Complex projects prompt more architecture firms to form strategic partnerships

With smaller architecture firms often unable to compete for big-ticket contracts, one local firm is joining forces with a longtime partner to gain a competitive edge over multinational companies.

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With smaller architecture firms often unable to compete for big-ticket contracts, one local firm is joining forces with a longtime partner to gain a competitive edge over multinational companies. It’s a trend that could become more common in the profession as projects become larger and more complex, industry watchers say. For nearly two decades, Ottawa-based Watson MacEwen Teramura Architects (WMTA) has worked with mcCallumSather, which was founded in Hamilton and now operates an office in the capital. Earlier this month, the two firms announced a formal strategic partnership that will allow them to share expertise and pursue larger, more complex projects. “Now it’s at a point where, in order to be competitive, we need to have a little more robustness,” Drew Hauser, architect and board chair at mcCallumSather, told OBJ. “It used to be that a large project was $100 million and now a large project is a billion dollars. It’s like, holy smokes. And with the complexity, many of them don’t have a precedent. The Canadian government, in some cases, might really feel they have to look abroad.” Large U.S. firms tend to dominate the Canadian architecture landscape, winning more major contracts over Canadian SMEs, said Allan Teramura, architect and partner at WMTA. “The largest firms in Canada at the moment are all based in the United States,” he said. “It wasn’t an invasion of architects coming across the border, it was them acquiring local firms, for the most part. But the reality is that the profits and the knowledge and the credentials and the experience end up going to a firm that has its head office somewhere in the States.” McCallumSather, a 30‑year‑old firm founded on sustainable design with in‑house mechanical engineering, has a national portfolio that includes mass timber, affordable housing and lab facility projects. WMTA, meanwhile, has prioritized projects that require specialized expertise for the public sector, heritage and research facilities. It has also broken into the defence sector, where its security credentials have been a major asset. The firms first worked together on a municipal water quality lab in Hamilton, said Hauser, and the relationship developed from there. “We were starting to win some government work but, in all honesty, everything that we were winning, we'd be like, ‘Hi Allan, hi (partner Rick MacEwen), what do we do? How do we do this?’” said Hauser. “They were very helpful in helping us navigate that. Now with that alignment, it just allows us to be much more effective.” The formalized partnership gives each firm a partial ownership stake in the other, allowing them to share knowledge and expertise more easily. For the time being, the firms will continue operating under their own names. “I guess we’re trying to form a kind of resistance, to build a homegrown entity that can compete with these huge firms that have thousands of employees,” said Teramura. “That’s part of the strategy, I think, in surviving in this market.”

Partnerships may become more common

As projects become more expensive and complex, local architect Andrew Reeves, owner of Linebox Studios, said small firms often struggle to secure contracts, usually because they can’t meet qualification requirements that he calls unrealistic. “Say they’re doing a school,” he said. “You cannot qualify unless you’ve done 10 prior schools. So a firm like Linebox will never qualify for 90 per cent of the stuff out there, because we haven’t done 10. Guess what? There’s only like three firms that have.” Reeves said it's a problem that exists across the board, including at the municipal and federal levels. Only a few Canadian cities, such as Edmonton, use a different approach that gives small firms a fighting chance, he said. “They have a value-based procurement process,” he said. “What they’ve done for procurement — and it’s not just architecture — is they allow for the opportunity to prove your value in a particular project. If they’re doing a school, they'll shortlist (qualifying firms) and give them a small amount of money so they can come up with what they feel is the best solution for this particular process. Then they’ll pick not necessarily based on the lowest fee, but on the actual value.” Toon Dreessen, president of Architects DCA in Ottawa, has long criticized the current procurement process. Though he said he understands the buyer perspective of wanting competence and deep expertise, he said the criteria can become unnecessarily convoluted and challenging. “If you’ve got to demonstrate that you’ve done three buildings of $50 million or more in the last five years and you’ve won a Governor General’s Award in architecture, well, how many firms have that?” he said. “It becomes such a tight criteria that it’s really hard for small to medium-sized firms to compete.” For that reason, Dreessen said partnerships like the one between mcCallumSather and WMTA could become more common. “I think you’ll start to see the 10- to 30-person firms either disappear, as many have over the years, or starting to form partnerships and relationships with each other,” he said. “At Architects DCA, we have two or three partners we work with regularly and that gives us added capacity.” But in order for small firms to truly stand a chance, he said procurement policies need to change. That could be an SME policy to better engage boutique firms on federal contracts, or a design competition model that prioritizes the best designs. “Here I am, a little architecture firm out of Ottawa, and we have contracts in Newfoundland, B.C., Quebec, Toronto, Kingston,” he said. “We have all of these contracts because we compete at a fair level. We compete with the big guys and we win.”

Complex projects prompt more architecture firms to form strategic partnerships

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