Winning the contract for a headline project with major economic development impact is less a matter of the lowest bid than offering the biggest skill set.
“Getting the lowest-price contractor is not always the best value to the owner by the time the job is completed. Having the most qualified contractor for the job is just as important as having the lowest possible price, ” says Russ Hale, vice president of business development at Birmingham-based Hoar Construction.
Hoar has been among the Alabama contractors most successful in competing for Alabama’s biggest new economic development projects and their equivalents in outlying states.
Competition in the construction industry has evolved such that experience, necessary skills sets and relationships with decision makers are more important than submitting the lowest bid, no matter where the work is done.
“Relationships are the most important thing, ” says Hale. “Decision makers choose firms based on their qualifications and their construction management approach.”
Alan Chandler, senior vice president of business development at Birmingham-based Doster Construction, says the key to winning the company’s largest job last year was “developing a relationship and a resume that reassured the client that we were the best company for the job. We won the project on our value proposition of delivering predictable outcomes, not low bid.”
Jeff Stone, executive vice president at Birmingham-based Brasfield & Gorrie, sums up in one word what he thinks is the key to winning contracts: Experience.
Having the necessary expertise and relationships has served Alabama contractors well on several — but far from all — large industrial construction projects in the state. Brasfield & Gorrie, for example, is building an $83 million water treatment plant for the Huntsville Utilities that’s scheduled for completion in 2018. Last summer, the company completed a $70 million, 150, 000-square-foot steel pipe processing facility in Birmingham for American Cast Iron Pipe Co.
Brasfield & Gorrie also was selected to do initial construction contracts at the $600 million Airbus campus in Mobile. Hoar Program Management (HPM) served as the Airbus project program manager in charge of all design and construction. Birmingham-based BL Harbert International and Mobile-based Rob’t J. Baggett also served as general contractors for portions of the project, with a number of other Alabama firms — Gulf States Engineering, Thompson Engineering and Hosea O. Weaver among them — sharing the Airbus work with major national and international companies.
ABOVE Serving as general contractor, Brasfield & Gorrie completed the Final Assembly Line Package A, which included the hangar, service building and logistics center for Airbus, in September 2015. Photo courtesy of Airbus
BL Harbert also has done extensive work at the Mercedes Benz USA plant in Tuscaloosa County. It is currently part of a joint venture for a $1.3 billion expansion of the Mercedes auto assembly plant. Scheduled for completion in 2017, the project includes a 1.3 million-square-foot body shop, an assembly addition and energy center renovation. BL Harbert International earlier had been the general contractor for a $70 million parts consolidation center at Mercedes.
According to Johnny Garlington, BL Harbert’s U.S. Group president, “Our people and our processes are the key to our success. Our expertise in design-build projects gives us a better understanding of all aspects of a project and positions us to better service a client, even when design is not included in our scope.”
Other recent wins on large industrial projects among Alabama contractors include Birmingham-based Cooper Construction, the general contractor for a $530 million expansion for auto parts manufacturer Kamtek in Birmingham.
Mobile County-based G.A. West won the contract in 2009 to build the massive $5 billion ThyssenKrupp Steel Plant in Calvert.
But the C word — competition — is never far away. Recent losses of note for Alabama contractors include the $142 million, 600, 000-square-foot Polaris facility in Huntsville, which will make off-road vehicles, and a $50 million plant for auto supplier Bolta Werke USA in Tuscaloosa.
To be sure, there are other losses to out-of-state contractors, but competition works both ways. For in-state jobs that larger Alabama contractors miss, they get their share across state lines. Brasfield & Gorrie’s largest out-of-state project last year was a $321 million contract to build-out the seven-story, 1.2 million-square-foot Orlando Veterans Affairs Medical Center in Florida, which included a large multispecialty outpatient clinic, 134 inpatient beds and administrative and support services.
Brasfield & Gorrie also was awarded a $300 million contract on the Piedmont Atlanta Master Plan Facility in Atlanta, where construction will begin in 2017. The project includes a 13-story tower addition, three levels of underground parking, a pedestrian-level plaza and renovation of vacated space in the existing hospital.
ABOVE Doster Construction was general contractor for the Clubhouse Student Apartments at the University of Louisville, a $60 million development where Doster handled some $45 million of the work.
Doster Construction was the general contractor for a negotiated project in Louisville, Kentucky — the Clubhouse Student Apartments, a $60 million development with 271 apartments where Doster’s work amounted to almost $45 million. Doster also is the general contractor for the Fountains of Germantown, a $32.6 million mixed-use residential development in Nashville.
Then there’s Liberty Center, a Hoar Construction project near Cincinnati, Ohio. Called a “game changer” by at least one Ohio media outlet, the “live, work, play” development includes more than 1 million square feet of retail, office and residential space, along with other amenities that include hotels, outdoor parks and theaters. According to one source in Ohio, Liberty Center “has everything a city has and can give people living there everything a city has without the crime.”
The much-anticipated project’s 18-month construction schedule put Hoar under the gun from the start, thanks to two especially harsh winters. Hoar began site work in early 2014, but the construction team lost a seemingly insurmountable 191 days because of snow and freezing conditions. At one point, the frost layer on-site was up to 34 inches deep — so bad that a large bulldozer and 15-ton sheep’s foot roller were frozen into the earth for a month.
Hoar, whose contract was for $143 million, pulled out all the stops to finish the project on time. That included bringing in additional masonry workers from Arkansas and Kentucky, working with multiple electrical, steel erection and drywall companies, air freighting needed materials from Europe and out-of-the-box thinking to coordinate work by different contractors.
Hoar alone had 21 superintendents working on site and seven project managers working fulltime in the Birmingham office. Liberty Center opened on time and within budget in time for the 2015 holiday season.
“You can’t miss the open date, ” Hale says. “You really don’t have an option. And Hoar hasn’t missed a retail open date in its history.”
Aubrey Logan, Hoar’s vice president of division operations, called Liberty Center “the most collaborative and strategic team that I have ever been a part of in my 40 years working at Hoar.”
ABOVE Hoar Construction is at work on Dania Pointe, a $170 million, 102-acre, mixed-use development between Hollywood and Fort Lauderdale, Florida.
Hoar Construction added another mega-project to its workload with a $170 million contract for Dania Pointe, a mixed-use development being built on 102 acres between Hollywood and Fort Lauderdale, Florida. Similar to the Liberty Center in Ohio, Dania Pointe will have more than a million square feet of retail space, 1, 000 residential units, two 10-story buildings each with 250, 000 square feet of office space, restaurants, hotels and public entertainment areas.
Charlie Ingram is a freelance contributor to Business Alabama. He is based in Birmingham.
Text by Charlie Ingram