interesting to see the downside of what appears on television to be a celebration of Barack Obama's nomination as the Democratic candidate for president.
Ed
Tuesday, August 26, 2008
Serial acquirers keep on acquiring
In case you missed it, URS Corp. and Jacobs Engineering Group Inc. announced three acquisitions in the past week.
Two firms, three acquisitions?
Yes, you read that correctly as URS, the 50,000-person engineering, construction, and technical services firm based in San Francisco, bought LopezGarcia Group Inc., a 250-person infrastructure firm based in Dallas, Texas., and acquired most of the assets of Tryck Nyman Hayes Inc., a 60-person engineering, landscape architecture, and surveying firm based in Anchorage, Alaska.
Meanwhile, Jacobs Engineering Group announced earlier today that it has acquired a maintenance, construction, and service works contractor in England that will significantly increase its presence in Europe. The Pasadena, California-based Jacobs bought L.E.S. Engineering Limited, a Grimsby, United Kingdom company that specializes in mechanical, instrumentation, and electrical installations in the utilities industry.
According to a press release announcing the LopezGarcia deal, Gary Jandegian, president of the URS division of URS, said that the state of Texas issues a lot of government bonds— $11.1 billion worth in the first quarter of this year— which are used to pay for the type of infrastructure projects LopezGarcia works on.
Wendy Lopez, the co-founder and CEO of LopezGarcia, one of Dallas' most recognizable engineering firms, will remain with the firm as leader of its Texas initiative with a title of vice president, according to the Dallas Business Journal. LopezGarcia and URS would not disclose financial terms, but Lopez is quoted in the article as saying it was an all-cash deal. She also said that URS approached the firm about a possible merger about a year ago.
For those of you who have never had the pleasure of meeting Wendy Lopez, let me say that she is one of the most dynamic and opinionated people I have ever met. Among A/E firm leaders, she would be at or near the top of any list of people who pull no punches when you talk with them. A straight shooter in the truest sense of that phrase, I have always enjoyed talking to Lopez. While the acquisition is good news for her, it's a sad day for the industry when someone who grew her firm from a one-person operation 20 years ago to the firm it is today is no longer in charge.
MWH and Hatch Mott MacDonald also announced acquisitions in the past week as well; MWH acquiring a hydrogeological consulting firm based in Lima, Peru and Hatch Mott MacDonald acquiring a small transportation planning firm in California.
While you may have read elsewhere that the M&A trend is slowing, that's not entirely true. What is happening is that strategic buyers are taking more time vetting potential deals and are less reluctant to walk away from the table at any point in the process. So you may be hearing about less deals, but the deals that are announced now have a better chance of sticking.
Ed
Two firms, three acquisitions?
Yes, you read that correctly as URS, the 50,000-person engineering, construction, and technical services firm based in San Francisco, bought LopezGarcia Group Inc., a 250-person infrastructure firm based in Dallas, Texas., and acquired most of the assets of Tryck Nyman Hayes Inc., a 60-person engineering, landscape architecture, and surveying firm based in Anchorage, Alaska.
Meanwhile, Jacobs Engineering Group announced earlier today that it has acquired a maintenance, construction, and service works contractor in England that will significantly increase its presence in Europe. The Pasadena, California-based Jacobs bought L.E.S. Engineering Limited, a Grimsby, United Kingdom company that specializes in mechanical, instrumentation, and electrical installations in the utilities industry.
According to a press release announcing the LopezGarcia deal, Gary Jandegian, president of the URS division of URS, said that the state of Texas issues a lot of government bonds— $11.1 billion worth in the first quarter of this year— which are used to pay for the type of infrastructure projects LopezGarcia works on.
Wendy Lopez, the co-founder and CEO of LopezGarcia, one of Dallas' most recognizable engineering firms, will remain with the firm as leader of its Texas initiative with a title of vice president, according to the Dallas Business Journal. LopezGarcia and URS would not disclose financial terms, but Lopez is quoted in the article as saying it was an all-cash deal. She also said that URS approached the firm about a possible merger about a year ago.
For those of you who have never had the pleasure of meeting Wendy Lopez, let me say that she is one of the most dynamic and opinionated people I have ever met. Among A/E firm leaders, she would be at or near the top of any list of people who pull no punches when you talk with them. A straight shooter in the truest sense of that phrase, I have always enjoyed talking to Lopez. While the acquisition is good news for her, it's a sad day for the industry when someone who grew her firm from a one-person operation 20 years ago to the firm it is today is no longer in charge.
MWH and Hatch Mott MacDonald also announced acquisitions in the past week as well; MWH acquiring a hydrogeological consulting firm based in Lima, Peru and Hatch Mott MacDonald acquiring a small transportation planning firm in California.
While you may have read elsewhere that the M&A trend is slowing, that's not entirely true. What is happening is that strategic buyers are taking more time vetting potential deals and are less reluctant to walk away from the table at any point in the process. So you may be hearing about less deals, but the deals that are announced now have a better chance of sticking.
Ed
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