Newly-formed Aecom Construction Services has revealed that it has secured preferred bidder status as construction manager on three London commercial projects currently under negotiation in two-stage bid processes.
ACS, which entered the market just six months ago, aims to take on contracts valued up to £100m, although it is understood that the schemes it’s in line for are all valued substantially below that threshold.
The new business, headed by former Bovis Lend Lease pre-construction director John Hilton MCIOB, in effect brings Aecom’s existing construction management capacty in the US and Russian markets to the UK.
In the US, it operates under the Tishman brand, while Aecom purchased Lend Lease’s Russia operations in 2013. However, ACS is an entirely home-grown operation, staffed by individuals who know the London market well.
John Hilton: “Two cultures”
Hilton told Construction Manager that ACS aims to capitalise on Aecom’s breadth of technical and design expertise to produce better engineered buildings, saying that it will aim to “spend more time on the design to take out 10% of the construction costs”.
“There are still two cultures within the organisation, but we are working towards bringing the construction and design mindsets together,” he said.
Also speaking to Construction Manager, Richard Whitehead, managing director of client-side programme management at Aecom, added: “Our value proposition is the depth of our technical expertise – we call it technical-led delivery. We’re an integrated construction businesses, we can do design, pre-construction and construction all in-house.
“It gets projects to site quicker, with better thinking and better constructability. If we need to solve a problem, we can easily get half a day’s advice [from a technical expert elsewhere in Aecom] to solve a problem.”
Speaking from a client-side project management perspective, Whitehead believes that launch of ACS is well-timed. “The industry seems to have reached capacity, tender returns are higher, and schemes are becoming less affordable. At the front end, we’re struggling to get bid lists together, and jobs are becoming expensive.
Richard Whitehead
“But there are also opportunities – clients will increasingly try to find someone who can do it differently. Projects will be value engineered, and reappraised, so contractors need to put more thinking into it. So it’s creating an opportunity for us in building a construction management business.”
“Skills shortages are a key issue – it doesn’t take long to get through the best team to the B and C teams. We’re well resourced at the moment, but that will be one of our challenges as we grow. In planning and scheduling, for instance, a lot of people are self-employed, so we’re building a sustainable in-house team.”
The Aecom team also added that offsite construction is likely to be part of their bidding and work-winning strategy, with Whitehead saying that “offsite is a key part of where we need to go”.
Hilton also says that ACS is trying to build relationships with a group of smaller specialist subcontractors, after finding that its direct competitors in the market had in many cases exhausted the capacity of the go-to names in Tier 2.
Meanwhile, Hilton suggested that contractors working on the current crop of City schemes needed to take a collaborative attitude on logistics and deliveries, to mitigate congestion and pollution in the City.
In the US, Aecom frequently combines investment in commercial projects with construction, via its Aecom Capital investment fund, with Whitehead pointing out that Aecom Capital is a major client of Tishman in the US. This combination of investment and construction management could also be applied in the UK, said Whitehead, but he anticipated this would be on a small scale.
