Great Companies Spotlight: Construction
Construction takes the cooperation of teams of professionals.
Photo courtesy Devon Energy.
Each building that occupies the Oklahoma landscape is the result of a well-choreographed interplay of architects, engineers and construction companies. These key players in Oklahoma’s construction industry engage hundreds of subcontracting companies and thousands of employees in projects across the state.
The construction of the Devon Energy Corporation World Headquarters alone will require the involvement of several thousand people in its three-year rise to the top of Oklahoma City’s skyline. At completion the tower will stand 850 feet tall with 50 stories and incur a construction bill of $750 million.
More common, though, are projects in the $15 to $50 million-dollar range, like schools, healthcare facilities and banks. On average, each of these projects trickles down from architect, engineer and construction company to benefit 30 subcontracting companies and put about 400 people to work.
“The construction process can be described as a three-leg stool,” says Dave Kollmann, Tulsa division president of Flintco Constructive Solutions, one of the companies involved in the construction management of the Devon building.
The owner of the proposed structure is the first leg of that stool, bringing the direction and funding. Architects and engineers share the second, creating drawings from the direction. Third is construction companies who turn the drawings into concrete.
Construction has moved slowly away from a hard-bid process, in which an owner would engage an architect to complete drawings with an engineer that were then sent out for bid to construction companies. Now more common are methods of construction delivery that bring architects, engineers and construction companies together at the beginning of the process.
“Because of the speed that we generally move on a project now, there is a need for interaction between us and the architect and us and the contractor much earlier in the process than there was 10 years ago,” says Doug Phillips, principal at Phillips and Bacon engineering firm.
This also fosters an environment of teamwork, where hard bid projects can create an adversarial relationship, says John Cowen, owner of Cowen Construction.
“When you bring your entire team together – architects, engineers and construction company – they are all working on the same team toward the same goal,” says Cowen. This allows construction companies to hit the ground running, as well.
“As the architect begins to draw we can also begin to do some pricing and help the architects stay on budget,” says Leslie Goode, director of marketing and business development at Timberlake Construction.
In the end it is nice for the construction company because they are handed a set of drawings they are already familiar with, she says.
“This approach normally results in significant cost and schedule savings for the owner,” says Steve Olson, group president at Boldt Construction. Boldt’s Integrated Lean Project Delivery follows this practice.
Historically, only very large projects utilized this construction management approach, but demand has trickled down to smaller jobs, says John Priest, Crossland Construction Southwest region president.
“You work as a team very early on and work with a common goal of getting the owner the most building for their money,” he says.
“It provides the owner a transparent process. They get to see the bids, the fees. They get to see everything. It gives some owners a lot of comfort when they get to be a part of the process,” says Bob Jack, Manhattan Construction Tulsa division senior vice president.
From the moment an owner decides to build to when a shovel first hits the ground is generally six to nine months, says Kollmann. At that time construction companies dispatch a network of subcontractors to carry out the work of assembling the structure from what has been created on paper.
A construction company may engage 20 to 30 subcontracting companies in the course of a project. Large projects can require up to 50 subcontracting companies, but are scarce since the economic slump.
“There are not as many large projects, but considerably more small projects,” says Clint Frederick, marketing manager at Matrix Engineering.
Competition for these smaller projects is fierce.
“You get a lot of people competing for smaller projects, where you had design firms and construction firms that weren’t interested before in a $4 or $5 million project,” says Brad Thurman, principal and chief marketing officer at Wallace Engineering.
Priest says he’s also seen more competition from out-of-state companies looking to benefit from Oklahoma’s comparatively healthy market.
“Oklahoma has been in a little bit of a bubble from an economy and construction standpoint,” he says.
While private construction has slowed significantly, developers have benefited from public sector growth. “Before the economy went south, we were doing more private work, and as the economy affected the private developers our work shifted to public sector,” says Matt Crafton, president of Crafton Tull architecture and engineering firm.
Slumps in economy first impact architectural and engineering firms. Often construction companies have a backlog of up to a year to work through before they feel an economic downturn. Likewise, upturns in economy are felt first by architects and engineers and later by construction companies.
The subcontractors are often the most vulnerable in this ripple. “The two things we’ve seen is a lot of subcontractors go out of business and a lot of them going out of state for work,” says Goode.
But Goode remains optimistic and leans on the architecture community to give her hints about what is to come.
“The architects are picking up. They are telling us they are getting more jobs in their studios,” she says.