Many A/E/P, Environmental Firms Report Work in Pipeline, but for Some, Pipes are Clogged

Despite recent news about a slow economic turnaround, a surprising number of architecture, engineering, and planning (A/E/P) and environmental consulting firms report an acceptable or increasing backlog of work.

Business-management-services provider ZweigWhite conducted an informal online survey of firm leaders, reporting the results in the Aug. 8 edition of its weekly management publication, The Zweig Letter.

With more than three to four months of work in his firm’s backlog, one respondent, Josh Carney, PE, president of Carney Engineering Group, a nine-person structural engineering firm based in York, Pa., said: “This is the first time since around early 2009 that we have had a sustained backlog worth measuring. It has been holding or growing steadily for around four months now.”

None of the survey respondents reported working to fill an empty pipeline. The majority of respondents, 57.1 percent, have more than six months of work in their backlog. The rest of the respondents were divided evenly among each of the other three categories: five to six months, three to four months, and one to two months of work.

Client selectivity and the careful weeding out of bad clients has been a key to success for a number of firms.

“We were very cautious going into the downturn and weeded out a lot of the deadwood contracts,” Paul Jewel, chief operating officer of Nelson\Nygaard Consulting Associates in San Francisco, a 70-person engineering and planning firm, said.

Jewel reported being booked for the next five to six months.

While business-development efforts may be contributing to a steady backlog of work, factors outside of a firm’s immediate control, such as tighter banking practices and other economic factors, may prohibit some projects from coming to fruition.

Kleinfelder, a 2,000-person science, architecture, and engineering firm in San Diego, has a significant backlog. Yet Bill Siegel, PE, president and chief executive officer, said that does not necessarily lead to profits.

“We have a lot of projects,” Siegel said. “It is just getting them started that is the issue.”

Although the backlog is full, “The amount of projects on hold or contracted but not allowed to start are a much, much higher percentage of the backlog,” Siegel added.

“We are concerned about the current volatility in the economy due to the federal government being incapable of actual decision-making, disrupting the current positive direction of the market,” Carney said. “The other side of it feels like the water behind the dam starting to release, with projects which have been slow developing finally moving forward, and new private work looking like it is coming back as well.”

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