[owners] are [realizing] they lack a strategic approach to the delivery of their projects and have less control over costs,” says Peter Heald, president of Cumming. “Many owners are engaging [CM] firms on an on-call basis, providing ample flexibility while still enabling [the owners] to deliver a higher-quality capital project with a more predictable cost outcome,” he says.

Owners are still trying to do more with less, down­sizing their facilities staffs and relying on outsourced management. “PM-CM services are support functions for such organizations and critical to spending capital judiciously but not necessarily to core business ser­vices,” says Herschel Baxi, managing director, PMA Consultants. So, many owners see no point in bringing CM-PM work in-house. Using third-party CM firms to deliver these services avoids adding to the owner’s overhead, Baxi says.

Broader Palette

The lack of trained in-house staff, coupled with a lack of funding, particularly among public agencies, is creating an opportunity for CM firms to expand their palette of services. “The market has shifted well beyond the need for hiring just a construction manager or owner’s agent to do quality inspections,” says Blake Peck, president of McDonough Bolyard Peck Inc. “We are getting more requests for services such as com­munity outreach, planning facility move-outs, securing funding and the like. We are getting much more into high-input program management.”

Heald says owners also are using CM firms to help with industry economic analysis before starting a con­struction program. “We are seeing a growing trend in needing to provide owners detailed market-condition data and information on current economic cost drivers,” Heald says, adding that data collection and analysis helps minimize risk and maximize the value of projects through cost and schedule management.

Program management is becoming a significant factor in large projects. “Transportation is strong for us, particularly in aviation,” says David Richter, presi­dent of Hill International. He says Hill is working as PM on numerous airport projects in Phoenix, Los Angeles, San Francisco and Salt Lake City, among other cities. But Hill’s biggest project is on the Muscat International and Salalah airports in Oman, where it has 360 staff at work, Richter says.

The energy sector is a growing market for program management firms. “Due to the scale, there is a grow­ing need for centralized program management with the expertise to cover multiple projects,” says Chris Baxter, senior vice president of Faithful+Gould.

Noting another trend, Baxter says the private sector is moving away from design-build to more traditional methods “because owners recognize they are not fully prepared to define their requirements and turn over control to the design-builder at the early stages.” He says PM firms increasingly are being asked to guide owners to the most appropriate delivery system.

Demographics is helping expand the professional services market. As young people gravitate to urban areas and aging baby boomers and empty-nesters look for a more active lifestyle, developers are responding with large, mixed-use developments planned in cities and suburbs near downtowns. “The scale and complex­ity of these hospitality, residential and commercial projects [can reap] significant benefits using expertise from program management,” says Baxter.

Green building is another area in which profes­sional services are making an impact. Owners worried about the up-front costs of building green do not real­ize “the long-term benefits, not only to the environ­ment but operating-cost savings,” says Ronald Takaki, vice president of project operations at Gafcon Inc. He says the firm is often asked to investigate the economic feasibility of sustainable design and construction.

The international market continues to be strong for CM and PM service firms. “We have been asked to help open up the Mexican market to support all the oil and gas work there,” says D’Agostino of CMAA.

Hill International is still finding success in the over­seas market. “The Middle East continues to be really strong for us,” says Richter. Hill and Louis Berger recently won a CM contract for three of the six lines of the $22-billion Riyadh metro system, being built in Saudi Arabia.

But Richter says Hill is now targeting Asia. “We are finally getting some traction in the Chinese market,” he says. India, with its vast infrastructure programs and needs, is a major focus. “There are not many Western firms doing a lot of program management work there, but interest in Western management techniques in India is growing,” Richter says.

Finger-Pointing

While the market for professional services firms is growing, the recession has left its scars. A developing issue is the increasing number of disputes over perceived failures of professional services providers on bad projects. “During any market downturn, there is a tendency for owners to go for the lowest price without regard for qualifications,” says Peck. This mentality has resulted in standard-of-care disputes in cases involving a low-bidding program manager that did not perform to the owner’s satisfaction, he says.

Many CM firms are concerned by the increasing number of claims against construction professionals in the past few years. Some firms say most of the claims are errors-and-omissions claims against designers, but CM firms worry the wave of litigation may hit them, as well.

To avoid disputes, CM firms have to be clear about what duties and responsibilities they are prepared to assume against what the owner’s expectations are, says Peck. He says it is a matter of communication. Further, if client expectations exceed what a firm is prepared to assume for the proposed price, the CM firms should just say no to the project. “You can’t let your marketing side make promises that are not being paid for. You have to have the ethics to tell a client you can’t do the job for that price. Sometimes, the best decision is simply to walk away from an opportunity,” Peck says.

One important development in the professional services arena was the decision last July by ABET (formerly, the Accreditation Board for Engineering and Technology) to make CMAA an ABET member group and invite the organization to develop standards to enhance and improve the quality of education for professional construction management in higher education.

“Most university construction-management pro­grams are offshoots of construction programs where the emphasis is on contracting,” says D’Agostino. Today, professional managers need to be more adept at the soft sciences, such as communication skills and leadership, than calculus, he says.

“The current construction process is becoming more concerned about communication, cooperation and fostering a team environment than which delivery system is being used,” D’Agostino points out. “A construction manager has to be able to break down the silos between various players and get them to work together.”