Company of the Year: AECOM
AECOM has around a dozen projects under construction that are worth more than $1 billion.
For the second consecutive year, AECOM is named Company of the Year, thanks to its infrastructure plans, strategic acquisitions, mega projects and hiring initiatives.
Although AECOM is among the largest players in the AEC space, it isn't content to remain a stagnant No. 1. Rather, the company is constantly evolving to keep itself in a position of leadership and to push its boundaries even further.
We are absolutely positioning ourselves to be a leader in the next generation of infrastructure.
Perhaps one of its biggest opportunities comes from the Trump administration's widely discussed $1 trillion infrastructure plan. "We are absolutely positioning ourselves to be a leader in the next generation of infrastructure," said Dan McQuade, president of AECOM's construction services unit. "No matter what happens [with the infrastructure bill], there will be an increased number of projects and more design-build."
In AECOM's efforts to position itself as an infrastructure leader, it acquired Shimmick Construction in July, substantially expanding its West Coast presence. McQuade said the acquisition was part of AECOM's strategy, not simply an opportunity that presented itself.
"We look at the company, at our project strategy and where we think we don’t have the right resources," McQuade explained. "In the western U.S. we have great capacity, great clients and a lot of infrastructure and transportation projects. We needed the right construction expertise, so we acquired Shimmick."
McQuade anticipates niche acquisitions in the next year. Those acquisitions, he says, will likely be focused toward the company's recently implemented capital allocation policy with the goals of near-term debt reduction and stock buyback.
In the western U.S. we have great capacity, great clients and a lot of infrastructure and transportation projects. We needed the right construction expertise, so we acquired Shimmick.—Dan McQuade, President, AECOM's construction services unit
McQuade attributes the company's revenue growth to mega projects. AECOM has around a dozen projects under construction right now that are worth more than $1 billion. Some, such as One Vanderbilt and Hudson Yards in New York, and the Los Angeles Rams stadium, are approaching the $3 billion price tag. "We have a skill set for really big complicated projects and that's what’s driving our growth," he said. "Stadiums and integrated delivery projects in civil engineering."
Those big projects are the same ones that drive young talent to the business. In May, AECOM announced it planned to hire 3,000 workers to further its infrastructure operations. Skilled labor, architects, engineers and other new hires will focus on transportation, building, environment, water, defense and energy projects.
"Our ability to win those projects helps us personnel-wise as much as anything because they're magnets for top, ambitious people," McQuade said. "That's how I got into this 30-something years ago. I was working in New York for a small contractor and used to walk by JP Morgan's headquarters on Wall Street and thought 'That’s what I wanted to be working on.' It felt like the big leagues. That was true 30-something years ago and it's true today for AECOM."
In 2018, McQuade said the company anticipates using technology more to manage and execute projects. "We're on a growth curve," he said. "We just have to make sure we keep delivering the quality our clients expect."
Follow Laurie Cowin on Twitter