Apple boots contractor Skanska from Campus 2 project - report [u]
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:
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.
Update: Skanska has issued the following statement:
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.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.
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.
Comments
This is like saying "Your electrician got booted from the project and is being replaced by the painter".
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
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.
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
Would that be like all the stuff they built for the 2008 Olympics that crumbled a few years later?
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.
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.
Spaceship 0
in honor of Steve Jobs.
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.
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.
Just don't let them provide any drywall.
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.
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.
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?
Average $400+K per employee workspace. Yikes!