Apple boots contractor Skanska from Campus 2 project - report [u]

Posted:
in General Discussion edited June 2015
Swedish contractor Skanska AB will reportedly not be allowed to continue working on Apple's multi-billion dollar "spaceship" campus once its current projects are completed, a move that could be related to rising costs and delays in construction.




Update: Skanska has issued the following statement:
Skanska and its joint venture partner were not able to come to an agreement with the client during negotiations for the revised scope of work. Accordingly, the client has elected to terminate the contract for its own convenience. As a result, Skanska USA Building will reduce the order bookings for a total of about USD 800 M, about SEK 6.7 billion, in the second quarter 2015.
Apple's decision not to engage Skanska for Campus 2 completion could cost the builders some $800 million in lost revenue, according to Swedish real estate magazine Fastighetsv?rlden. Skanska's U.S. unit won the job as part of a joint venture with California-baed DPR Construction, and it's not clear how this decision affects DPR.

Last month, Apple signed DPR competitors Rudolph & Sletten to complete Campus 2's interior build-out. It's likely that the canceled Skanska contract is directly related to Rudolph & Sletten's engagement, as Skanska will focus on completion of the core and shell of the new buildings.

When Apple first announced plans for its new corporate campus, the project was expected to cost some $3 billion and be ready for occupation in 2015. The cost has since ballooned to $5 billion, and the deadline for completion pushed to 2016.

The new campus --?which has yet to be named --?was personally unveiled by late Apple cofounder Steve Jobs. When complete, it will house more than 12,000 Apple employees who will be able to take advantage of numerous perks, including a massive cafeteria, expansive walking trails, and a $74 million fitness center.
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Comments

  • Reply 1 of 36
    mubailimubaili Posts: 407member
    Apple made a mistake; they trust Chinese companies and people to make their most important product; they should turn to Chinese company and people to build their most campus as well.
  • Reply 2 of 36
    mac_dogmac_dog Posts: 708member
    ouch.
  • Reply 3 of 36
    Skanska is not being booted from anything. It was never engaged to do the interior work.

    This is like saying "Your electrician got booted from the project and is being replaced by the painter".
  • Reply 4 of 36
    jungmarkjungmark Posts: 6,719member
    Well of course there are delays, it's hard to build Swedish products with just Allan wrenches and picture diagrams.
  • Reply 5 of 36
    john.bjohn.b Posts: 2,722member
    Quote:

    Originally Posted by mubaili View Post



    Apple made a mistake; they trust Chinese companies and people to make their most important product; they should turn to Chinese company and people to build their most campus as well.

     

    Report: Chinese company faulted on bridge project - Yahoo News

     

    :err:

  • Reply 6 of 36
    linkmanlinkman Posts: 936member
    $5 billion and it still won't be big enough...
  • Reply 7 of 36
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by AppleInsider View Post



    Apple's decision not to engage Skanska for Campus 2 completion could cost the builders some $800 million in lost revenue, according to Swedish real estate magazine Fastighetsvärlden

    By the way that magazine has since taken down that page.

  • Reply 8 of 36
    konqerrorkonqerror Posts: 685member
    Quote:
    Originally Posted by shadow700 View Post



    Skanska is not being booted from anything. It was never engaged to do the interior work.



    This is like saying "Your electrician got booted from the project and is being replaced by the painter".

     

    No. Skanska is a construction firm. They're not an electrician but a general contractor.

     

    Official press release makes clear that the contract was cancelled. It was an order that was already booked.

    http://group.skanska.com/media/125664/Skanska-contract-cancelled-for-facility-in-USA-worth-USD-800-M-about-SEK-6-7-billion

  • Reply 9 of 36
    mubaili wrote: »
    Apple made a mistake; they trust Chinese companies and people to make their most important product; they should turn to Chinese company and people to build their most campus as well.

    Would that be like all the stuff they built for the 2008 Olympics that crumbled a few years later?
  • Reply 10 of 36
    Quote:
    Originally Posted by konqerror View Post

     

     

    No. Skanska is a construction firm. They're not an electrician but a general contractor.

     

    Official press release makes clear that the contract was cancelled. It was an order that was already booked.

    http://group.skanska.com/media/125664/Skanska-contract-cancelled-for-facility-in-USA-worth-USD-800-M-about-SEK-6-7-billion




    Wow. I didn't realize they booked the revenue. Word on the street in the construction world since early on was clear that fit-out was going to be done by someone else. I guess someone forgot to tell Accounting.

  • Reply 11 of 36
    konqerror wrote: »
    No. Skanska is a construction firm. They're not an electrician but a general contractor.

    Official press release makes clear that the contract was cancelled. It was an order that was already booked.
    http://group.skanska.com/media/125664/Skanska-contract-cancelled-for-facility-in-USA-worth-USD-800-M-about-SEK-6-7-billion

    It could also mean that Apple wanted to change the initial scope, and not go through with the original contract because of the need for expansion.. And while in the negotiations to change the original scope, they weren't able to come to an agreement. So, they may not have been fired, per se, because of delays and rising costs.
  • Reply 12 of 36
    They should call it

    Spaceship 0

    in honor of Steve Jobs.
  • Reply 13 of 36
    jfc1138jfc1138 Posts: 3,090member
    Quote:

    Originally Posted by shadow700 View Post

     



    Wow. I didn't realize they booked the revenue. Word on the street in the construction world since early on was clear that fit-out was going to be done by someone else. I guess someone forgot to tell Accounting.




    "

    Skanska and its joint venture partner were not able to come to an agreement with

    the client during negotiations for the revised scope of work. Accordingly, the client

    has elected to terminate the contract for its own convenience. As a result, Skanska

    USA Building will reduce the order bookings for a total of about USD 800 M, about

    SEK 6.7 billion, in the second quarter 2015."

     

    That looks less like "booking the revenue" and more like listing the anticipated future order booking. That has an impact on future estimated. anticipated, revenue, but not on actual booked revenue.

  • Reply 14 of 36
    slurpyslurpy Posts: 5,196member

    I love these reports, which are basically desperate to create controversy by including half-truths. This happens all the time in construction products. I trust Apple knows what the **** its doing and is making the best decisions for the specific situation. Also, I doubt any company would voluntarily end a contract with Apple. That pretty much would never happen. 

  • Reply 15 of 36
    My sense is if you want to work for Apple, you'd better be at the top of your game.
  • Reply 16 of 36
    isteelersisteelers Posts: 738member
    mubaili wrote: »
    Apple made a mistake; they trust Chinese companies and people to make their most important product; they should turn to Chinese company and people to build their most campus as well.

    Just don't let them provide any drywall.
  • Reply 17 of 36
    mstonemstone Posts: 11,510member
    Quote:

    Originally Posted by Slurpy View Post

     

    This happens all the time in construction products. 


    That's how these general contractors make the big bucks. On a project that size the addendum sheets probably fill up a 40 ft. trailer. Every single change in the plan has an associated charge. They lowball the original quote and make it up in changes.

  • Reply 18 of 36
    ericthehalfbeeericthehalfbee Posts: 4,107member
    Considering the widespread corruption in the construction industry, this doesn't surprise me. Perhaps they just aren't used to dealing with Apple, run by Tim Cook - the master of supply chains and organization, and thought they could continue with their usual nickel & diming on charges without anyone taking notice.

    Seriously, it must be an eye opener for people used to doing business a certain way and running into Apple and their way of doing things.
  • Reply 19 of 36
    john.bjohn.b Posts: 2,722member
    Quote:
    Originally Posted by Slurpy View Post

     

    I love these reports, which are basically desperate to create controversy by including half-truths. This happens all the time in construction products. I trust Apple knows what the **** its doing and is making the best decisions for the specific situation. Also, I doubt any company would voluntarily end a contract with Apple. That pretty much would never happen. 


     

    Never?

  • Reply 20 of 36
    cpsrocpsro Posts: 2,518member

    Average $400+K per employee workspace. Yikes! :wow:

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