In a recent article in the ABA’s “Under Construction” publication (link here) the author describes a trend among some major contractors, including SNC-Lavalin, Fluor Corporation and Granite Construction, to leave the DB and EPC space. Other large contractors have announced similar intentions. The problem appears to be that the DB and EPC delivery methods are returning losses – or at least not the anticipated profits – on recent projects. Whatever the actual cause of these losses may be, the recent trend is at odds with decades of prior trends in the opposite direction. Numerous articles and surveys revealed the desire of large owners and contractors alike to grow DB and EPC as the favored delivery method. While contractor appetite may be currently waning during a sellers’ market, most owners still desire these delivery methods because they create a single point of responsibility and lend themselves to better schedule and performance guarantees from the combined construction and design team. When the field of DB and EPC contractors shrinks, it will open up competitive opportunities from other contractors willing to take the risk with the possibility of greater reward.
