LAS VEGAS – As a global consulting firm over the last four decades, FTI Consulting has brought together experts to serve as trusted advisors. Collectively, FTI Consulting offers a suite of services to assist clients across the business cycle—from proactive risk management to crisis management.
Attendees at last week’s Construction Super Conference (CSC) in Las Vegas had a chance to chat with representatives from FTI at The Cosmopolitan in Las Vegas, getting a feel for the firm’s depth of knowledge. Alex McBride, managing director, Construction, Projects & Assets, took a break at CSC and sat down with Third Thursday to share more about the firm and how it can add value for clients.
Third Thursday: What types of projects have you been working on?
McBride: I’ve had the privilege of working on basically every single type of construction project, in North America and internationally. I am a registered professional engineer, as well as a planning and scheduling professional. Project management, project cost control, and project scheduling is what I live and breathe. I’ve worked on projects from the earliest phases of site selection to the more typical disputes, delays, trials, and arbitrations. My degree is actually in construction engineering which is civil engineering with an emphasis in estimating, scheduling, project management, and productivity phasing. These are a lot of the things that become really material when construction projects go off the rails. I’m trying to put dollars to issues.
Third Thursday: Any thoughts on the future of AI in your field?
McBride: The construction industry is a notorious laggard in the tech space and tends to lean more heavily on the human element beyond most of its competitive peers. We see productivity stagnation in construction where you just don’t get those kinds of leveling improvements that you see in manufacturing spaces or most tech-heavy spaces. I think AI is going to be extremely useful because of the way it allows people to create custom programs or solutions without needing a software background.
Third Thursday: Any specific examples?
McBride: The number of AI offerings in the dispute space will help accelerate what can be the most tedious parts—specifically discovery and document review. That seems to be here. I think of the self-driving cars in San Francisco where people are still thinking it’s a thing that’s coming in the future and forgetting that it has actually already happened. I do wonder if a couple years from now, disputes will just have AI fully integrated and you’ll have to stop and look around and realize it’s happened without you being able to tell. It’s a little bit like your kids getting taller right in front of you, but it doesn’t ever occur to you until you look back on a picture and get to see it.
Third Thursday: How has FTI been involved in the financial ecosystems of clients?
McBride: Our corporate finance group helps with mega projects that are experiencing severe financing issues. FTI’s ability to bring construction specialty knowledge into the broader financial ecosystem is useful because it becomes a sort of virtuous cycle.
Our team has really talented individuals such as Nick Fernandez and Navid Ariaban providing capital advisory and project controls services, or Steve Morris who works in asset life cycle management that really bring a depth of knowledge. So you get the ability to not only help clients who are potentially going through massive capital expenditures, but we make sure they hit the ground running with an asset that works for them on the other side of it.
Third Thursday: What are the risks of an incorrect financing assessment?
McBride: If you don’t have the ability to actually figure out what your worst case scenario is, and what the financing looks like on the project, you stand the risk of being halfway done and realizing you no longer have a viable outcome. I’ve been working on projects from the pandemic and on now, where there is still so much of a hangover from a construction ecosystem that is just broadly 30 percent more expensive than it was six years ago. You’re seeing it in business assumptions that are not panning out, but are on long timelines. It’s a bit of a slow burn until you realize you’re on the wrong side of a capital overrun. I’m seeing projects that find themselves extended, and all of a sudden owners are paying for things they typically never would have had to because what went from being an assumed three percent escalation is now a nine percent, and then 10 percent escalation over a two-year window. That’s going to be with us for a little while until that new normal fully settles in. I’m seeing where owners and contractors are at odds in terms of the dollar amount they have in their head for how much something costs.
Third Thursday: What do you hope to be working on in the new year?
Alex McBride: I hope I will be helping a handful of electrical component manufacturers open a series of new switchgear manufacturing facilities in the United States. Out of all the things in the pandemic, such as long lead time items, that’s the one sector that’s never recovered—specifically switch gears and transformers. We’re at something like 50 consecutive months of shortage in electrical equipment. I have been waiting to see the market respond with new fabrication capabilities so we can finally get that pinch point removed. I would love to see that as part of some of the on-shoring and a renewed focus on U.S. manufacturing capability. If we see some growth in those spaces, we can get rid of those last few lingering supply chain impacts.
Alex McBride is a managing director in FTI Consulting’s Construction, Projects & Assets segment. McBride has more than 12 years experience providing project advisory services, forensic damages, and delay analyses related to construction across multiple industries. His client portfolio includes govt entities, manufacturers, tribal entities, contractors, subcontractors, joint ventures, government contractors, architects, and engineers.
