METRO spoke with several consultants to discuss the impacts of COVID-19 on the industry, how they are helping transit through this difficult time, and more in the June issue. We are running the unedited versions in multiple parts here online. This is part one.
Sr. Associate/California Transit Director
Lockwood, Andrews & Newnam Inc. (LAN)
How has LAN responded to the coronavirus pandemic, both internally and with your clients?
Many of our clients are in the midst of either expansions or state of good repair projects. These projects and our clients in many cases are considered essential businesses, so LAN has continued to provide the same level of responsiveness and support during this trying time. Our employees providing construction management support have continued to do so. We are working with our clients and contractors to plan work activities with social distancing practices in mind. We have implemented wellness checks with our client and contractor partners making sure employees who may feel ill stay home. For management and design work, we have been successful with a Work-From-Home program. Using technology such as Teams, WebEx, and other virtual tools, we are continuing to meet and collaborate with clients.
As far as project delivery, what new trends are you seeing take place in the U.S. and Canada?
Transit properties are looking at different ways to deliver their projects. In our opinion, there are various methods to address varying needs of our clients. The traditional Design-Bid-Build remains a viable delivery model, depending on the size, complexity, and needs of the transit property and the community it serves.
Design-Build has now been used for many years both in vertical and horizontal construction including transit and transportation projects. Design-Build can offer several benefits provided the contractor and designer truly work as a team. These benefits include an expedited delivery, the creation of a single contractual point of contact for the client, and improved and more open communication and collaboration between the engineer, its subconsultants, the contractor, its subcontractors, and the client. Again, a critical element in any successful design-build is effective teamwork between the engineer and contractor. It is also critical that the client-owner be sophisticated and experienced with the design-build method, or engage representatives that can help the client-owner navigate the complicated nuances of this delivery method.
A trend we see gaining momentum is the use of Progressive Design Build and Construction Manager/General Contractor (CM/GC), also more commonly known as Construction Management at Risk (CMAR). The CM/GC method allows the client-owner to maintain control over the design yet receive the benefit of the contractors input into the design. CM/GC engages a contractor in a two-step process, bringing the contractor on board for pre-construction services to review, value-engineer, and provide feedback on the design prior to providing anestimate for the construction of the project. CM/GC works well for projects witha highdegree of complexity, staging and maintaining either the rail or bus service while the expansion or retrofit is being implemented.
Do you feel the U.S. is catching up with forms of alternative project deliveries? Why or why not?
That is a hard question to answer because it is extremely difficult to compare alternate delivery in the United States with the rest of the world. The U.S. has been using alternate delivery as long as any other country, but, in our opinion, the evolution of alternative delivery in the U.S. has been impacted by a unique set of influencing factors, including an extremely nuanced set of inconsistent laws within each state, a construction industry that continues to become more litigious and contentious, and insurance or surety products that weren’t necessarily created to address these factors.
In addition, the U.S. has a client base with a wide range of experience in alternative delivery. Some clients are sophisticated and able to manage complicated deliveries such as Engineer-Procure-Construct (EPC) or Engineer-Procure-Construction Management (EPCM) using a cost-plus fee model. While other clients, after learning of the many benefits of design-build, attempt design-build for the first-time using design-bid-build bidding processes or contractual documents. In short, I would say that alternative delivery in the U.S. is quickly evolving and we are seeing more and more alternative delivery projects with our clients.
How might this pandemic impact the way projects are designed and delivered moving forward?
Yes, we believe the pandemic will impact project delivery, directly and indirectly. The reasons include ability for all parties to interact with others, access to sites, limitations arising from provision of services remotely, responsiveness of parties, and more. My firm has been fortunate. Prior to the pandemic, we had already established the necessary technology infrastructure to continue working from any location. Unfortunately, however, not everyone has the ability to seamlessly work from any location. In addition, public projects require public hearings that may be delayed because of the pandemic.
As far corporate goes, do you feel work from home will be a trend that continues after COVID-19 by LAN?
For some time, LAN has been moving to a more distributed, more flexible work environment. As new tools have become available to support this direction, LAN has adopted and embraced them. Because of this, we have been able to successfully move our entire workforce to a telework model to keep them safe and healthy. In the future, we do expect to continue moving toward a hybrid of traditional offices and telework employees. The strength of this model is that it allows us to put the best people on a team regardless of their physical location, and with as little disruption as possible for the employee. The benefit to the client is that we can provide them with teams tailored specifically to their project or program needs.
Sr. VP, Transportation Strategy, Growth, and Key Accounts, Design and Consulting Services Americas business
Prior to the pandemic, what do you feel were public transit’s biggest issues other than funding?
Funding aside, the number one issue that was impacting transit systems prior to the COVID-19 pandemic was the severe declines in system ridership. A great deal of research has shown various reasons for the declines, to include the impacts of teleworking, increased car ownership and the impact of transportation network companies, to name a few. Ridership growth initiatives were being implemented along with the introduction of new service delivery models such as micro transit and public/private partnerships with TNC’s to address first and last mile challenges.
Another challenge, which is right up there with ridership declines, is the impact of an aging workforce. More than ever, transit agencies are challenged with not only retaining talent, but also with knowledge transfer, which is not happening quickly enough due to the large number of transit professionals that are approaching retirement. This has been a perennial issue for some time now, but it is reaching crisis levels now, pre-COVID. In conjunction with that, identifying and attracting talent, with a competitive salary are major factors during this war for talent. So, holistically, we have this issue with talent and an aging workforce, and then right after that, maybe neck and neck, is our aging infrastructure. Of course, that often ties back to funding. Right now, we are seeing a fluctuation in the way agencies are funded. And, one of the things that we are going to see post-pandemic, is with the way funding is provided for some agencies, who rely on funding sources l such as sales and gas taxes. Those funds, which already fluctuated pre-COVID, are now really going to fluctuate even more as so many of us are not driving or shopping as we normally would.
As part of this interview it is difficult not to address the lack of consistency in the way transportation or transit is funded in the United States is problematic. Other models outside of the country, such as in Europe or Asia, have private and public funding models, or they just have a very different and dedicated funding streams. We do not have a dedicated funding stream for many of our transit authorities, so it's hard for them to do long-term planning because you can only go year-to-year based on what you get approved for each year. I have spent a lot of time in the last few years focused on policy and spending time on the Hill, which pulled me away from some of the normal activities of my job. During that time, I really focused on how we can help legislators understand what is happening at the state and local levels, so that they can incentivize collaboration or find ways to help states and localities take better advantage of the funding available. A related concern is a steady declining in overall ridership. Transit agencies throughout the nation have begun experiencing a decline in ridership across all modes.
I will end with saying, safety, which I probably should have been stated upfront. Keeping transit safe is key, and it will be even more so post-COVID.
Workforce development is big for AECOM, and the industry in general, how do you think it may be impacted as we continue to all work from home?
It is certainly something we all must consider. The benefits are that for this generation, technology is something that comes natural to them. They are using apps for everything, including payment — you would be hard-pressed to find cash on my kids or on this generation or the coming generation. This generation is also well-versed in virtual learning. I serve on the Jacksonville University Board of Trustees, as well, and studies are showing face-to-face social interaction cannot be substituted with a virtual connection. Students are needing to still have that social aspect. So, with workforce development, the tools and training we have can clearly continue, which is important for AECOM. In our offices right now, though, we are looking at ways to create those face-to-face interactions and are doing that through virtual happy hours and coffees. We are also suggesting those to our clients and using them to not just talk about a project or the delivery of work only, but just to check in with them as people, because well-being is important. Those virtual meetings also give us a chance to continue mentoring. Microsoft Teams has been great for us to not only communicate, but also maintain that eye-to-eye contact.
How is your firm working with clients during this difficult time?
I have to say, I am very proud of AECOM’s efforts and the way we were able to go virtual almost overnight. Because we were able to do that rapidly, we began to quickly turn our focus to how we could support our customers with business continuity efforts. We mobilized around that and developed a plan for reaching out to our customers just to check to see if we could help them in any way. Obviously, their initial needs were to figure out how to keep business going in an environment they have never operated in before, so we quickly assembled to focus on getting them back to business. AECOM has customers in multiple business lines, so we were able to provide thought leadership to our customers around how exactly to get back to business, safely. Obviously, some of those measures included social distancing and using technology to communicate with both employees and passengers.
We also have a tool called Mobilytics that we have offered to transit agencies and Return to Service (R2S) strategies for re-occupancy, site safety, rail, aviation, healthcare, higher Ed, and ports and marines. These tools are used to develop scenarios using travel pattern data. It is really a predictability tool that looks at ‘what if’ scenarios based on the usage of buses and trains. We have also engaged across all our business lines that we support and looked at the CARES Act, to ensure that they have assistance with grants, applications, or whatever they need in the way of securing funding. We have experts with experience in responding to grants, so we have focused heavily on that by helping our clients understand the different funding opportunities that are available to them.
From an economic stimulus perspective, as we wait with fingers crossed for hopefully another wave of that, we looked both internally and with our customers at projects that could be ‘shovel ready,’ as we used in the Obama era as part of the American Recovery and Reinvestment Act of 2009 (ARRA). We are assessing the list of capital projects that we felt could meet the criteria of shovel-ready within six to twelve months and, most importantly, put people back to work. So we have spent a lot of time looking at that type of stimulus-ready projects and shared those with customers. Many of our clients found it very valuable and asked us to do further research on that, and in some cases, projects moved back while others moved forward. We will also continue to keep our eye on the ultimate longer-term at the transportation infrastructure bill funding that is much needed.
How do you feel projects will be impacted post-COVID?
The answer is, it varies depending on the agency or the region. There are certainly opportunities for capital projects to move full steam ahead and you can do that by looking at alternate delivery models, public-private partnerships, and design-build, which are all procurement methods AECOM has vast amounts of experience in and would allow a quicker speed to construction delivery. We are seeing cases where that is indeed being explored, or those where those methods were in play already and are just moving forward. There are also some instances where projects have been completely put on hold. Some of those holds have to do with the ability to meet state and local matches. There's a little bit of a pause, in some instances, for agencies, who have to rethink what that match will be and whether or not they've got the money to meet it if it's going to come out of a capital program. It has really been on a case by case basis. We have been pleased, overall, as some of our clients move ahead with several projects and we have even gotten contract awards during this time.
Do you feel that the CARES Act is a positive sign moving forward as we move toward the surface transportation bill?
I think it helps not hurts, because we are going to have to talk about the fourth wave now and the differing opinions of whether it is needed. Clearly, it is needed based on how much ridership is down. I was on a call with a client the other day, and they are saying they are down by 95%. We are seeing many agencies, overall, running weekend or holiday schedules, because of reduced ridership levels. And then of course, they are going to be concerned about their ability moving forward to adhere to CDC guidelines around social distancing. They are going to have to figure out how to provide services in ways they have not provided them before. Because of all this, I think we clearly need additional funding like the CARES Act for small and large businesses so employees can get back to work. But, the longevity and sustainability of the workforce in our industry is going to have to come from a longer-term solution, and that solution is the transportation infrastructure bill.