With a huge building stock at their disposal, state and local governments can be attractive clients, especially in these difficult economic times.

August 07, 2012

7. Be wary about fees, but don't assume you'll be exploited

Twelve years ago, in an effort to foster collaboration, Bockstael’s office instituted a monthly Industry Advisory Council meeting, which it has been hosting ever since. Participants include virtually all of the regional construction industry’s key players—AE firms, construction managers, and the various contractor organizations. “We invite open discussion on how our department is doing, what changes need to be made, and other industry problems that maybe we, as an organization, can address or change,” says Bockstael.

“We believe we have a fair system of compensation,” he says, “and have benchmarked our fees with other states, organizations such as various colleges within our region, and private companies that often hire these types of consultants.”

Robert F. Pulito, AIA, president of the S/L/A/M Collaborative, Glastonbury, Conn., says the Nutmeg State has been an enlightened patron. “When the recession hit and everybody was struggling for work, a lot of the state work continued at a reasonable pace. Private institutions and corporations really dropped off, but our state work did not.” He says that many private-sector corporations, schools, and institutions “took full advantage” of the economic situation to squeeze fees but the states did not. “The states know what it takes to do the work,” says Pulito. “The fees they pay are reasonable for the effort they expect. Plus, they are interested in maintaining high quality.”

Atkins’s Rudolph echoes that point of view. “There are overly cost-competitive clients out there who don’t care if you lose money on a project,” he says. “On the other hand, government clients push you, and they’re competitive about their expectations, but for the most part they do care about their communities, and they are not there to put you out of business.”

Unfortunately, not all public entities were so benevolently inclined during the economic downturn. “The big concern is the lack of opportunity at this level,” says Miller Hull’s Rochon. “There are opportunities, but they’re limited. And for firms that do a lot of public work, like we do, we see risk aversion at the municipal level.”

Moreover, says Rochon, many large firms have been going after smaller projects that they might ordinarily have passed over, which pushed fees downward. “In 2007 and 2008, when it was really crashing, local governments were getting incredible deals on their public projects,” he says. “They were bidding at 25% or 30% below what we had estimated.” The point: Don’t blame low fees entirely on the states and cities.

8. Push the right local hot buttons

Rudolph says a game-changing trend he calls “hyper-local presence” has recently made its way onto project checklists, particularly with local governments in Florida and Texas. “It used to be that it wasn’t a big deal if you were based in Houston and went for a project in Austin, but there seems to be new scrutiny that is looking for very local staff,” he says. “Clients want to know that you’re an architect in the city, not just in the county.”

Of course, many local governments also have sustainability as a hot button. According to the U.S. Green Building Council, 384 cities, 58 counties, and 34 states reference LEED in some way for public buildings.

Since 2000, for example, Austin, Texas, has mandated LEED Silver certification for new or reconstructed municipal buildings. Kalpana Sutaria, AIA, LEED AP BD+C, PMP, supervisor of the project management division of Austin’s Public Works Department, says, “It’s a constant learning process for the contractors and their subcontractors, but our consultants seem to be much more on board in the last few years. When we did the first project, in 2001-2002, they were not as familiar and the fees were higher, too.” Now, she says, training and experience, plus the ability to visit the city’s 15 LEED-certified projects (including the LEED-EB:O+M Gold Austin Convention Center), are all proving to be helpful.

9. Go for the dough—'Essential services'

Among today’s active state and local government-owned projects, many have been specifically funded for so-called “essential services.”

“There is an abundance of specifically funded projects,” says Atkins’s Rudolph. “In most of the states we deal with, public safety projects are funded, as are emergency operations centers. Beyond a lot of smaller projects and deferred maintenance projects, it seems to be the essential buildings that are being funded.”

Texas Facility Commission’s Raff says his organization has been working on crime labs and regional offices throughout the state for the Department of Public Safety. They also recently completed the $35 million Texas Center for Infectious Disease, a tuberculosis treatment facility in San Antonio. Although the revenue bond for this project was approved in 2001, the legislature only released the money in 2007.

Another prime example of an “essential” project is the new 525,000-sf Travis County (Texas) Civil and Family Courthouse, now in the conceptual design stage. The county is building the new courthouse in Austin to provide badly needed space for court-related support facilities and technically up-to-date courtrooms.

“Today’s family courts have very specialized needs,” says Belinda Powell, strategic planning manager in the county’s Planning and Budget Office. “It’s not necessarily the traditional courtroom setup. You have to deal with all the participants in family life, which could be several parents and grandparents involved in the proceedings around one child.”

The existing courthouse, built in the 1930s, simply does not offer the necessary non-courtroom space to accommodate offices for the many county support agencies, nor does it have an adequate circulation system to keep the public and persons in custody separated. “Modern courtrooms need much more than what was available in the historic facility,” says Powell.

Meanwhile, the historic courthouse will be used for more suitable purposes, such as probate court. “The idea is to create new facilities to meet new needs, while repurposing older facilities for more suitable functions,” says Powell.

What, then, are state and local government clients looking for in their Building Teams? “Long-term, established relationships, above anything else,” says Atkins’s Rudolph. While this has always been a factor, he notes that, in today’s climate, “You have to be a known commodity, you have to provide best value, and you have to offer low risk to your owner. They need to know that they will look good in the end.” +


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