There’s room for everyone in contracting pool

By Dustin Block

Creative Constructors LLC and Total Team Construction LLC won’t be mistaken for the biggest general contractors in the state.

While Gilbane Building Co., Milwaukee, and Mortenson Construction, Brookfield, put in place annual volumes in the billions — the companies were ranked first and second, respectively, in Wisconsin Builder’s A-List — there’s still plenty of room in the industry for the smaller firms.

The opportunities are there, but companies like Creative Constructors have to find their niche. And Creative, which was founded in Menomonee Falls in 1999, did just that, logging $10.40 million in volume in 2006 and placing 24th on the A-List. Brian LaBonte’, a vice president at Creative Constructors, said the company’s existence and success mirrors a trend in the industry.

“There’s a lot of start-up companies — we’re kind of one of them,” he said. “It seems like there is more of a growth from smaller companies, people breaking off and starting their own company.”

Small firms like Creative Constructors, which employs 14 people, aren’t going to get massive projects like Gilbane’s Manpower Headquarters job in Milwaukee. But there’s a lot more to the industry than giant jobs, LaBonte’ said.

“There are a fair amount of projects to bid out there,” he said.

Total Team Construction, Brookfield, is another company that found success through a narrower focus. Total Team’s niche is in negotiated projects, where the contractor takes responsibility for hiring the architect and subcontractors, said William Fuchs, president and owner of the firm.

Fuchs estimated that 90 percent to 95 percent of Total Team’s business comes through the negotiated process, which saves the company from entering a highly competitive bidding process that can be expensive and time consuming, particularly for a smaller firm.

In the last year, Fuchs said, fluctuating gas prices were a major issue. With price swings as much as 50 cents a gallon over a few months, gas prices threatened to amount to hundreds of thousands of dollars on a given project — far more than markup.

“It’s extremely challenging to know where delivery prices will be,” Fuchs said. “You’re really shooting dice and throwing darts.”

The uncertainty over fuel prices means someone is taking a risk on a project, be it the owner, the general contractor, the subcontractor or the vendor. If prices spike, someone has to pay the bill, and that can be catastrophic for a business.

“I’ve seen businesses go out because of gas prices,” Fuchs said.

At the same time, markets are strong across the board for construction, said Corey Brumbaugh, vice president of business development for Miron Construction Co. Inc., Neenah.

Miron, Brumbaugh said, reported record sales and revenues in 2006, and that equated to fourth place on the A-List with $421.90 million in volume, including $379.90 million in Wisconsin.

Also, like Total Team, Brumbaugh said the biggest trend Miron is seeing is clients shifting from competitive bids to the negotiated process, which can deliver savings by utilizing the expertise of the builders in the planning process.

Contractors, in turn, are becoming more sophisticated in working with clients in different industries to save money and create better buildings.

“We’re not just dumb building contractors anymore,” Brumbaugh said.