Overview p. 2 // 2012-2013 at a Glance p. 2 // Profitability Analysis p. 2 // Revenue Volume p. 2 // Backlog Analysis p. 2 // A Decade of Contract- ing Revenue p. 2 // Markets’ Share of Total Revenue p. 3 // Domestic Staff Hiring p. 3 // International Staff Hiring p. 3 // International Market Analysis p. 4 // Day & Zimmermann Moves Forward p. 4 // Top 400 Dialogue p. 5 // Top 20 by Sector pp. 6, 7 // Top 100 by New Contracts p. 8 // Top 50 Contractors Working Abroad p. 9 // Infrastructure and Energy Alternatives Aim at Energy Markets p. 9 // Top 50 Domestic Heavy Contractors p. 10 // Top 50 Domestic General Building-Manufacturing Revenue p. 11 // Apartment Life Suits Summit Contracting p. 11 // Taking the Long View on LNG p. 12 // Top 400 List p. 13 // Top 400 Index p. 21 enr.com May 20, 2013 ENR 1 Despite Growth, Firms Worry The market for contractors is beginning to trend upward, but firms are cautious in predicting a full market recovery By Gary J. Tulacz, with Debra K. Rubin NUMBER 41 MUSEUM STARS Suffolk Construction is building the Patricia and Phillip Frost Museum of Sci- ence, Miami, which includes a spherical planetarium. PHOTO CREDIT: NEW YORK FOCUS FOR SUFFOLK CONSTRUCTION
Transcript
Overview p. 2 // 2012-2013 at a Glance p. 2 // Profitability Analysis p. 2 // Revenue Volume p. 2 // Backlog Analysis p. 2 // A Decade of Contract-ing Revenue p. 2 // Markets’ Share of Total Revenue p. 3 // Domestic Staff Hiring p. 3 // International Staff Hiring p. 3 // International Market Analysis p. 4 // Day & Zimmermann Moves Forward p. 4 // Top 400 Dialogue p. 5 // Top 20 by Sector pp. 6, 7 // Top 100 by New Contracts p. 8 // Top 50 Contractors Working Abroad p. 9 // Infrastructure and Energy Alternatives Aim at Energy Markets p. 9 // Top 50 Domestic Heavy Contractors p. 10 // Top 50 Domestic General Building-Manufacturing Revenue p. 11 //
Apartment Life Suits Summit Contracting p. 11 // Taking the Long View on LNG p. 12 // Top 400 List p. 13 // Top 400 Index p. 21
enr.com May 20, 2013 ENR 1
Despite Growth, Firms WorryThe market for contractors is beginning to trend upward, but firms are cautious in predicting a full market recovery By Gary J. Tulacz, with Debra K. Rubin
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MUSEUM STARS Suffolk Construction is building the Patricia and Phillip Frost Museum of Sci-ence, Miami, which includes a spherical planetarium.
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The construction market is making progress toward recovery. However, many large contractors remain uncertain as to where the market is going. They see persistent softness in the U.S. market, and those work-ing in the public sector are finding that funding short-falls among clients are an obstacle to growth.
The modest turnaround in the construction market can be seen in this year’s ENR Top 400 Contractors list. As a group, the Top 400 generated $309.45 billion in contracting revenue in 2012, an increase of 9.7% from 2011’s $282.14 billion. The figure is still some 8.5% below the record $338.38 billion in 2008 con-tracting revenue reported in our 2009 Top 400.
Domestic contracting revenue for the Top 400 rose 6.1% in 2012, to $233.99 billion, while international contracting revenue jumped 22.4%, to $75.46 billion. While the domestic market clearly is beginning to make progress toward prosperity, it still has far to go to match the record $281.36 billion in domestic con-tracting revenue by the Top 400 in 2008.
There is a marked contrast between the domestic private-sector markets and those dominated by the public sector. Manufacturing, which rose 82.7% in 2011, again was the top gainer in 2012, this time by 22.9%, showing the strongest domestic turnaround. The industrial-process market came in a close second, rising 21.9%. The power market was up 15.3%,
petroleum was up 13.1% and telecommunications climbed 10.4%.
The domestic infrastructure markets continued to struggle. Contracting revenue in the U.S. transporta-tion market rose 3.9%, while hazardous-waste contracting was up only 0.8%. Water-supply work, on the other hand, was the big loser in the 2012 market: Contracting revenue from projects in the water-supply market fell 25.8%. The sewer-and-wastewater market also fell, with revenue down 0.7%, the fifth straight year for declining contracting revenue in the sector.
The largest domestic market is general building, which rose 3.6%, to $113.33 billion, in 2012 over 2011. However, this is a far cry from 2008, when con-tractors from the Top 400 generated $135.47 billion from the general-building market.
The largest contractors continue to win mega-projects. Bechtel won over $19 billion in new contract-ing work in 2012, on top of a record $47 billion in contracting sales in 2011. “We think 2013 will be another solid year—not a record-breaker, but solid,” says Bill Dudley, Bechtel’s president. Bechtel won the front-end engineering-design contract from Anadarko Moçambique Area 1 Ltd. on a new liquefied-natural-gas processing plant in Mozambique in January and a 758-MW natural-gas-fueled, combined-cycle power-plant in Temple, Texas, in April.
“I am not ready to pop the champagne cork yet, but there are positive signs in many of the markets we serve.”
Terry Dunn, CEO, JE Dunn Construction Group
2012-2013 at a Glance
THE TOP 400 CONTRACTORS
Number of FirmsReporting Profitability
Domestic Profits
International Profits
Domestic Losses
International Losses
310
52 3140
Volume (in $ billions)
233.99 216.43
80.0575.46
Domestic Revenue
DomesticNew Contracts
InternationalRevenue
InternationalNew Contracts
Number of FirmsReporting Size of Backlog
Higher
Lower
Same
210
8657
Comparing thePast Decade’sDesign Revenue
$193.42003
$209.72004
$235.62005
$262.82006
$304.42007
$338.42008
$290.62009
$259.42010
$282.12011
(in $ billions) Source: McGraw-Hill Construction Research & Analytics / ENR.
Fluor also is having a big year. On April 30, Fluor and its partners received a notice to proceed on the $3.14-billion Tappan Zee Bridge replacement project in New York, and on May 2, Fluor won an ethylene cracker project for Dow Chemical in Freeport, Texas. “New awards for the quarter were strong [at] $6.5 bil-lion, including $3.1 billion in oil and gas and $2.2 bil-lion in industrial and infrastructure,” said Fluor CEO David Seaton at a May 2 earnings conference. The firm’s consolidated backlog is $37.5 billion, he says, “which is down from a year ago primarily due to the downturn in the mining-and-metals market.” But Seaton is encouraged by improving margins on Fluor’s backlog.
Kiewit Corp. also has reason to celebrate, having won—with Macquarie Infrastructure & Real Assets, Weeks Marine and Massman Construction—the $1.5-billion Goethals Bridge replacement job in New Jersey, and, with partner Skanska Koch, a $743.3- million contract to raise the deck of the Bayonne Bridge. Both contracts were awarded in late April.
Getting BiggerThere has been a significant trend toward industry consolidation over the past two decades. However, much of this trend has been centered on the design side of the market, with large, publicly owned compa-
nies—such as AECOM, URS and Stantec—using their financial capabilities to acquire capacity and market share. But there have been some significant acquisi-tions on the contracting side. For example, DPR Construction made a major move into the Southeast early this year by acquiring Atlanta-based Hardin Construction.
A few large contractors have been in acquisition mode. One major acquisition in the past year was by Granite Construction, which acquired Northbrook, Ill.-based heavy-civil contractor Kenny Construction. “Together with Kenny, our plan is to expand our pres-ence into targeted markets such as power delivery and water-and-wastewater infrastructure, both of which have attractive long-term fundamentals,” said James H. Roberts, CEO of Granite Construction, during a recent investment-analyst teleconference. He also says Kenny will bring Granite a greater presence in the Midwest market.
But some contractors have not relied on acquisi-tions to move into new markets. “In August of 2012, we expanded our offerings to include environmental services, specializing in assessments and abatement,” says Bill Hannah, CEO of Nabholz Construction Corp. He says the firm is moving beyond its private-sector client base and now is successfully constructing public highway and street projects.
Firms on the list that sent in a survey in 2012.
369
Firms increased revenue in 2012 over 2011.
65.3%
Firms that had lower revenue in 2012 than in 2011.
33.9%
Markets’ Share of Revenue
OVERVIEW#04THE TURNER CORP. has the most domestic revenue, at $8.35 billion. Most of Bechtel’s and Fluor’s revenue comes from international work.
enr.com May 20, 2013 ENR 3
ProfessionalDomesticStaff Hiring Source: McGraw-Hill Construction
Further, many contractors are focused on making sure their size works in their favor. No stranger to acquisitions, Balfour Beatty US is interested in trying to make its parts work together. “We are not interested in size for the sake of size. We are more interested in creating synergies within our organization,” says Rob-ert Van Cleave, CEO. He says Balfour Beatty has been working with sister company Parsons Brinckerhoff on numerous projects to provide a strong combination of talent for projects.
Public vs. PrivateThe public-sector market has been sluggish because of declining or uncertain revenue streams. “Govern-ment work continues to be anemic,” says Bart Eber-wein, executive vice president of Hoffman Construc-tion. “I am guessing that tax revenue shortfalls have caught up with most municipalities, and federal agen-cies are feeling [wary] about the public’s appetite for capital spending when sequestration and other belt-tightening measures dominate headlines.”
On the other hand, contractors working in the pri-vate sector are beginning to enjoy a market turn-around. A big factor in the private-sector recovery is that banks and other financial institutions finally are beginning to lend on projects. “We are seeing projects actually getting built as developers are able to get the necessary debt and tenants to make the economics work,” says Sam Alley, CEO of VCC Construction.
Further, many firms are seeing commercial and corporate clients beginning to spend. “We’ve observed that companies within our core market sectors have operated conservatively, stockpiling cash and avoiding
International Market Analysis
THE TOP 400 CONTRACTORS OVERVIEW
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Day & Zimmermann (No. 46), Philadelphia, lost steam in its Top 400 ranking this year as a slow recovery and reduced energy use cut into its power-market construc-tion revenue. But the 112-year-old firm, which dropped 12 slots based on 2012 revenue, is relying on its market breadth for better returns this year.
“The beauty of D&Z is the diversity in our business,” says CEO Hal Yoh. “We’ve seen that over the decades. Not all our clients know what we can do.” In addition to engineering, construction and O&M, the firm manages U.S. defense facilities, provides logistics and security services, and does technical staffing management. D&Z plans to take its power expertise into other sectors. “We’d like to use
lessons we’ve learned and expand our footprint in process and industrial markets,” says Michael McMahon, president of D&Z’s construction-focused unit. He says D&Z’s power processes “translate quite well” to chemicals, advanced manufacturing and food-and-bever-age, among others. The new work includes a southeastern U.S. chemicals plant (above), which the firm declines to identify.
McMahon notes a recent alliance with a “major” U.S. beverage firm for construction management and other services at four plants. He says D&Z is encouraged by process engineering growth, “which will result in an increase in construction spend.” D&Z has done process design for the Hershey Corp. dating back a century.
D&Z Powers Into New Markets
enr.com May 20, 2013 ENR 4
The Top 400 Dialogue Do you see any existing or new technologies that are helping the construction process?
What are your strategies for succeeding in an uncertain market?
MATTHEW GRAY, PRESIDENTGRAYCOR INC.Oakbrook, Ill.
People have iPads, smart phones, iCloud accounts, social media accounts, bar-code recognition. They believe, “If I can do it at home, why can’t I at work?” Firms that can keep up with these expectations will be successful.
JIM KARAMBELAS, CEOGLY CONSTRUCTION INC.Bellevue, Wash.
Virtual design and construction [VDC] continues to be an evolutionary force in our industry. If you’re not engaged in the conversation and investing in training and software, you’re just going to be left behind.
ROBERT ALGER, CEOTHE LANE CONSTRUCTION CORP.Cheshire, Conn.
We developed a new business-development department. We have taken high-performers from our operations side and placed them in the department. It is too soon to tell if this will be successful, but early indicators are good.
FRED PERPALL, CEOTHE BECK GROUPDallas
In 1999, Beck merged with Urban Architecture to become an integrated enterprise that relies on a business-model strategy, instead of a contract model. Over a decade later, we remain committed to our integrated-enterprise model.
DENNIS CORNICK, EXECUTIVE VPGILBANE BUILDING CO.Providence, R.I.
Sophisticated web-based project management tools like our proprietary iBuild program are allowing for virtual jobsites, where all team members can have a real-time view of changes made to the project as they are happening.
JOHN ALLCORN, EXECUTIVE VPWILLBROS GROUP INC.Houston
THOMAS GOEMAAT, CEOSHAWMUT DESIGN AND CONSTR.Boston
We created a software program to track, report and analyze our safety-related data and subcontractor performance. [We can] analyze potential exposures and rectify any issues by looking at both leading and lagging indicators.
KEVIN MCCARTHY, CEOPC CONSTRUCTION CO.South Burlington, Vt.
The markets in which we pursue work will not change in the near future. We see many companies reaching out of their comfort zone to pursue work in new markets. For us, it just makes sense to stick with what we do best.
JEFF STONE, COOBRASFIELD & GORRIE LLCBirmingham, Ala.
Over the last five years or so, we have entered into many, many more joint ventures than we had in the past. There’s a lot of synergy that we gain from partnering with other companies that share our values and expertise.
JIM CHARPENTIER, DIR. BUS. DEV.BNBUILDERS INC.Seattle
One of the keys to our success has been to diversify geographically and take advantage of downtime to build relationships where they did not exist before. We pushed into Southern California ... and have not looked back.
In the pipeline market, the advance of GIS, mapping and imaging technology has allowed us to develop leading solutions for the management of integrity programs and increased regulatory requirements in the field.
enr.com May 20, 2013 ENR 5
THE TOP 400 CONTRACTORS OVERVIEW
expenditures. As we see the economy continue to im-prove, some of that money is now being put into play,” says Fred Perpall, CEO of The Beck Group. However, he says clients are more cautious today in how they approach potential projects. “They’re asking for what-if scenario planning to make sure they’re making the best decisions on how to deploy funds to meet business objectives and create more value,” Perpall says.
The increase in private work has balanced out shortfalls on the public side. “Certainly, the govern-ment market is experiencing some downward pressure, but there is work out there,” says Terry Dunn, CEO of JE Dunn Construction. He says multi-unit residen-tial is strong, and investment-related work, such as hotels and commercial offices, is coming on line. “We enjoyed 8% to 10% growth last year and are hoping that holds up this year. I am not ready to pop the cham-pagne cork yet, but there are positive signs in many of the markets we serve,” he says.
The upswing in private work has gone counter to previous construction recessions, when the industry relied on government to prime the pump to turn the industry around. “For the first time in U.S. history, a post-recession recovery is being carried by the private sector versus the public sector,” says Jim Karambelas, CEO of GLY Construction.
The Top 20 Contractors by Sector
THE TOP 400 CONTRACTORS OVERVIEW#376THE GEORGE SOLLITT CONSTRUCTION CO., the oldest contractor on the Top 400, is celebrating its 175th anniversary.
Higher Education By Gary J. Tulacz
Choate Construction (No. 124) is building the Clemson University Wind Turbine Drivetrain Testing Facility in North Charleston, S.C. Part of the Clemson University Restoration Institute, the facility is a Navy building conversion.
Many contractors believe the industry is still a year or more away from full prosperity. “Most economic forecasts call for incremental growth for the next two to three years—likely in the 8%-a-year range,” says Paul Little, CEO of Panattoni Construction. But he worries that budget deficits both here and abroad may keep the industry “in a low-growth, low-interest-rate, low-inflation environment for the foreseeable future.”
“Real construction activity is likely 18 to 24 months off, but people are talking about projects again,” says Eric Hedlund, COO of Sundt. “I think we’re on the upswing but still in a fairly fragile economy,” says Jeff Stone, COO of Brasfield & Gorrie. “We’re definitely not back to where we were in 2007 and 2008, before the big downturn. We have several years ahead of us before we get back to that point, but we’re on the right trajectory,” Stone says.
Business Is BackManufacturing is enjoying a renaissance. “Many cor-porate clients are feeling bullish,” says Eberwein. He says there are a variety of factors that should boost the sector for many years to come, including the emer-gence of an international middle class that demands American products and the ability of U.S. manufactur-ers to offer higher-quality products at lower costs due
The Top 20 Contractors by Sector
THE TOP 400 CONTRACTORS OVERVIEW#46DAY & ZIMMERMANN helped to design the original foil-wrapping machines used to wrap the Hershey Kiss back in 1914.
Marine Contracting | By Gary J. Tulacz
LPCiminelli (No. 155) is building a new docking station for the Maid of the Mist tour boat at Niagara Falls, N.Y. An LPCiminelli team (above) is being lowered 200 feet to determine a safe location to set up excavation equipment.
to low energy costs and low-interest-rate borrowing. Another factor fueling the corporate building in-
crease is competition for young, creative professionals who would like a redesigned workplace: more collab-orative, more open, less cubicle-oriented, greener and healthier, Eberwein says. “This has led to an uptick in office work, corporate headquarters and campuses with not only reinvented workspaces but also health clubs, daycare, cafes, etc.,” he says.
The manufacturing market should continue to remain healthy. “Our indicators tell us that manufac-turing will continue to be on the upswing for the next five to 10 years,” says Stephen Gray, CEO of Gray Construction. He says worker shortages may hinder
some manufacturers. But “some manufacturers believe comprehensive immigration reform could shrink this gap without displacing American workers.”
The new surge in manufacturing plants might not lead to the kind of job creation sought by local com-munities. “We put in industrial rail yards in a lot of these plants, and they are being built to be highly au-tomated,” says Jeffrey Levy, CEO of RailWorks. He says that many of these projects are conversions of existing plants. “A plant that used to employ hundreds may only employ a few dozen now,” he says.
It’s a GasThe shale-gas and oil boom in the U.S. has ignited a
For expanded content on the ENR Top Lists,see enr.com/toplists.
On theWeb
THE TOP 400 CONTRACTORS OVERVIEW#15WHITING-TURNER CONTRACTING CO. CEO Willard Hackerman is celebrating his 75th anniversary with the firm. He was hired in 1938.
RANK2013
REVENUEIN $ MIL.
1 FLUOR CORP. 27,100.0
2 BECHTEL 19,468.0
3 KBR 14,190.0
4 THE TURNER CORP. 11,263.3
5 PCL CONSTRUCTION ENTERPRISES INC. 7,643.8
6 CB&I 7,305.9
7 SKANSKA USA 6,747.9
8 KIEWIT CORP. 6,208.4
9 JACOBS 6,020.7
10 THE WHITING-TURNER CONTRACTING CO. 5,003.0
11 MCDERMOTT INTERNATIONAL INC. 4,827.7
12 THE WALSH GROUP LTD. 4,703.5
13 BALFOUR BEATTY US 4,610.5
14 CLARK GROUP 3,734.4
15 FOSTER WHEELER AG 3,449.5
16 GILBANE BUILDING CO. 3,416.1
17 URS CORP. 3,295.7
18 TUTOR PERINI CORP. 2,694.0
19 MCCARTHY HOLDINGS INC. 2,679.0
20 BRASFIELD & GORRIE LLC 2,580.1
21 JE DUNN CONSTRUCTION GROUP 2,569.5
22 STRUCTURE TONE 2,559.5
23 DPR CONSTRUCTION 2,414.7
24 BLACK & VEATCH 2,364.0
25 LEND LEASE 2,049.5
26 THE BABCOCK & WILCOX CO. 2,048.4
27 MORTENSON CONSTRUCTION 2,042.0
28 ZACHRY HOLDINGS INC. 1,883.0
29 THE YATES COS. INC. 1,817.6
30 SUNDT CONSTRUCTION INC. 1,805.0
31 PRIMORIS SERVICES CORP. 1,730.0
32 FLATIRON CONSTRUCTION CORP. 1,719.0
33 MICHELS CORP. 1,598.4
34 SUFFOLK CONSTRUCTION CO. INC. 1,557.8
35 THE LANE CONSTRUCTION CORP. 1,507.6
RANK2013
REVENUEIN $ MIL.
36 SELLEN CONSTRUCTION CO. INC. 1,505.0
37 S&B ENGINEERS AND CONSTRUCTORS 1,469.0
38 COLAS USA 1,467.0
39 SWINERTON INC. 1,466.6
40 HENSEL PHELPS 1,429.4
41 WALBRIDGE 1,393.0
42 HOLDER CONSTRUCTION CO. 1,288.0
43 FLINTCO LLC 1,277.0
44 FERROVIAL AGROMAN U.S. CORP. 1,206.9
45 CH2M HILL 1,205.6
46 BARTON MALOW CO. 1,178.8
47 GRANITE CONSTRUCTION INC. 1,175.0
48 DAVID E. HARVEY BUILDERS INC. 1,125.0
49 CLAYCO INC. 1,100.0
50 LAYNE CHRISTENSEN CO. 1,079.7
51 HUNTER ROBERTS CONSTRUCTION 1,003.0
52 LECHASE CONSTRUCTION SERVICES LLC 965.0
53 THE KOKOSING GROUP 963.9
54 ALBERICI CORP. 960.8
55 ADOLFSON & PETERSON CONSTRUCTION 960.8
56 GRAY 926.8
57 DEVCON CONSTRUCTION INC. 900.0
58 DAY & ZIMMERMANN 900.0
59 AMERICAN INFRASTRUCTURE 896.5
60 VALLEYCREST LANDSCAPE COS. 880.0
61 JAMES G. DAVIS CONSTRUCTION CORP. 873.2
62 LPCIMINELLI INC. 869.8
63 LAYTON CONSTRUCTION CO. INC. 859.0
64 C.W. DRIVER 840.8
65 SHIMMICK CONSTRUCTION CO. INC. 838.7
66 MATRIX SERVICE CO. 831.0
67 PEPPER CONSTRUCTION GROUP 808.4
68 MESSER CONSTRUCTION CO. 807.2
69 ROBINS & MORTON 807.0
70 M+W U.S. INC. 802.1
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REVENUEIN $ MIL.
71 AUSTIN INDUSTRIES 768.0
72 TRAYLOR BROS. INC. 757.6
73 CONSIGLI CONSTRUCTION CO. INC. 757.0
74 HUNT CONSTRUCTION GROUP INC. 745.0
75 GARNEY HOLDING CO. 740.6
76 HITT CONTRACTING INC. 739.3
77 B.L. HARBERT INTERNATIONAL LLC 707.3
78 VCC LLC 695.0
79 THE BECK GROUP 694.2
80 DCK WORLDWIDE LLC 688.3
81 HATHAWAY DINWIDDIE CONSTRUCTION 682.0
82 TORCON INC. 676.0
83 OHL USA INC. 668.2
84 HOAR CONSTRUCTION LLC 655.1
85 INFRASTRUCTURE AND ENERGY ALTERN. 647.0
86 PARSONS 646.6
87 STERLING CONSTRUCTION CO. INC. 643.0
88 RYAN COS. US INC. 637.6
89 ODEBRECHT CONSTRUCTION INC. 636.3
90 SHAWMUT DESIGN AND CONSTRUCTION 628.8
91 F.H. PASCHEN, S.N. NIELSEN 610.0
92 THE BOLDT CO. 607.0
93 KRAUS-ANDERSON CONSTRUCTION CO. 607.0
94 ECC 606.7
95 AEGION CORP. 591.0
96 PJ DICK-TRUMBULL-LINDY PAVING 584.0
97 AMES CONSTRUCTION INC. 579.0
98 RAILWORKS CORP. 574.0
99 THE MCSHANE COS. 572.9
100 J.P. CULLEN & SONS INC. 566.5
* AMONG TOP 400 FIRMS PROVIDING DATA
enr.com May 20, 2013 ENR 8
The Top 50 Contractors Working Abroad
lot of excitement in the industry. “There is a relatively strong appetite for capital investments, driven by the expansion of infrastructure both to support unconven-tional natural-gas production and, more recently, the expansion of liquids production,” says John Allcorn, executive vice president of Willbros Group. He sees increased spending on pipeline integrity and mainte-nance. “Pipeline failures over the past few years have brought more scrutiny, which will require additional investment to prove system integrity,” he says.
Much of the oil-and-gas work will be focused on the Gulf Coast. “I think that everybody wants to talk about shale gas in the Gulf Coast, which is a great story. We’re in the early stages of $35-billion worth of EPC value,” says Seaton of Fluor.
The increasing availability of cheap domestic gas and oil has spurred potential opportunities beyond just the petroleum market. “There is a lot of work in North Dakota, but most of the growth will be in the South,” says Dudley. “We are seeing several petro-chemical projects moving ahead. We expect to book at least one, if not more.”
However, Dudley says the impact of the gas boom will go beyond just upstream extraction, transport of the gas and petrochemical plants. “We expect manu-facturing projects in the plastics industry,” he says, which means power and infrastructure projects will follow to support this upswing in industry. “Unfortu-nately, we are not seeing the volume of power work that we might wish for,” he says.
The power market is suffering from a great deal of
THE TOP 400 CONTRACTORS OVERVIEW#08CB&I completed its acquisition of The Shaw Group in February 2013. Shaw is ranked at No. 10 on this year’s list.
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enr.com May 20, 2013 ENR 9
Companies | By Gary J. Tulacz
Infrastructure and Energy Alternatives LLC (No. 74) is the largest contractor to make its first appearance on the Top 400 list. IEA is a holding company financed by GFI Energy Group and by IEA management, led by CEO Paul M. Daily, former CEO of energy services contractor InfraSource.
In August 2011, IEA acquired White Construction Inc., Clinton, Ind., a large heavy-civil contractor with experience in building wind farms. This was followed on Jan. 31, 2013, by the acquisition of RMT Inc., a Madison, Wis.-based engineer-contractor active in wind and solar energy and transmission lines.
“IEA is heavily involved in the engineering and construction of renewable-energy wind, solar and
biomass facilities across North America,” says Daily. But he says the renewable-energy market has an uncertain future, so IEA is focusing on other energy projects.
“We do turnkey alternative energy projects, but our goal is also to be a midrange design and construction provider to a wide spectrum of energy projects,” says J.P. Roehm, IEA vice president. He says IEA has worked for Marathon Oil and plans to expand its services in the utility, oil and gas sectors.
IEA plans to double in size in the next three to four years through diversification and acquisition, says Daily says. “Don’t be surprised if we have a major announcement before the end of 2013,” Roehm adds.
IEA Aims at the Energy Market
RANK2013
REVENUEIN $ MIL.
1 BECHTEL 23,255.0
2 FLUOR CORP. 17,209.6
3 PCL CONSTRUCTION ENTERPRISES INC. 5,295.5
4 KBR 4,330.0
5 CB&I 3,503.6
6 KIEWIT CORP. 3,239.2
7 MCDERMOTT INTERNATIONAL INC. 2,679.9
8 FOSTER WHEELER AG 2,618.7
9 JACOBS 2,087.1
10 URS CORP. 913.7
11 BLACK & VEATCH 749.4
12 THE TURNER CORP. 730.6
13 CONTRACK INTERNATIONAL INC. 581.2
14 ECC 504.1
15 B.L. HARBERT INTERNATIONAL LLC 449.0
16 LAKESHORE TOLTEST CORP. 436.0
17 THE BABCOCK & WILCOX CO. 416.7
RANK2013
REVENUEIN $ MIL.
18 FLATIRON CONSTRUCTION CORP. 404.3
19 ALBERICI CORP. 365.5
20 AEGION CORP. 353.2
21 AMEC 339.2
22 THE SHAW GROUP INC. 315.0
23 WILLBROS GROUP INC. 292.2
24 LAYNE CHRISTENSEN CO. 254.0
25 CHINA CONSTRUCTION AMERICA 241.0
26 MWH GLOBAL 236.3
27 INGENIUM INTERNATIONAL INC. 216.7
28 GILBANE BUILDING CO. 193.7
29 CADDELL CONSTRUCTION CO. INC. 183.0
30 CH2M HILL 172.6
31 STRUCTURE TONE 167.4
32 OHL USA INC. 164.9
33 DCK WORLDWIDE LLC 160.0
34 RAILWORKS CORP. 160.0
RANK2013
REVENUEIN $ MIL.
35 THE WALSH GROUP LTD. 147.5
36 THE LAUREN CORP. 142.7
37 TUTOR PERINI CORP. 129.7
38 PERNIX GROUP INC. 114.8
39 GREAT LAKES DREDGE & DOCK CORP. 112.9
40 WEEKS MARINE INC. 112.4
41 INFRASTRUCTURE AND ENERGY ALTERN. 103.0
42 JINGOLI - DCO 102.0
43 STELLAR 99.9
44 SKANSKA USA 90.8
45 MCM 87.6
46 MICHELS CORP. 74.4
47 THE YATES COS. INC. 73.7
48 PARSONS 69.4
49 MATRIX SERVICE CO. 63.0
50 AMERICAN BRIDGE CO. INC. 59.6
RANK REVENUE % OF TOTAL REVENUE2013 IN $ MIL. TRANS- SEWER HAZ- WATER
1 KIEWIT CORP. 2,668.3 35 4 1 2
2 THE WALSH GROUP LTD. 2,465.7 51 4 0 8
3 FLUOR CORP. 1,800.3 19 0 16 0
4 GRANITE CONSTRUCTION INC. 1,678.0 78 0 0 3
5 SKANSKA USA 1,675.6 24 3 0 3
6 TUTOR PERINI CORP. 1,486.1 33 3 0 1
7 THE LANE CONSTRUCTION CORP. 1,356.7 98 0 0 0
8 BECHTEL 1,304.0 7 0 14 0
9 COLAS USA 1,300.0 91 4 0 1
10 THE SHAW GROUP INC. 1,277.4 4 1 29 0
11 FERROVIAL AGROMAN U.S. CORP. 1,204.6 100 0 0 0
12 PARSONS 831.9 46 6 22 1
13 BALFOUR BEATTY US 796.9 16 4 0 0
14 FLATIRON CONSTRUCTION CORP. 676.5 90 2 0 2
15 LAYNE CHRISTENSEN CO. 643.3 0 26 1 51
16 STERLING CONSTRUCTION CO. INC. 615.5 98 0 0 0
17 AUSTIN INDUSTRIES 602.0 35 0 0 0
18 OHL USA INC. 567.5 68 0 4 8
19 PCL CONSTRUCTION ENTERPRISES INC. 551.2 25 0 0 10
20 AMES CONSTRUCTION INC. 547.0 67 0 0 7
21 RAILWORKS CORP. 524.0 100 0 0 0
22 CLARK GROUP 513.3 12 0 0 0
23 THE KOKOSING GROUP 509.4 49 6 0 8
24 AMERICAN INFRASTRUCTURE 496.0 65 17 0 14
25 GARNEY HOLDING CO. 493.7 0 23 0 77
26 PRIMORIS SERVICES CORP. 486.8 28 4 0 0
27 GREAT LAKES DREDGE & DOCK CORP. LLC 475.3 100 0 0 0
28 THE TURNER CORP.. 472.6 6 0 0 0
29 WEEKS MARINE INC. 454.1 75 25 0 0
30 WILLIAMS BROTHERS CONSTRUCTION CO. INC. 426.0 100 0 0 0
31 STACY AND WITBECK INC. 424.8 100 0 0 0
32 HENSEL PHELPS 400.0 19 0 0 0
33 URS CORP. 396.5 11 0 5 1
34 NEW ENTERPRISE STONE & LIME CO. INC. 388.7 97 0 0 0
35 TRAYLOR BROS. INC. 381.9 73 15 0 11
36 MANSON CONSTRUCTION CO. 368.0 100 0 0 0
37 BARNHILL CONTRACTING CO. 367.0 77 0 0 0
38 AMERICAN BRIDGE CO. INC. 359.4 100 0 0 0
39 MCCARTHY HOLDINGS INC. 348.0 5 3 0 3
40 ZACHRY CONSTRUCTION CORP. 334.0 81 0 0 0
41 MANHATTAN CONSTRUCTION GROUP 330.5 22 0 0 0
42 PJ DICK-TRUMBULL-LINDY PAVING 325.0 46 3 0 1
43 SHIMMICK CONSTRUCTION CO. INC. 314.9 58 0 0 42
44 LAS VEGAS PAVING CORP. 310.0 100 0 0 0
45 SEMA CONSTRUCTION INC. 307.2 100 0 0 0
46 MWH GLOBAL 306.0 0 46 0 51
47 ANDERSON COLUMBIA CO. INC. 298.0 72 0 0 0
48 THE HUBBARD GROUP INC. 295.5 100 0 0 0
49 ORION MARINE GROUP INC. 280.0 100 0 0 0
50 CONTI GROUP 277.4 53 0 16 13
regulatory uncertainty, leading many utilities to hold off investing in capital improvements until the rules are more clear. One area of uncertainty is what direc-tion the U.S. Environmental Protection Agency will take since a federal court invalidated its Cross-State Air Pollution Rule in 2012.
“If you are a generator and the regulators aren’t giving you the answers you need to make your capital decisions, you’re going to have to [delay investments] until you have that data,” says Seaton. He says gas-fired plants will replace some coal-fired plants, but “until [utilities] really know the capacity that they have to replace, they don’t know exactly which gas projects to sanction and move forward with.”
The renewable-energy industry has an uncertain future for the long term as tax breaks supporting that market expire. An Internal Revenue Service rule issued in April allows the production-tax-credit extension to cover all wind-farm projects that begin construction by Dec. 31 of this year. “It is our belief that several projects that would have been previously scheduled to build in phases may be consolidated into one larger project to ensure the developer or utility qualifies for the tax credit,” says Paul M. Daily, CEO of Infrastruc-ture and Energy Alternatives.
Electric transmission and distribution is an area of opportunity for many contractors. Willbros is planning to parlay the firm’s high-voltage-transmission con-struction experience in Texas into surrounding states, says Allcorn. He says, “Our strategy is to expand our presence and provide our services to the markets be-tween the mid-Atlantic and Texas,” he says.
RoadworkThe transportation market has been struggling for a couple of years. The passage of the Moving Ahead for Progress in the 21st Century Act (MAP-21) legislation has provided some stability for state DOTs to plan longer-term projects, but many contractors say this is just a patch on what is really needed from Congress.
The irony of the market is that there are many enormous transportation projects across the country but few smaller jobs. “As I travel around the country, I do not see the smaller, bread-and-butter projects that keep regional contractors and pavers busy,” says Levy.
Many contractors see public-private-partnerships (P3s) and other alternate funding mechanisms as a means to fill the gap left by MAP-21 and local budget shortfalls. For example, the $1.5-billion Goethels Bridge replacement project in New Jersey is a P3 job. Further, the federal Transportation Infrastructure Fi-nance and Innovation Act authorizes credit assistance for alternative project financing.
THE TOP 400 CONTRACTORS OVERVIEW
The Top 50 Domestic Heavy Contractors
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The Top 50 in Domestic Building/Mfg. Revenue
Some contractors have been actively seeking out P3 opportunities. “We are seeing that large transpor-tation projects using the P3 delivery system are gaining momentum, and we will use our expertise in this area to look to capture those opportunities,” says Shaun Yancey, executive vice president, PCL Construction Enterprises. He says PCL is creating strategic alliances with consultants and contractors to pursue these jobs.
One of the difficulties in the increased use of P3s is that American investors are not used to this sort of investment. However, Canadian and European con-tractors have long used this type of financing for in-frastructure. “The influx of foreign players is changing the market. They have unlimited access to capital as they are backed by their countries. That’s something we don’t have here in the U.S. It is not always a level playing field,” says Robert Alger, CEO of the Lane Construction Corp.
One transportation market that has not had to scramble for funds is private railroads. “The large, Class 1 railroads have been listening to their customers and investing heavily to meet their needs,” says Levy. To upgrade their infrastructure, railroads have been investing $10 billion to $12 billion a year for several years and will spend $13 billion this year, he says. “The problem is that it is a good market, so we are seeing new competitors, like highway contractors, trying to get into it,” Levy says.
The Cost of Health-Care on FirmsThe health-care market has been in flux as a result of
THE TOP 400 CONTRACTORS OVERVIEW#24DPR CONSTRUCTION acquired Atlanta-based Hardin Construction Co. LLC, which ranked at No. 118 on the ENR Top 400 last year.
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Companies | By Gary J. Tulacz
For the past six quarters, survey participants in ENR’s Construction Industry Confidence Index poll have named multi-unit residential as the hottest general-building market. One beneficiary of this surge is Summit Contracting Group Inc. (No. 347).
“There was a huge need for apartments during the recession, but due to the banking industry locking down on lending at that time, the market went stagnant for a few years,” says President Marc Padgett.
As a result, Summit’s revenue dropped, reporting contracting revenue of $58 million in 2010 and $55 million in 2011. This year, Summit is back on the list, showing 2012 revenue of $150 million, almost
all from multi-unit residential.A turnaround in lending has
changed the equation. “Now that lenders are back in the game, we are seeing all types of multifamily projects going up in most areas of the country,” says Padgett.
But Padgett warns that banks are still skittish, saying, “The lenders are much more engaged in the qualification process.” He says that, often, lenders are requiring contractors and subs to obtain bonds. While not unusual, “it appears to be more extreme now,” he says. “We are even seeing the lenders asking for copies of subcontract agreements, which was very rare in the past.”
Apartment Life Is Thriving
RANK2013
REVENUEIN $ MIL.
1 THE TURNER CORP. 6,751.7
2 CLARK GROUP 3,287.7
3 SKANSKA USA 3,068.0
4 WHITING-TURNER CONTRACTING CO. 2,951.0
5 BALFOUR BEATTY US 2,587.5
6 STRUCTURE TONE 2,517.5
7 GILBANE BUILDING CO. 2,496.8
8 MCCARTHY HOLDINGS INC. 2,381.0
9 LEND LEASE 2,205.3
10 TUTOR PERINI CORP. 2,179.3
11 HOFFMAN CONSTRUCTION CO. 2,118.0
12 JE DUNN CONSTRUCTION GROUP 2,111.8
13 BRASFIELD & GORRIE LLC 1,750.0
14 HENSEL PHELPS 1,580.7
15 SUFFOLK CONSTRUCTION CO. INC. 1,345.4
16 MORTENSON CONSTRUCTION 1,265.9
17 THE WALSH GROUP LTD. 1,242.1
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18 DPR CONSTRUCTION 1,239.1
19 SWINERTON INC. 1,213.0
20 MANHATTAN CONSTRUCTION GROUP 1,161.4
21 FLINTCO LLC 1,082.7
22 WALBRIDGE 1,074.7
23 HUNT CONSTRUCTION GROUP INC. 1,046.0
24 THE YATES COS. INC. 1,013.5
25 PEPPER CONSTRUCTION GROUP 937.5
26 BARTON MALOW CO. 904.8
27 VALLEYCREST LANDSCAPE COS. 880.0
28 CLAYCO INC. 872.0
29 M+W U.S. INC. 837.6
30 HITT CONTRACTING INC. 827.4
31 THE WEITZ CO. 789.3
32 DEVCON CONSTRUCTION INC. 779.0
33 DAVID E. HARVEY BUILDERS INC. 769.0
34 JAMES G. DAVIS CONSTRUCTION CORP. 756.2
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35 HATHAWAY DINWIDDIE CONSTRUCTION 751.4
36 CONSIGLI CONSTRUCTION CO. INC. 716.6
37 ADOLFSON & PETERSON CONSTRUCTION 710.2
38 AUSTIN INDUSTRIES 708.0
39 HUNTER ROBERTS CONSTRUCTION 706.7
40 MESSER CONSTRUCTION CO. 701.0
41 SHAWMUT DESIGN AND CONSTRUCTION 679.9
42 OKLAND CONSTRUCTION CO. INC. 671.9
43 KBR 664.0
44 ROBINS & MORTON 655.6
45 KIEWIT CORP. 650.6
46 LECHASE CONSTRUCTION SERVICES LLC 646.4
47 RYAN COS. US INC. 616.9
48 PCL CONSTRUCTION ENTERPRISES INC. 614.3
49 LAYTON CONSTRUCTION CO. INC. 609.9
50 CORE CONSTRUCTION GROUP 604.3
the Patient Protection and Affordable Care Act and the uncertainty of its effect on health-care providers. However, contractors of all types, regardless of what market they serve, have their own concerns about the new health-care law.
Many contractors worry about the potential costs and mandates under the new law. “Costs associated with the required health-care coverage will have to be addressed in the next 12 months,” says Joel Stone, CEO of SpawGlass.
SpawGlass is one of many major contractors that are concerned about the impact of the federal health-care law. “We work both union and non-union, and the law requires us to provide specific levels of cover-age for non-union employees or face penalties,” says Dunn of JE Dunn. He worries that expenses incurred under the law will hurt many contractors.
“But there seems to be new or added levels of re-cord-keeping and compliance requirements,” Levy says. Contractors are working hard to do more with less, squeezing out efficiencies in their processes and investing in technology and equipment to make them-selves more competitive in a tough, hard-bid market, he observes. “We try to chase costs down, only to have federal regulations require us to hire a new wave of compliance officers. In a competitive market, you can’t just pass these costs to the customer,” Levy says.
The construction industry sees positive signs and uncertainties. Contractors continue to plan for the turnaround that is bound to come, seeking new markets and services. But some contractors are looking a little further into the future than others. On April 16, Bechtel announced it had become one of the investors and collaborative partners with Planetary Resources, a group researching the feasibility of mining asteroids. “This is something that is probably 30 years away from being a market, but it is something we are looking at for the future,” says Dudley.
Companies are ranked by construction revenue in 2012 in ($) millions. Those with subsidiaries (†) are listed by company rank, which may be found on the ENR website at www.enr.com. Firms not ranked last year are designated as **. Some markets may not add up to 100% due to omission of the “other” miscel-laneous market category. NA= “not available.”
Figures include prime construction contracts, shares of joint ventures, subcontracts, the construction portion of design-construct contracts and construc-
tion management-at-risk contracts when the firm’s risks are similar to those of a general contractor. Figures also include the value of installed equipment when a firm has prime responsibility for specifying and procuring it within the scope of its construction contract.
General Building includes commercial buildings, offices, stores, educational facilities, government buildings, hospitals, medical facilities, hotels, apartments, housing, etc.
Manufacturing includes auto assembly, electronic assembly, textile plants, etc.
Power includes thermal and hydroelectric power plants, waste-to-energy plants, transmission lines, substations, cogenera-tion plants, etc.
Water Supply includes dams, reservoirs, transmission pipelines, distribution mains, irrigation canals, desalination and potability treatment plants, pumping stations, etc.
Sewerage / Solid Waste includes sanitary and storm sewers, treatment plants, pumping plants, incinerators, industrial waste facilities, etc.
Industrial Process includes pulpand paper mills, steel mills, non-ferrous metal refineries, pharmaceutical plants, chemical plants, food and other
processing plants, etc.
Petroleum includes refineries,petrochemical plants, offshore facilities, pipelines, etc.
Transportation includes airports, bridges, roads, canals, locks, dredging, marine facilities, piers, railroads, tunnels, etc.
Hazardous Waste includes chemical and nuclear waste treatment, asbestos and lead abatement, etc.
Telecommunications includes transmission lines and cabling, towers and antennae, data centers and web hotels, etc.
How to Read the Tables
THE TOP 400 CONTRACTORS OVERVIEW
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The U.S. construction industry is profiting from the shale-gas production boom of the past few years, and its effects go well beyond the Lower 48 and Alaska. Bill Dudley, president of Bechtel (No. 1), says the U.S. gas boom also is influencing the worldwide construction market.
For example, natural-gas prices in the U.S. are about 75% lower than markets in Japan and India. The demand for cheaper U.S. gas means the market for LNG import terminals, particularly in Asia, will surge. For example, GAIL, India’s state-owned gas company, said in January it will double the size of its Dabhol LNG import terminal.
U.S.-based fracking also may affect construction in Canada. Canadian gas producers may be rethinking gas export plans, focusing on the Asian and European markets as export destinations. “Instead of
seeing north-south pipelines in Canada, you may be seeing them going east or west,” Dudley says.
Low prices in the U.S. already are scaring many other gas-producing regions. In February 2012, Russia’s Gazprom was pressured to lower its prices by 10% to European customers, who have the option of importing inexpensive U.S. coal and LNG. In fact, European coal imports from the U.S. have risen 250% since 2005.
The Middle East is starting to focus more on natural resources other than oil and gas, which means more projects in mining and production facilities, particularly aluminum smelters. For example, Ma’aden Saudi Arabian Mining Co. is building a $10.8-billion plant in Saudi Arabia, while Emirates Aluminum is spending $4.5 billion to expand its Abu Dhabi plant.
