Central/West Construction Round Table Situation …...Central/West Construction Round Table Situation Report Summary as of May 1, 2020 Session Presenters o Eric Machac, Jacobs o Richard

Central/West Construction Round Table Situation Report

Summary as of May 1, 2020

Session Presenters o Eric Machac, Jacobs o Richard Deleoon, UT Systems

Future of Higher Education, Designer Insight Board meetings for major systems in Texas are in May and decisions will be made/confirmed for 2020-2021 academic

year Board of Regents Meetings - Dates

o TAMU System: May 13-15 o UT Systems: May 6-7 o UH System: May 21 o Texas State System: May 21 o UNT System: May 14

Trends & Observations o Travel and purchasing restrictions at many universities may affect execution of AE contracts and conference

attendance over the next 6-12 months o Some students/parents have discussed taking a gap year to evaluate what will take place within the fall of 2020-

2021 o Community College enrollment was already up and may increase as students take core classes closer to home o Past data shows there is an increase in enrollment during a recession, which leads to an increase in part time and a

decrease in full time enrollment o Some students have committed to a university but there is a chance that the students have never toured the campus o Students that choose to stay home and attend community college helps regions like Midwest which were struggling

to keep students due to the desire to go to the east, west or south coasts instead o There is a change in the way education is being delivered given the current social distancing protocol o Cyber security risks have increased which will lead to patch work to address vulnerabilities o There may be a chance that smaller universities may not be able to sustain and then evaluate acquisitions o Small public universities losses of $3m in housing, dining, etc. o Reduction in international students moving forward o Funded projects are moving forward as scheduled o Concept of university adaptive design will push forward with attention placed on modifying structure and

infrastructure capacities

Risk with Current Projects o On Campus Housing o Academic Spaces o Libraries o Student Life Centers o Recreational Centers o Petroleum Engineering

Virtual RFQ’s, Owner Insight AE & CMR Solicitations

o Pre-submittal/Pre-proposal Conference Powerpoint presentation viewed by attendees Online attendance sign-in Multiple remote presenters accommodated Questions managed via audio and text window Microsoft Teams platform was utilized

o Shortlist Meeting Multiple remote participants Common screen viewed by committee Screen images: Organizational charts, consultants, list, etc.

o Interview Multiple remote attendees, teams, and committee members 30-minute break in between presentations Some presenting teams switched between slides and speakers Audible and text questions from the selection committee were easily accommodated Committee deliberation and final ranking was also conducted virtually

o Lesson Learned Rehearse the technology in advance Emphasizes for all to mute mics when not speaking Designate a single meeting spokesperson to facilitate the meeting Use a group text for managing the selection committee during interviews As a contingency, provide a key phone number in the event of technical issues Adding a password protected invite is one way to reduce the chance of the meeting being hacked and

use/update unique passwords Conclusion

o The Texas construction community is eager to stay busy and are extremely appreciative of owners seeking ways to keep projects open

o Prime design firms and general contractors may consider devoting time to refining virtual interview skills DSI, Subcontractor Insight PVF commodities seem to be in ample supply A major valve manufacturer has slowed production There could be excess inventories for PVF and valves by the summer Some bid dates push to capital preservation Vermeulens, Economic Update & Escalation Unemployment is projected to be in excess of 30 million Proceed with design and preconstruction activities to get “shovel-ready” for a future start date Recent cost reconciliation data shows that most cost estimates are tracking towards January and February 2020 costs Long-Term Planning for projects 10 years out or more – 3.5% construction trendline average is a good resource to utilize

for long-term planning projects

Future Agenda Economics Update, May 8th Jobs Data General Contractor Insight, Sundt Virtual Site Observation Case Study Vendor Insight, Nora Flooring

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

Design & Construction Round Table

®

James Vermeulen – Co-CEORichard Vermeulen – Co-CEO

Blair Tennant – Associate Principal

North America’s Construction Economistvermeulens.com

Service Beyond Estimation

®

Agenda

1. DSI – Mechanical Subcontractor

2. Jacobs - Higher Education Trends

3. UT Systems - Virtual RFQ’s

4. Vermeulen – Economics & Escalation

Logistics

• Shifting to a new platform – all will receive a sign-up invite

• Please mute mics except for those speaking

• Please keep camera function off

• Interim questions and comments Via Chat

• Weekly summary “Situation Reports”

• Market Outlook “Special Report”

Contractor Insight

Brent Bertrand• PVF commodities seem to be in ample supply.• A major valve manufacturer has slowed production• There could be excess PVF inventories by summer.• We have had some bid dates push out some months• Energy Labs Tijuana plant is back on line at full capacity• No other HVAC equipment manufacturer issues

Higher Education Trendsdue to COVID-19

May 1, 2020

A Week in a Day • ONLY 8 weeks since Spring Break• BOR meetings for major Systems in Texas

are in May, will be decisions made/confirmed on 2020-2021 year

• TAMU System BOR Meeting: May 13-15

• UT System BOR Meeting: May 6-7• UH System BOR Meeting: May 21• Texas State System BOR Meeting: May

21• UNT System BOR Meeting: May 14

• Deadline of May 1 for Fall enrollment at many universities, and students are weighing options, waiting to decide

CORE SERVICES

Trends and Observations• Travel and purchasing restrictions at many universities,

may affect execution of AE contracts and conference attendance over the next 6-12 months (at least)

• Extension vs Advertisement• Some students/parents have discussed taking a gap

year, wait and see• Students electing to get higher degrees• Community college enrollment was already up, may

increase more as students take core classes closer to home

• Typically an increase in enrollment due to unemployment and recession, but has been increase in part time, decrease in full time

Trends and Observations• Some students that have committed to a university

already haven’t seen campuses because of travel restrictions

• Students could choose to go closer to home, which helps regions like Midwest which were struggling to keep students (desire has been to go to east, west, or south coasts instead)

• Parents with college students who moved back due to housing closures want them OUT

• Evolution in the way higher education is delivered, and how students learn on campus, will mean new building needs, may not match what is already planned in CIP

• Loose bits will fall off, and the weak will expedite

Trends and Observations• Small public university losses of $3M, in housing and

dining, private university predictions of $20M• Likely a reduction in international students, which

was as all-time high• Suspension of all study abroad programs probable • Technology deficiencies and security risks due to

increased online• Change to workplace and learn-place, as both

students and faculty adapt • Student Life is sorely missed by students, and will

change, as some will move off campus, increase need for collaboration and student gathering areas on campus

CORE SERVICES

Trends and Observations• Funded projects proceeding as scheduled• Concept of universally adaptive design will be pushed forward, with more

attention placed on structure and infrastructure that can be modified• Parking Garage to Housing• Housing to Admin• Academics to Labs

• Risk with current projects?• On-Campus Housing?• Academic Spaces?• Libraries?• Student Life?• Rec Centers?• Petroleum Engineering?• No Changes?

Virtual RFQ SolicitationsApril 2020

THE UNIVERSITY of TEXAS SYSTEM

13

Office of Capital Projects

Topic

Managing the RFQ process in a social distancing environment.

Virtual RFQ/RFP

• AE & CMR Solicitations• The Presubmittal/Preproposal Conference

• Powerpoint presentation viewed by attendees• Online attendance sign-in• Multiple remote presenters accommodated• Questions managed via audio and a text window• MS Teams Platform

Virtual RFQ/RFP

• AE & CMR Solicitations• Shortlist Meeting

• Multiple remote participants• Common screen viewed by committee• Screen images: Org charts, consultant lists, etc• Realtime populating the ranking matrix

Virtual RFQ/RFP

• AE & CMR Solicitations• Interviews

• Multiple remote attendees: teams & committee members

• 30-minute break between presentations

Virtual RFQ/RFP

• AE & CMR Solicitations• Interviews

• Some presenting teams switched between slides & speakers

• Audible & text questions from the selection committee were easily accommodated

• Committee deliberation & final ranking also virtual

Virtual RFQ/RFP

• AE & CMR Solicitations• Lessons Learned

• Rehearse the technology in advance (including with each shortlisted team)

• Emphasize for all to mute mics when not speaking• Designate a single meeting spokesperson for control• Use a group text for managing the selection committee during

interviews• As a contingency, provide a key phone number in the event of

technical issues

Virtual RFQ/RFP

• Conclusion

• The Texas construction community is eager to stay busy and are extremely appreciative of Owners seeking ways to keep projects open.

• Prime design firms and general contractors may consider devoting time to refining their virtual interview skills.

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Total Unemployed Currently Looking For A Job Part Time For Economic Reasons

US Unemployment

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Mar. 21

Economic Update - Index

Escalation Forecast

• Reconciled escalation rates maintained at or past the Design Development

• 3%-4% escalation for new projects or projects at or earlier than the Schematic Design

• Line item unit rates will be held at current values until market feedback data is available

• No reliable data or history on how long or deep this downturn will be.

• Potential offsetting cost increase in supply chain interruption and construction efficiency

• Vermeulens will continue to monitor market pricing and we will update as available

• A potential tool for consideration is the introduction of design add alternates in the 10% of cost range.

Open Forum

Contractors Owners Architects Engineers Sub Contractors

• Bids• Work Volume• Construction Logistics

Future Agenda

• Economics Update – May 8 Jobs Data

• General Contractor Insight – Sundt

• Virtual Site Observation Case Study

• Vendor Insight - Nora Flooring