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Falling back in love with business development #LoveBDAgain

Last week’s American Institute of Architects (AIA) convention brought more than 18,000 attendees from around the globe to the Georgia World Congress Center in Atlanta. The three-day event featured more than 300 educational sessions/workshops and a massive expo with nearly 800 exhibitors.

As in years past, Deltek’s presence was in full force at this premier architecture, engineering and construction (AEC) event. In addition to showcasing Deltek solutions on the expo floor,  Senior Product Marketing Specialist Megan Miller led a seminar titled “Fall in Love with Business Development Again” to a packed crowd on Thursday afternoon.

 

Alongside Wallace Engineering’s Brad Thurman, PE, FSMPS, CPSM, Miller covered the common pain points identified by business developers and presented tips on how to reengage the industry and win more business.

 

A 2014 study by the Society for Marketing Professional Services Society (SMPS) – “The Seller-Doer Model: Is it Really Taking Hold – and Is It Working?” – revealed that 63 percent of firms surveyed reported an increase in the number of seller-doers in their company, where employees are not only responsible for business development (BD), but also sales, technical, marketing and client support. However, only 4 percent of companies considered their seller-doers as “highly effective.”

 

A major obstacle with this growing seller-doer model is the lack of time devoted to business development when having to wear multiple hats. Miller stressed that “business development is the lifeblood of your organization,” and Thurman reminded attendees that BD is not about sales, but about “nurturing relationships.”  

 

Many attendees reported they simply don’t have enough hours in the day to dedicate to BD, and they often find themselves doing tasks they don’t enjoy, such as cold calling, expense reports, and attending meetings. Thurman and Miller provided several practical tips for spending more time on the tasks you love and blocking time for business development.

 

Miller also touted the importance of being more selective in business development. Statistics show it takes 100 cold calls to get one lead; therefore, companies should narrow their prospect lists and truly nurture that network. Taking the time to learn about a potential client and their needs before approaching them goes a long way in distinguishing your organization from the rest. 

GovWin IQ offers several solutions to help business developers learn about potential clients and narrow their prospect list in the public sector. GovWin IQ’s Government Snapshots tool combines government data with Deltek’s expert analysis and forecasting tools to provide vendors with key information on spending, population, agency contacts, employment, bids, and more so that they can make informed business decisions in their target markets.

 

GovWin IQ Lead Alerts act as the first hint of a project for business developers. Our analysts are scouring government websites and reviewing state and local capital improvement plans (CIP) on a daily basis to identify new projects across all vertical markets and provide updates on past CIP initiatives. Lead Alerts help you identify projects planned years in advance so you can start building relationships with prospects early.

 

Further, GovWin IQ’s newly expanded contract awards database offers business developers deep insight into current contracts across the state and local market, expiring agreements that may be rebid, as well as bid tabulations/bidders lists offering strong competitive intelligence.

 

Learn more about GovWin IQ solutions with a free trial

 

Public-private partnerships may yield high-dollar contracts

Public-private partnerships, or P3s, have been around for decades, helping states with funding problems utilize a contract with a private company that, in turn, will run a large portion (or all) of a project. The number of states that use P3s has grown steadily over the years, with approximately 33 states and the District of Columbia having legislation to allow usage.

One of the major components of P3 legislation is the use of partnerships in development of transportation infrastructure such as bridges, roads, tunnels, etc. A state may not have the funding to develop a new bridge, but through a P3 agreement, the vendor foots most of the cost and collects tolls from the bridge in exchange. One major project that utilized this agreement was the Port of Miami tunnel. The $663 million project needed outside funding – in this case, from Bouygues Civil Works. Later, the state utilized another vendor, Transfield Services Infrastructure, to operate and maintain the tunnel.

Below is a glimpse of GovWin IQ’s snapshot of Miami-Dade County’s construction expenditures for fiscal year 2014. The chart shows that air transportation and transit-related projects top the list at more than $600 million.

Many high-dollar projects are available when looking at the architecture, engineering and construction (AEC) industry as it relates to P3 transportation initiatives; however, with only 33 states having legislation and varying requirements, it becomes a difficult maze to navigate. The National Conference of State Legislatures (NCSL) has a toolkit for legislators, which also provides insight on state laws and the differences among them.

P3 agreements are not solely tied to transportation projects. Prison facilities, primary and higher education facilities also require significant budget, especially for new construction or upgrades to existing infrastructure. AEC vendors will have many projects to bid on outside of P3 agreements, but these partnerships often allow more flexibility and opportunity to team with vendors as prime or subcontractors.

AEC vendors should not necessarily seek out P3 agreements, but being aware of their availability and what benefits they offer is essential in understanding the market. P3 projects can offer flexibility and options that aren’t typically available with a standard professional services contract. They can be larger in scope, size and contract value, and are worthy of special attention and consideration when examining your bottom line.

GovWin IQ’s government snapshot tool combines government data with Deltek’s expert analysis and forecasting tools. Our government snapshots provide vendors with key information on spending, population, agency contacts, employment, bids, and more so that they can make informed business decisions in their target markets. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial. 

 

 

 

 

First quarter indicates strong year ahead for AEC market

The first quarter of 2015 was quite busy for the architecture, engineering, and construction (AEC) sector, with approximately 19,500 solicitations released. The number of bids grew steadily throughout the quarter, with 5,725 issued in January, 6,139 in February, and 7,636 in March. This growth indicates that governments will continue to increase their procurements as the warmer months roll in.

Nearly 30 percent of the solicitations released in Q1 had a general government requirement, while 28 percent had a transportation requirement. Education was a close third at 21 percent. Not surprisingly, most bids were released out of transportation departments, even beating out purchasing and procurement departments, which came in second in the number of bid issuances.

According to the bids captured in the GovWin IQ database, the top five states with the most solicitations released were Texas, California, Virginia, New York, and Ohio. Bids coming out of these five states accounted for just more than 32 percent of total bids released in Q1, and would be excellent locations for AEC vendors looking to expand to new markets.

On a more local note, the top five cities and counties releasing bids in Q1 were New York City (NY), Los Angeles County (CA), the city of Columbus (OH), the city and county of San Francisco (CA), and the city and county of Honolulu (HI).

The rising number of solicitations released in Q1 is a strong indicator that the AEC sector is in recovery mode after the 2007 recession and that not only states, but local governments, which often lag in the recovery process, are finally at a point where they feel comfortable spending again. Vendors should expect the number of AEC solicitations released to be on par with Q1 for the remainder of 2015. For additional details about what state governors have in store for AEC, take a look at Deltek’s state infrastructure priorities blog.

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.

 

State infrastructure priorities: Where do states want to invest?

Deltek’s Industry Analysis team published its annual State of States report last month, which analyzes each governor’s state-of-the-state speech for key projects anticipated in the year to come. Thirty-three governors mentioned major architecture, engineering, and construction (AEC) projects in their addresses. Below is a list of several high-value AEC projects states are focusing on in 2015.  

Water/Energy projects – $13 billion estimated value

  • Alaska Governor Bill Walker (Independent) announced his administration will begin building the Alaska gas line to Tidewater, at an estimated cost of $10 billion.
  • California Governor Jerry Brown (D) announced his administration will invest in long-overdue water projects, saving $2.8 billion in the state's new rainy-day fund.
  • Montana Governor Steve Bullock (D) asked for support for his infrastructure plan, The Build Montana Act, which would invest more than $300 million into bridges, water and sewer systems, schools and roads.

Roads – $4.7 billion estimated value

  • Texas Governor Gregg Abbott (R) added more than $4 billion a year to the state’s budget to build more roads in Texas.
  • Indiana Governor Mike Pence (R) called for an additional $300 million in funding for roads to allow cities and towns new resources to plan regional growth strategies.
  • Nevada Governor Brian Sandoval (R) called for a $250 million investment in Project NEON to improve Southern Nevada’s I-15, reduce congestion, and create construction jobs.
  • New Mexico Governor Susana Martinez (R) proposed at least $180 million of infrastructure money over the next three years for major highway construction projects across New Mexico.

Building/School Revitalization - $1.8 billion estimated value

  • North Carolina Governor Pat McCrory (R) will submit to the General Assembly a $1.2-$1.4 billion bond proposal for Project Phoenix, to revitalize old buildings, build more efficient facilities, and spur economic development.
  • North Dakota Governor Jack Dalrymple (R) called for an additional $300 million for the school construction revolving loan program.
  • Tennessee Governor Bill Haslam (R) allocated $260 million in this year’s budget for capital projects including new science facilities at Jackson State Community College and the University of Tennessee, nearly $25 million for improvements to colleges of applied technology across the state, and funding for a fine arts classroom building at East Tennessee State University.

Transportation - $1.4 billion estimated value

  • North Carolina Governor Pat McCrory (R) announced he will request a transportation bond of $1.2 billion to allow quicker construction of projects in the 25-year vision plan.
  • New York Governor Andrew Cuomo announced a $65 million investment in ports and hubs from Albany to Oswego, to Syracuse, to the Port of Ogdensburg, to the Binghamton Rail Yard.
  • Governor Cuomo is also calling for $150 million for construction of vertical parking structures at strategic locations in Long Island and Westchester to assist commuters coming in on the Long Island Rail Road.

Continued budget growth sets the stage for ongoing investments and innovation as the governors look to allocate a collective $750 billion in FY 2015 general funds across a variety of spending areas. For access to the 2015 State of the States report, please click here.

State and local Industry Analysis provides an in-depth comprehensive perspective of the market. Our highly trained analysts provide answers to your critical questions about agency priorities, budgets allocated for your technology or service, trends and forecasts in state and local technology spending – enabling you to determine your strategy and tactics for capturing more business. For more information on State and local Industry Analysis, click here

 

State and Local AEC Snapshots: Baltimore County, Md.

You know Baltimore County’s capital project plan is big when the Maryland Stadium Authority is the agency administering the project. How big? More than $1 billion big.

In 2014, Baltimore County Executive Director Kevin Kamenetz unveiled an aggressive $1.1 billion school renovation plan. More than 80 percent of the county’s schools are more than 40 years old, and school populations are expected to grow, despite the county’s 0.7 percent population growth rate.

In fiscal year 2014, Baltimore County spent $97 million on construction within elementary and secondary education, and an additional $19 million within higher education. Elementary and secondary spending is up from $84 million in fiscal year 2011, and the numbers are expected to rise dramatically with the billion-dollar capital project plan coming to fruition. 

It is no secret that local governments tend to favor local vendors when it comes to AEC contracts, but this doesn’t mean that a company based outside of Maryland or Virginia has no chance of winning a piece of the $1 billion pie. Vendors should be aware that the Maryland Stadium Authority has publicly stated that it is “not restricting it [contracts] just to local firms,” but “part of the desire of the program is to maximize local participation.”

Another unknown result of the county’s massive education infrastructure overhaul is the effect it will have on surrounding counties or even neighboring states. Many counties and cities across the country have dilapidated schools in dire need of renovation or replacement, but lack funding to pay for the upgrades. Baltimore County brought the $158 million education bond to voters in November 2014. It was the largest voter-approved referendum in the county’s history. Additional localities may take a similar route to put more money toward education.

A quick glance at the county’s surrounding Baltimore area shows a similar picture. Howard County’s top construction expenditure in fiscal year 2014 was elementary and secondary education, at $71 million. Anne Arundel County spent nearly $131 million on elementary and secondary education construction, also its highest expenditure. While education and construction on education-related projects are typically top spending areas for counties, it is clear that education spending has taken even greater priority in Maryland.

You can learn more about state and local spending with GovWin IQ’s State Profiles and Local Snapshots. Not a subscriber, click here to gain access with a free trial. 

 

What's next for P3s for state and local infrastructure?

U.S. Congressman Paul Ryan (R-WI) recently indicated that he thinks the states should have more latitude to use tolling to fund roadways.  As chairman of the House Committee on Ways and Means, Ryan oversees the federal highway trust fund, which is due to go broke in May due to a drop in gas tax revenues.

Of course, where there’s discussion of tolling, discussion of public-private partnerships (P3s) is not far behind.  According to the National Conference of State Legislatures (NCSL), 42 states and the District of Columbia already have tolling authorities in place (as of 2013).  Twenty of those states have privately operated tolling facilities.

However, major toll road concessions tend to be the domain of global mega-corporations with convoluted and (often times) controversial financing schemes.  But, the state and local architecture, engineering, and construction (AEC) market is taking tentative steps toward P3 arrangements for other types of infrastructure.  For example, Indianapolis is finalizing a $1.6 billion arrangement with Paris concern for an integrated justice facility.  This is one of the highest profile contracts in what might be an emerging trend of “social infrastructure” partnerships at the sub-federal levels.  In fact, a whole summit was recently dedicated to the topic.

Senior strategists for AEC firms will need to familiarize themselves with the types of P3 arrangements in play and the risks they entail.  Fortunately, Brookings has done some great work in this area. (See Brookings chart below.)

 Figure 1. Different Levels of Private Sector Engagement in PPP Contracts

 

 

 

 

 

 

 

 

 

However, given the fact that P3 failures can result in billion dollar losses for one party or the other, the debate often gets bogged down in who assumes most of the risk—the contractor or the taxpayers.  Firms that seek to maximize the win-win aspect of P3s should focus on usage projections.  Any public facility with a strong fee-for-service revenue stream (e.g., courts, jails, parking garages, parks, etc.) can be a target for a P3 arrangement.  Yet, the long-term success of any deal will depend on complex usage forecasts based on population growth, crime rates, and so forth.  Any forecast—especially one tied to political winds—looking more than a few years out becomes highly speculative.

Deltek’s Take

  • Even the most elegant and politically savvy P3 arrangement will fail if revenue projections based on overly optimistic usage fees come up short.  Somebody will be left holding the bag.
  • Contractors should seek a P3 relationship where the buyer holds enough risk to ensure honest appraisal of future usage of the facility but not so much that incumbent and future politicians run the risk of being accused of giving away the store to the contractor.  Privatization watchdog groups are becoming ever-more vigilant and effective in their ability to inflict political and legal pain on parties to bad P3s.
  • Taking lessons learned from past P3 failures, an emerging concept of “availability-payment” is intended to balance the contractor’s need for compensation with the public’s need for contractor performance, but the model has only just begun to be tested in the real world.

 

State and Local AEC Snapshots: Las Vegas, Nev.

Though cities nationwide felt the one-two punch of the Great Recession and its aftermath, Las Vegas, Nevada, was hit particularly hard. Aside from tourism naturally dwindling in the wake of economic collapse, property values in Sin City and surrounding areas also plummeted, resulting in a high number of residents fleeing the state. With Las Vegas’ biggest draw being casinos and entertainment, the city needed to find a way to bring people back – both to live and visit.

In fiscal year 2014, Las Vegas spent $180 million on construction within parks and recreation, far more than any other construction category (see chart, below). General public building construction ranked second for spending, at approximately $120 million. Please note that this data, provided by the U.S. Census, may include projects developed by various city agencies, though categorized under one label.

Las Vegas has upped the ante with spending on parks and other facilities in hopes of attracting new residents. It’s a smart move considering parks and recreational development often boosts quality of life and, in turn, attracts more people to houses that have dipped in value. The overall idea is to increase demand, which will increase property value and, ultimately, revenue for the city.

While Las Vegas is seen as a tourist destination, the city must also focus on improving infrastructure for non-tourists and businesses. The city is currently investing in infrastructure to attract Major League Soccer (MLS), National Basketball Association (NBA) and National Football Association (NFL) teams. While nothing is guaranteed, making a play to offer more parks and entertainment facilities makes the city more alluring for visitors, residents and businesses alike.

Architecture, engineering and construction (AEC) firms, both in the public and private sector, should bet on Las Vegas in the coming years. Construction is already beginning in the public sector and will only increase if the city lands a professional sports team. AEC vendors would be wise to monitor procurement activity and population increases in Las Vegas, all of which point toward more potential business.

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.

 

 

Funding port authorities could create spending chain reaction

On January 29, the American Association of Port Authorities (AAPA) held an event in Tampa Bay, Fla., on shifting international trade routes. One major topic of discussion was the need for more federal funding for the nation’s ports. The infrastructure at ports is reliant on funding to assist with improvements including security, equipment and general components such as roads and entrance facilities.

While the majority of port traffic is goods imported into the United States, exports rely on a long line of infrastructure to move goods to those ports. Approximately 78 percent of all U.S.-made good are shipped via container. If port authorities receive more funding from the federal level, spending will inevitably increase at the local level. Farms, local factories and other consumer industries rely on ports to ship goods overseas, and if the infrastructure at ports around the country were capable of handling more goods and offering quicker shipping, industry may look to increase production.

This chain reaction is a two-way street. Improvements to ports would be felt throughout the architecture, engineering and construction (AEC) industry, as local roads, bridges and other infrastructure will need to be capable of handling large trucks carrying shipping containers. Certain regions have roads designed for trucks, such as the New Jersey Turnpike, which provides access to the third largest port in the U.S. (Port of New York and New Jersey/Port Newark). In the other direction, transportation infrastructure across the country (not just in areas near one of the 149 major U.S. ports) is in dire need of improvements. If state transportation departments can move forward with improvements via federal funds, there will be greater access and safer routes to ports.

Keep an eye out for future analysis on specific port authorities and construction spending as Deltek continues to expand reporting on the state and local AEC market. The graph below highlights construction expenditures within the Port Authority of New York and New Jersey (PANYNJ). While general construction topped $1.1 billion in 2014, spending has remained generally flat within the PANYNJ. Federal funding could provide the much-needed AEC boost to the nation’s ports.

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.

 

State and Local AEC Snapshots: Fairfax County, Va.

The state and local architecture, engineering and construction (AEC) market reached new heights in the public sector last year, with construction put in place (CPIP) reaching $274.4 billion, per the U.S. Census Bureau. CPIP refers to the measure of the value of the construction installed. Looking beyond CPIP to related architecture and engineering consulting, the number would be even greater.

Deltek will begin looking at the AEC market through the lens of specific entities in order to understand how certain markets have evolved and where they are heading. Fairfax County, Virginia, is the subject of our first profile.

Fairfax County’s overall expenditures have increased 3.5 percent over the past nine years, due in part to increasing population and government employment. Drilling even further into the county’s construction expenditures tells a similar story.

The chart below depicts the top categories within the county’s construction spending as well as annual spending since 2011. Elementary and secondary education has consistently been the greatest construction expenditure, from $163 million in 2011, to nearly $180 million in 2014. 

One explanation for the significant rise in construction expenditures since 2011 is increasing population – from approximately 970,000 in 2000, to an estimated 1.13 million in 2013. With population increases comes a greater need for schools and other infrastructure to accommodate more people. While other construction categories showed modest growth, such as water utilities and highways, it doesn’t compare to the growth within education. Fairfax County, with its close proximity to the federal government, will likely see continued population growth and construction needs in widespread markets, not just the education space.

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.

 

State of the Union – Potential Opportunities and Impacts for Federal Contractors

In Tuesday night’s State of the Union address, President Obama highlighted issues and initiatives he hopes to tackle in his last two years in office such as improving “middle-class economics,” building U.S. infrastructure, and increasing cybersecurity.  

Reading between the lines we can attempt to predict the impact some of these initiatives may have on the federal contracting community.

The potential upside for federal contractors:  

  • Obama’s plan to improve infrastructure in the form of trains, bridges, ports, and internet speed and access could provide opportunities for heavy construction and IT contractors. 
  • Strengthening cybersecurity efforts may provide companies with additional opportunities to sell cybersecurity services and solutions to the federal government, as well as the commercial market.  
  • Easier, more affordable access to higher education and increased training will provide employers with a larger, better trained labor pool. 
  • The president’s Precision Medicine Initiative may provide contracting opportunities in the area of health IT, health informatics, medical research, medical technology, and medical devices. 
  • Revisions to the tax code may adversely or positively impact contractors and other companies depending on specifics of proposed tax code changes.  
  • The president’s commitment to continue to fight terrorism may provide opportunities for defense contractors. 
  • Obama’s statements about surveillance and privacy allude to continued funding for intelligence agency surveillance programs, but with emphasis on simultaneously safeguarding citizen privacy.  

The potential downside for federal contractors:  

  • Obama’s call for higher wages in the form of equal pay for women and increasing the minimum wage, may negatively impact companies’ profitability.  
  • The appeal for guaranteed paid sick leave for all employees may place a financial burden on small businesses.  
  • Potential new cybersecurity legislation could impose additional security requirements for federal vendors and service providers.  
  • Revisions to the tax code may adversely or positively impact contractors and other companies depending on specifics of proposed tax code changes. 

The President’s FY 2016 Budget Request, due for release in less than two weeks, will bring to light many of the proposals and initiatives mentioned in the State of the Union address, and is rumored to contain a substantial increase over current year budget levels.

For detailed budget information and federal contractor impacts, watch for Deltek’s future analysis of the President’s FY 2016 Budget Request in the coming weeks.

 

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