Is Your Civil Engineering Firm Getting Squeezed?
Last week I decided to reach out to a client that I had not spoken to in a few months. They are a very respectable mid-sized consulting civil engineering firm with a couple hundred employees spread over 7 or 8 offices. I had successfully completed a search earlier this year for them, but I knew they were having some cash flow problems based upon the current economic conditions. That said, I thought I would check in and see if they were seeing any light at the end of the tunnel . In checking in with the president, things were looking a little more rosier on some fronts and he was confident they would pull through this leeeeennnnnggggttttthhhhhyyyyyyy downturn with a strong team still in place and without getting knocked around the way many of his competitors have (not only is he a good engineer, but he is a better business man). In any event, we were talking shop and he began to educate me on their most recent hurdle – getting squeezed!
Now – the company has spent many years brewing up the perfect balance of public and private clients. On the private side, they are 25% commercial/25% industrial, and on the public side they are 25% transportation, 25% other government. Because of their diverse client base, they have been able to fight through these difficult times with a just a few bruises; but now they are getting squeezed…by municipalities, cities, and even by their main DOT client; a client that has recognized them as one of their top, if not THE top consultant for them over the past 15 years.
Well first of all, the DOT, as well as other government clients, have been cancelling contracts and absorbing much of the work that they had previously awarded…and started! So I get that; its happening in many different parts of the country, and I get the rhyme and reason behind it…I don’t necessarily agree with it, but I get it. So that is one way they are getting squeezed.
But now the state DOT is requiring that any prime consultant who bids for a project must have, not 2 or 3…not 4 or 5…but 6+ sub-consultants tied to the contract. Most states require civil engineering consultants to spread the wealth by teaming with DBE’s, MBE’s, etc. to help them get a piece of the action. But for a mid-sized company who is too big to chase the small stuff, and not large enough to go after the $100M projects, how can they expect to grow or expand, or even maintain for that matter with those types of restrictions? I will tell you, knowing this organization as well as I do, they will end up making lemonade out of the lemons that have been dealt to them, but my question to you is…
Is this fair? Is your civil engineering firm getting squeezed as well?