Wisconsin Builder - The A List

Kings of the hill fight for a foothold

By Sean Ryan

Company rankings in the following lists were determined by dollar volume of work put in place in 2002 for general contractors and subcontractors and by total 2002 billings for engineers and architects. Wisconsin Builder developed the lists based on survey responses from 64 construction companies throughout the state. The surveys were available both in The Daily Reporter newspaper and at The Daily Reporter Web site.

Last year's construction success stories emerged from a Darwinian environment where the bidding was brutal and the glass was never half full.

“I don't think there's any magic bullet,” said Thomas Boldt, CEO of The Boldt Company, which put $355 million of work in place in 2002. “This is a very competitive business, and there are many choices out there. I don't know that anyone would say profits are up, margins are expanding and life is swell.”

Last year offered meager opportunities in manufacturing, waning public work and, on the bright side, a hearty health-care market, said Tripp Ahern, president and CEO of J.F. Ahern Co., Fond du Lac. The glory years of the 1990s allowed many contractors to grow and thrive in Wisconsin, he said, but in the wake there have been too many contractors and not enough construction to go around.

“If you couldn't have some success from that period of time, you couldn't have any at all,” Ahern said. “When times get tighter, and you see some of those people start to bid work at prices lower than everyone else's cost, the handwriting for trouble is on the wall.”

In a business that’s fiercely competitive in the best of times, the current climate is claiming casualities and even making the cream of the crop turn sour, Boldt said. However, the basic canons of hard work and networking with owners are still what launch successful companies.

“The revenue that we have is the result of a lot of hard work and a lot of people's participation,” Boldt said. “There have been some firms that have gone away. I think there's a lot of companies that are under a lot of stress.”

J.F. Ahern Co.'s work on Lambeau Field is complete. The Fond du Lac-based company this year finished a $370,000 underground plumbing contract and a $2.8 million fire-protection package at Lambeau in Green Bay. The $295 million stadium project wrapped up in time for the Packers' exhibition game scheduled for August 23.

The heavy competition in the public sector caused Ahern to rely more heavily on private projects and to limit itself to larger public jobs when there were fewer bidders. Often, the smaller jobs go to a contractor that bids “dirt low” anticipating a loss just to land a job, Ahern said.

“The bidding has been brutal, particularly from the standpoint of the bid lists being longer than they have in the past,” he said. “I think you've got some people who are desperate for work right now and are willing to work below cost.”

Even with a bidding market that benefits owners, many projects were held up last year for political reasons, said Richard Schmidt, chairman and CEO of C.G. Schmidt Construction, the fourth-ranked general contractor on The A List with $175 million of work put in place in 2002. Schmidt had about $70 million in private projects delayed until 2003, including the Aldrich Chemical Co. Milwaukee plant addition and the expansion of Columbia-St. Mary's Ozaukee Campus in Mequon.

“With the low interest rates, (an owner) is going to get the best bang for his buck as far as property's concerned,” Schmidt said. “Usually it brings happiness to the owner.”

Boldt, Ahern and Schmidt all pointed to health care as Wisconsin's strongest market during the past year. Schmidt said the sector's vibrancy would likely last with ever-evolving health-care technology and competition between providers that almost rivals the tenacity in construction.

“Before you even have a project down in concrete, there's got to be some revisions because they all want to be on the cutting edge,” he said. “It's driven by changing technology and probably ego. I don't know which comes first, probably technology.”

Despite the industry climate, Schmidt said his company has been able to store up enough money to consider expanding its business.

“You can't do that when you're struggling,” he said. “You can't measure the depth of the swamp water when the alligators are biting you in the ass. But we're out of the swamp.”

Ahern, like Schmidt, predicted that next year will be even better for his company than the last.

“I think things are going to improve, although I'm still concerned about the manufacturing sector,” he said. “It's going to be a very competitive time, but overall I think things are going to get better than they have been.”

Boldt, who said he uses a more long-term focus to gauge his business' success, gave a more unsure but still encouraging forecast.

“I think it will be better,” he said. “I'm cautiously optimistic. I would've said that last year and two years ago, and it didn't materialize. So I'm saying that again.”