Is Your Civil Engineering Firm Getting Squeezed?

August 15, 2011 at 2:40 pm 7 comments



Matt Barcus
President, Precision Executive Search, Inc
Managing Partner, CivilEngineeringCentral.com
View Matt’s profile & connect with him on LinkedIn

 

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.

I know, I know,  what do I mean by “squeezed?”

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?

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Entry filed under: Civil Engineering, civil engineering blog, Civil Engineering Companies, Civil Engineering Issues, The U.S. Economy & Civil Engineering.

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7 Comments Add your own

  • 1. Top 10 Blog Posts of 2011 from CivilEngineeringCentral.com «  |  December 27, 2011 at 10:12 am

    […] 8.      Is Your Civil Engineering Firm Getting Squeezed? […]

    Reply
  • 2. Mike Urbanek  |  August 18, 2011 at 12:37 pm

    Political correctness run amok.

    Reply
  • 3. youngmotivatedengineer  |  August 17, 2011 at 9:24 am

    Matt, it sounds like the state DOT is trying to make up for situations that are really out of control…unemployment. When times are tough like they are now and unemployment rates are high, everybody wants to find a way to increase employment rates and spread around work load so more people have a job. The state DOT is doing this by trying to keep more work in-house to avoid looking bad by laying people off, as well as helping smaller guys by splitting up the work amongst many parties.

    The situation that people don’t seem to focus on employment rates when economy is good. For the jobs that they are trying to save, how many were justified when they were hired? How many of the small engineering firms are warranted and skilled to provide the quality service that they should as an engineer? As technology changes the need to have large number of employees will decrease. Just look at the US Postal Service. People push paperless billing and onlinte shopping to be more envionmentally friendly. As a result the amount of mail being produced is decreased, but yet people still want to save all the people that are currently employed for them and keep all the branch offices open even though the volume has been reduced alot.

    Reply
    • 4. aepcentral  |  August 17, 2011 at 9:34 am

      Hey Bill,

      I agree. But is it fair that they are now required to have 6+ sub-consultants on their proposals? If they are going in as a Prime on major engineering project, the additional services that they would normally keep in house (i.e. surveying, planning, traffic controls, drainage, etc) may now have to be outsourced in order to meet the requirements. If that trend continues, then they will lose that work in house and may have to layoff their experts in those areas – so they may be keeping other folks employed, but they may create unemployment for others, so the net net is zero…

      Reply
      • 5. youngmotivatedengineer  |  August 18, 2011 at 8:17 pm

        It is not fair that they require 6+ sub-consultants. What I was trying to get across is that DOT should not be trying to save the world of unemployment by requiring so many people. Times change and so do professional demands. When there is an overflow of work, bring on people. But at the same time when their is a lack of work, don’t be afraid to reduce the work staff.

  • 6. Don Thomas  |  August 17, 2011 at 8:28 am

    Matt,
    Tell your client “Welcome to no-man’s land” where the survival rate is 2%! They have to grow their way through it, and in a focused way, or risk the 98% fate. Strategic planning is a great way to assure successful navigation.
    Don T.

    Reply
    • 7. aepcentral  |  August 17, 2011 at 8:45 am

      Hi Don,

      Thanks for reading! No Man’s Land is exactly what it is…luckily while they were keeping their noses to the grindstone they did keep their finger on the pulse so they are addressing these issues head on. Sorry for the rash of idioms 🙂

      Matt

      Reply

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