Multi-skilled Specialty Contractors Land on Feet in Uncertain Market

By Tonie Auer

From the shelving or delay of projects to the high cost of oil driving up construction expenses, life isn't easy for contractors in today's economy.

Still, the successful companies are finding ways to survive by diversifying or just evolving to stay ahead of the competition.

Patriot Erectors of Dripping Springs worked on Sam Houston State University. The firm performs steel erection and fabrication, and ranked No. 67 in the list of top specialty contractors.

"Obviously, the overall economy has hurt, but we see the economy as a moving target," says Jim Renaud, vice president of Capform Inc. in Carrollton. "It will continue to have its ups and downs and we just try to be in the right area at the right time and be flexible."

For Capform, which ranked No. 13 on the list of top specialty contractors, diversification is key. With locations in Dallas, Austin and south and central Florida, personnel are moved from the offices that have slowed – like Florida – to Austin, which is still busy, Renaud says.

Capform, which provides reinforced concrete structures, has been busy working on the Dallas Cowboys stadium in Arlington, Fidelity headquarters phase two in Dallas, the Azure in Dallas and the Winspear Opera House in Dallas. Currently, the firm is working on the 60-story Austonian in Austin, St. Ann Court Office building in Dallas, Baylor Medical Office building in Plano and Granite Gables in Dallas.

Century Mechanical Contractors Inc. of Fort Worth, No. 54 on the top specialty contractors list, has found that its work with geothermal jobs has boosted its business.

"The move to geothermal started about 15 years ago, and with the way energy is, people are trying to build green and geo has really gotten popular," says Rod Campbell, president of Century. "No one was doing it back then and we'd only see one or two projects a year. Now, there are multiple opportunities and we select which ones fit our business profile, locations and schedule."

Century's business has grown in the past few years. Last year, the company had $27.8 million in sales. This year, it's anticipating doing $45 million.

JMEG provided electrical subcontracting services for the Long Center for the Performing Arts in Austin. Shown, the interior of the recently completed Michael & Susan Dell Hall, which seats 2,400.

"We've probably got in the $30s back-logged right now," Campbell said. "Our business is really growing and a lot of that has to do with the energy costs. People are looking to save money on their energy costs and there is a widespread desire to go green and that is a big part of it. Geo helps get you a lot of points on these LEED buildings; so that has broken loose for us."

Last year, Century's work included a mechanical and plumbing project for Andrews Women’s Hospital for Baylor All Saints in Fort Worth, a geothermal job for Brewer High School in the White Settlement ISD and a geothermal job for Liberty High School in Frisco ISD.

Current projects include two high schools in Frisco, one in Northwest ISD in the Trophy Club area and a new high school in Keller. Many of those are geothermal projects, Campbell says.

Ray Naizer, president/partner with electrical contracting firm JMEG LP in Carrollton, says the rising cost of oil is impacting not only the projects his firm is working on but is also causing issues for the workforce.

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"These costs have occurred too quickly for us to deal with effectively," Nazier says. "It is impacting the income our employees are bringing home and affecting our profitability. There is a lot of pricing pressure on projects that were bid and under contract and executed prior to the current high price of oil. So, we're trying to deal with the issue."

Speculative office buildings and hotels, in particular, seem to have slowed, Naizer says.

"Projects that were on the books have basically been delayed or pushed back to probably next year or shelved indefinitely in that market sector," he adds. "Anything that has to do with residential like high-rise condo projects that were on the books are all being pushed back. There continues to be a lot of opportunities coming down, though, so we try not to work in all market sectors."

For JEMG, No. 12 on the list, the focus has been in the education area. The projects the firm worked on recently include Brewer High School for White Settlement ISD, the central plant expansion for the University of Texas at San Antonio and several student housing projects at the University of North Texas and Dallas Theological Seminary.

Last year, JEMG had a $48 million project with Samsung Austin Semiconductor, as well as the fine arts performance facility The Long Center for the Performing Arts in Austin and the McNay Museum in San Antonio.

Currently the firm is working on the Dallas Cowboys stadium as well as several higher education projects, the new Blue Cross Blue Shield headquarters in Richardson and the Wyly Theatre in Dallas.

"We had a spike in our revenue last year with the Samsung project," Naizer says. "It was a large, fast-track project. We're on track for 2008 to do $130 million."

R.K. Bass Electric in Harker Heights, ranked No. 104, is also doing more education facilities, including an elementary school, field house and bus barn for Hutto Elementary, Killeen Middle School and Georgetown Elementary School.

Patriot Erectors provided services for the recently topped out St. Philips College Learning & Resource Center, Nursing & Allied Health, and One Stop Building in San Antonio, being built by Skanska.

"There are some owners that are pulling back projects, but a lot are still moving forward and we seem to be acquiring them through the bid process," says Andy Bass, vice president of operations for Bass. "We're getting into a lot of different areas, but schools are our bread and butter. We're still hiring to keep up with the work we're acquiring."

Bass also has done a lot of work on the State Highway 130 toll road in Austin as well as the 183 turnpike toll road. Additionally, the firm worked on the Lower Colorado River Authority Red Bud Center in Austin and the Bell County Annex and Sheriff office.

Fort Worth-based Walker Engineering Inc. in the No. 4 slot continues to garner success, too, with a niche for large, complex projects, says Dutch Wickes, company executive vice president.

"Our specialties of data centers and hospitals are the hot markets right now," Wickes adds. "They will continue to be so for the next 18 to 24 months. We're seeing more integrated project delivery by bringing the major subcontractors on early during the design. Our portion of the work is greater than normal, but we have more opportunities to help our clients get the highest value for the least amount of money."

Walker's projects last year, which totaled more than $240 million, included the Cisco Data Center in Richardson, Hillcrest Baptist Hospital in Waco, Dell Children's Hospital in Austin and The Methodist Sugar Land Hospital in the Houston suburb of Sugar Land.

This year's projects include the high-rise Austonian condos in Austin, the JW Marriott Resort in San Antonio and the Methodist West Medical Center in Houston.

R.K. Bass Electric did a lot of work on the State Highway 130 toll road in Austin as well as the 183 turnpike toll road, shown.

Brazos Masonry Inc. of Waco, ranking No. 64 on the list, is moving away from the hard-bid opportunities toward more negotiated projects, says Bradley Clay, executive director of business development.

"We can plan farther ahead and allocate our resources more accurately and profitably this way," he says.

Among Brazos Masonry's bigger projects currently are AMD Project Lone Star headquarters in Austin, Methodist Stone Oak Hospital and St. Phillips College LRC and One Stop in San Antonio, McLennan Community College classroom building in Waco and Los Corales Condominiums Resort in South Padre Island.

Patriot Erectors Inc. in Dripping Springs is "busy with current work on hand and prospective work being negotiated," says Rex Webb, one of the firm's owners. "We are adding project managers and recently added estimators to meet the demand we are experiencing. Also, we are making significant capital investment for our steel fabrication facility."

Among Patriot's bigger project last year were the UT Executive Education Conference Center in Austin, JW Marriott Resort in San Antonio, St. Phillips College LRC/One Stop Center for Health in San Antonio and multiple phases of projects at Fort Bliss in El Paso.

Currently, the firm, which ranked No. 66 in this year's top specialty contractors list, is working on the San Antonio International Airport Expansion.