Selling an engineering or architecture firm

Part of the demand is public money. The Infrastructure Investment and Jobs Act put more than $50 billion into water infrastructure, which EPA calls the largest such investment in US history, plus $5.4 billion for Superfund and brownfield cleanup and recycling¹. Design firms do the work that comes first.

People are the other constraint. The Bureau of Labor Statistics projects about 22,700 openings for civil engineers a year through 2035, many to replace people who retire or leave, and notes that engineers who serve the public usually need a state license². People over 65 made up 14% of licensed architects in 2025, and NCARB expects the total to shrink as baby boomers retire³. Buying a firm is often the fastest way to add licensed staff.

The field is also crowded. Kansas City alone has more than 1,200 architecture, engineering and construction firms, according to KC Global Design, a regional industry group, in Pape-Dawson's March 2026 release on buying BHC, a local engineering and surveying firm¹⁰. Consolidators are working through it. Certerra, an OceanSound Partners portfolio company focused on testing and geotechnical work, called its August 2026 purchase of Skyrise Engineering and Testing its fifth deal of the year⁸. Wold Architects & Engineers bought Klein McCarthy Architects in September 2026, its third of the year⁹.

A platform buyer needs leaders and systems that can absorb more firms; an add-on buyer cares most about your clients, licensed staff and offices. Expect to hear from:

• Private equity platforms adding firms by region or discipline. Traffic & Mobility Consultants, backed by Grovecourt Capital Partners, bought CTSi, a Jacksonville traffic engineering firm, in May 2026¹².
• Private equity firms starting a platform, as Godspeed Capital did with Engineering Resource Group, a Mississippi MEP firm, in January 2026⁷.
• Large national firms. Ardurra, with more than 2,600 employees, bought Kelly Engineers, a municipal engineering and surveying firm near Philadelphia, in June 2026¹¹. Stantec, a public company, bought Page Southerland Page, a Washington, DC firm with about 1,400 employees, in July 2025⁴.
• Investors buying at scale. Bernhard Capital Partners agreed in August 2026 to take Bowman Consulting, a public engineering firm that has grown partly through acquisitions, private at an enterprise value of about $1.0 billion⁵.
• Minority investors. In March 2026, Main Street Capital invested $28.0 million, in debt and minority equity, in the recapitalization of a Southeastern architecture, engineering and land planning firm¹⁴.
• Your own people, through a sale to partners or an employee stock ownership plan.

A buyer is paying for future work and the people who will do it. Stantec reported C$9.0 billion of contract backlog at the end of March 2026, about 13 months of work, and said the firms it bought in 2025 added C$192.9 million of client relationships and C$61.5 million of contract backlog to its balance sheet as intangible assets⁴.

Backlog quality matters as much as size. A signed contract counts for more than a shortlist, and an on-call agreement is worth what it has actually produced, not its ceiling. Buyers will ask how much is fixed fee and how much depends on one principal.

Repeat clients come next, and buyers will check whether those clients hire the firm or one person. When Traffic & Mobility Consultants bought CTSi, it cited CTSi's ties to FDOT District 2, counties and cities as part of the fit¹². Expect requests for:

• Backlog by contract and client, with fee type and expected burn, tied to past billings.
• Five years of revenue by client, public and private.
• Utilization: billable hours as a share of total hours, by person and office.
• Net multiplier: net revenue divided by direct labor cost, for fixed-fee and hourly work.
• Margins by service line, such as civil, structural, MEP, geotechnical, survey and architecture.
• A staff roster with licenses by state and tenure.
• Win rates on proposals and qualifications.
• Overhead rates for state DOT work. On federal-aid highway contracts, indirect cost rates, salary rates and fixed fee are set as separate contract elements²¹.

Engineers, surveyors and architects are licensed as individuals, but states also regulate firms: who may own them, who must be on staff and what happens when a key licensee leaves.

New York sets tight limits. Every business entity offering engineering there needs a certificate of authorization¹⁶. In a professional service corporation, every shareholder, officer and director must hold a New York license, and every member of a professional LLC must be licensed in New York¹⁶. A design professional service corporation formed in 2012 or later may have outside owners, but they must hold less than 25% of the shares and of the director and officer seats, and the president, board chair and chief executive must be design professionals¹⁶. A business corporation allowed to practice engineering in another state does not gain that right in New York¹⁶.

Florida takes a different approach. A business offering engineering must be qualified by a licensed engineer who serves as its qualifying agent, and at least one principal officer must be licensed¹⁷. If the only qualifying agent leaves, the firm generally has 60 days to qualify another and may not practice engineering until it does, apart from a temporary allowance to finish existing contracts¹⁷. Architecture firms face a similar rule¹⁸.

Texas requires every business entity practicing engineering to register with its board. All engineering work must be done or directly supervised by a Texas-licensed engineer who is a regular, full-time employee of the firm, and each office needs an engineer in responsible charge¹⁹.

Ask early whether the buyer's structure can own a firm in each state where you work, and who will qualify it after closing. This guide describes what the rules say, not how they apply to you, so check with each state board and your own counsel.

Most public design work is not bid on price. Under the federal Brooks Act, agencies announce their needs for architect and engineer services and negotiate contracts based on demonstrated competence and qualifications, at a fair and reasonable price²⁰. The factors include professional qualifications, specialized experience, capacity and past performance, and the agency negotiates with its top-ranked firm first²⁰.

State and local work often follows similar rules. Engineering and design contracts on federal-aid highway projects generally must use qualifications-based selection, and price may not be used to evaluate, rank or select firms²¹. For larger projects, Florida's Consultants' Competitive Negotiation Act has agencies certify that a firm is qualified, weighing the ability of its professional staff, past performance and current workload, and negotiate with the most qualified firm first²².

That matters in a sale because you won the work with named people. If they leave after closing, the next shortlist is harder to make.

The form of the deal also matters. Federal law bars transferring a government contract to a third party, so after an asset sale the government must agree to recognize the buyer as successor, usually through a novation agreement²³. When stock is bought and the same company keeps performing, a novation is generally not needed²³.

Small business status can change at closing. A firm holding small business awards must recertify its size within 30 calendar days of a merger or acquisition that changes its controlling interest²⁴. If the buyer is not small, the firm can lose access to new set-aside orders under some multiple-award contracts, and agencies can no longer count its awards toward small business goals²⁴. If much of your federal work is set aside, model that first.

Few of these end a deal alone. More often they lower the price, move more of it into an earnout or lengthen your transition. The common ones:

• Owner-held licenses and relationships. If you qualify the firm and every client calls you, the buyer is mostly buying you.
• One large client or agency. A single DOT district, school district or developer supplying a big share of fees can vanish with one lost shortlist.
• Fixed-fee overruns, unbilled work and unapproved change orders, which all surface in diligence.
• Professional liability claims. Open claims or thin coverage worry buyers, and liability can follow people. In Florida, working through a firm does not shield an engineer from his or her own negligence, and the architect who seals documents is liable for them, with limited exceptions¹⁷¹⁸.
• A thin bench: too few licensed staff in a discipline or state, or principals all nearing retirement.
• Weak project controls: no reliable view of hours and budgets by project.
• Overhead rates that no agency has reviewed, or that your books cannot support.

Most of the price is usually paid in cash at closing. The rest tends to ride on whether clients and key people stay.

Rollover equity is common. Tecton Architects' principals invested in Agathos AEC, the Hunter Forest Capital platform that bought the Hartford firm in August 2026, and Engineering Resource Group's principals kept meaningful ownership when Godspeed invested¹³⁷. A rollover shares in a later sale, but it is usually a minority stake you do not control.

Principals are usually asked to stay. Skyrise's founders remained to lead growth in South Florida, and CTSi's founder kept a leadership role⁸¹². When CIVC Partners partnered with Cushing Terrell, an 88-year-old Montana design firm, in September 2026, the firm's own leadership kept running daily operations⁶. Expect employment agreements and retention bonuses for key staff.

Names are handled both ways. Tecton kept its name, and Cushing Terrell stayed the platform with its brand intact¹³⁶. Innerlight Engineering joined Pape-Dawson in October 2025 and took the Pape-Dawson name a year later¹⁵. Get the plan in the letter of intent. Other terms you may see:

• Earnouts tied to revenue, margin or backlog over a set period. Define how staff departures, lost pursuits and the buyer's own decisions count.
• Minority sales, where an investor takes a stake and you keep running the firm, as in the Main Street Capital deal¹⁴.
• A sale to employees through an ESOP, a qualified retirement plan built to invest mainly in the company's own stock²⁵. It can keep the firm independent, though the price may be paid over time.
• Holdbacks or escrows for liability claims, unbilled work or overruns found after closing.
• Tail coverage on your professional liability policy, so claims about work done before the sale stay covered. Ask your broker early.

The goal is to show that your backlog is real, your clients are loyal to the firm and your licensed people will stay. Most of these steps also make the firm easier to run:

• Build a backlog schedule by contract and client, with fee type, remaining value and expected burn, tied to past billings.
• Track utilization, net multiplier and project margins monthly, by office and service line.
• Map every individual license, firm certificate and registration by state, and note who qualifies the firm in each.
• Prepare a second licensed person wherever you are the only qualifying agent or engineer in responsible charge.
• Put project managers in front of your largest agencies and repeat clients.
• Review your professional liability policy and claim history with your broker, and close out what you can.
• Clean up project accounting: bill work in progress, settle stalled change orders and write down jobs that will not recover.
• List every on-call and public contract with its term, ceiling, key personnel terms and any small business status it relies on.
• Have your overhead rate reviewed if you work for state DOTs or federal agencies.
• Decide what you want: price, role, timing, rollover, and what happens to your name and your people.