The Dotted Line: How to develop a collaborative team that wins bids
This feature is a part of "The Dotted Line" series, which takes an in-depth look at the complex legal landscape of the construction industry. To view the entire series, click here.
It takes a wide variety of expertise and skills for major projects to be completed successfully, which typically means on budget and on schedule. However, the collaboration between designers, contractors and other specialists critical to the job doesn’t always begin after the contracts have been issued or when crews get ready to take the first shovels to dirt. Sometimes the team comes together for the bidding process.
For example, just last month, the St. Louis Post-Dispatch reported that three teams would submit full bids this summer for the $700 million construction component of the new $1.7 billion National Geospatial-Intelligence Agency headquarters. One team consists of Clark Construction Group, JE Dunn Construction and architecture firm HOK. The second includes McCarthy Building Cos., HITT Contracting, Fluor, Gensler and Black & Veatch, and the third counts Alberici Constructors, Mortenson and Corrigan Co. and Civil Design among its members.
Team bidding has several advantages, said Quinn Murphy, commercial and construction attorney with Sandberg Phoenix in St. Louis. With qualified designers, engineers and contractors on the same team, he said, the project should end with a higher level of quality and efficiency. Having all the companies on the same team also eliminates the squabbles that can erupt between, for example, the architect and contractor because their interests in the project are now aligned.
There are challenges too, Murphy said, like the potential for fewer checks and balances. When designers and contractors are on the same team, gone are the eagle eyes that normally call out potential mistakes or omissions.
In addition, architects are no longer the guardian of the owner's interests when it comes to issues like change orders and deadline extensions like they are on projects where designers and contractors have separate contracts with the owner. “The designer usually plays project policeman on behalf of the owner,” the lawyer said.
If there are worries in this regard, Murphy said an owner can protect its interests by hiring an individual or firm to provide independent project oversight.
While there are local and national firms included as part of team bids, there are several companies whose names pop up frequently when it comes to large project bids, and AECOM is certainly one of them.
AECOM led Oaktree Capital Management and Turner Construction in a near-successful bid for a new $1 billion Kansas City International Airport terminal last year, but is also on the team that was selected in February to engineer and build a $5.3 billion light-rail system in Montreal.
Daniel McQuade, group president of construction services at AECOM, said the company has almost 90,000 employees and an extensive network of contacts, so finding projects that require a team-bidding effort isn’t a problem.
“Rarely does a big project happen that’s not on our radar. We hear about everything,” McQuade said. Sometimes those projects are also introduced through the company’s design business or by repeat customers, which make up a significant piece of AECOM’s business, he added.
JLL was part of a team that bid on the Kansas City terminal project. Attending aviation conferences and developing relationships with key personnel in advance of a project announcement is important, said Stephen Moulton, vice president at JLL, not only to win work but to achieve a deeper understanding of how to best serve potential clients.
The Federal Aviation Administration (FAA) is also a source of airport project leads, Moulton said, as airports are required to develop five-year capital plans so that the agency can anticipate funding needs. Companies that JLL has worked with are valuable sources of information as well, he added.
It also helps to be an effective marketer. “You need to be out on the street talking to these clients,” said Moulton.
Selecting a partner
If there is plenty of notice about a major project, said Mark Konchar, chief of innovation at Balfour Beatty, a team could be assembled as early as months or even years in advance of the bid deadline date. Balfour Beatty is part of the team that bid and recently won the $2.7 billion people mover project at Los Angeles International Airport.
Partnering with other firms as soon as possible can be particularly important if there is a diversity requirement on the project. Finding experienced minority-, women- and veteran-owned businesses is already a challenge for many contractors, and in a high-stakes bid, a few firms can snap up the ones that are most qualified early on.
Moulton said in these situations, or in any scenario where the right expertise is hard to come by, one contractor may be part of multiple teams, as long as the owner agrees. If the client allows exclusivity, then sometimes the first-choice firm, he said, can make recommendations for potential team members that have the right skill set or a certain disadvantaged or minority status.
What AECOM looks for in a potential bidding partner, McQuade said, is a company that can deliver when it comes time to build the project, not just to help churn out a successful bid. The partner company, he said, must be like-minded on several fronts, including how much risk it is willing to take on, its ethics and competency and safety record, and have a complementary expertise.
In addition, the company must be financially stable so that it can carry out its responsibilities through the bid and construction processes, he added.
AECOM has a broad base of design and construction partners from which the company can choose, but if it doesn't have strong presence in a particular market, it sometimes deviates from that strategy by choosing a partner with a better read of the landscape. “Construction is still local,” McQuade said.
Occasionally, there is a local contractor that is known to the owner and is perceived as a good, strategic partner. “When somebody says they’re a well-connected contractor, it’s not a negative,” McQuade said, “but they still have to check all the other boxes as well.”
As the team comes together, a leader will emerge, if not for the project then for the bidding process.
“The best teams will jointly manage, govern and execute during the proposal phase,” Konchar said. “Establishing clear roles and responsibilities helps a great deal.“ Balfour Beatty, he said, often assigns a “strategic pursuit leader” to help manage the bid process. “If one of the firms has an existing relationship with the client,” he said, “then (that company) would be the obvious choice to lead during the pursuit.”
“We’d prefer to be managing partner, but there are projects where we're not,” McQuade said, “for one compelling reason.” For example, AECOM would step out of the leadership role, he said, if the project required a company with highly specialized skills in a very specific area.
But for the majority of big projects where AECOM has significant risk and exposure, the company would typically be the lead during the bid process and construction, McQuade said.
Dealing with a bad fit
Once the team is put together, Moulton said, “you have to sell that team to the client.” That means making sure that the owner doesn’t have an issue with any partner. Determining that, he said, can a tricky proposition if the bid rules prohibit direct contact with the owner for a certain period before the award.
“Bad choices will happen,” Konchar said. Just like shared governance, the terms of separation are always a topic for negotiation. Balfour Beatty has had “tough partners,” but has always worked through any issues, he added.
A lot of disagreements between team members boil down to personality conflicts, McQuade said, but sometimes they can be based on a real difference in terms of the way team members approach a project. If there are fundamental differences, he said, it only gets harder to remove someone from the team as the bid moves further along the process.
“There will be a temporary hard feeling,” he said, "but you've got to make a change sooner than later.”
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