Tech Savvy

For many, building information modeling is a key means of cutting the waste out of the construction process. “If you are not fully proficient in [BIM], you are way behind,” says Dean. He says the first phase was to show that BIM actually worked in the construction process. The industry is now in a second phase, in which practical improvements are being implemented on a regular basis. “It's not just a clash-detection tool anymore,” Dean says.

Because BIM is becoming the price of entry on many projects, more firms are getting into the game. “BIM has been a real differentiator for us, but we are seeing more firms develop expertise, and that is leveling the playing field,” says Lynch.

However, BIM is not a cure-all. “The biggest challenge is knowing where and when to apply BIM to make sure that the maximum benefit from the technology is derived relative to the cost of implementation,” says John Boncher, CEO of Cupertino Electric.

BIM does contribute benefits, including more detailed and flexible designs that can be used in prefabricated and modular construction. “Prefabrication is clearly the future of construction,” Cannon. “Nearly every hospital project we're working on today has prefabricated headwalls, corridor racks and bathrooms,” says Cannon of KHS&S. The firm also has invested in the lean manufacturing of prefabricated bathroom pods from Eggrock Modular Solutions, he says.

Many contractors believe prefabrication is a natural outgrowth of improved design and project delivery technology. “BIM and lean construction principles are forcing us to think more about smarter processes,” says Bacon of Limbach. The firm recently launched an off-site assembling and racking process and is building chiller plants and boilers off-site. “This recession has been the tipping point for wide-scale implementation of processes we have been developing for the past 10 years,” he says.

Mobile technology also is making a significant impact on jobsites looking for better margins and an edge. “It is common for our superintendents and project managers to use tablet computers on the jobsites,” says Cannon. “We've found mobile technology has been a great way to increase efficiency in the field.”

Dean says the new tablet technology is fine for what it is. “It is like a clipboard containing any kind of information you need. But in the end, it is still a clipboard.” $ather than trying to read drawings on a 9-in. x 9-in. screen, it would be better to integrate tablet technology with 48-in. plasma-screen Smart Boards for use in any trailer, he says.

Labor Pains

Many union firms are worried about increasing inroads by non-union firms in this price-driven market. “It's no secret that some recent labor agreements have pushed personnel costs higher, resulting in increased overall project costs,” says State of LVI. “With recessionary fiscal pressures, it certainly makes it more difficult for clients to meet project expectations within budget constraints.”

E-J Electric's Mann worries about the fate of union contractors in New York. He sees union contractors losing jobs to non-union firms in New York. While most are not projects that require high levels of expertise, some are large-scale jobs. “We bid on work on the new Chelsea Piers project in Stamford, Conn., but lost to a non-union company. The unions have to work with us to continue to stay competitive to win work for their members,” he says.

However, many contractors say the unions have been accommodating the needs of union contractors. “The unions in St. Louis have been very good, not just on wages but on work rules,” says Vitale. “They want us to succeed as much as we want to.”

Looking Afar for New Work

Some larger specialty contractors and those with special expertise are looking at the international market for new work. For example, Zahner is looking at doing more work abroad. “ In the near term, we see the local market [drying] up. We see our national market [tightening]. We see the international market expanding,” says L. William Zahner, CEO.

“I see a lot more subcontractors kicking the tires of the international market,” says Dean. He says that top-tier subs are beginning to believe they can't depend solely on the U.S. market. His firm does about $75 million to $100 million in international work, mostly for the U.S. State Dept. and the Dept. of Defense. He says, “This gives us a stepping-off point to expand our international work for other clients abroad.”

Another firm beginning to make its mark in the international market is Pike Electric. In September 2010, it announced its first international power-line project. “We are currently working in Tanzania on 2,000 miles of engineering and 500 miles of electric-distribution construction worth an estimated $18 million,” says Frank Milano, vice president of investor relations. Completion is expected in December 2012.

With the market down over the past three years, specialty contractors and subcontractors are feeling the pinch. However, the revenue figures for the Top 600 are about what they were in 2006, which was considered a good year for construction.

Dan Thomas, president of F.D. Thomas Inc., puts the market in perspective, noting, “Even with a slowdown of work that we see today, there is still a very large volume of work to bid.”

Firms that invest in estimating and management skills find new ways to bid successfully, he says. “[A subcontractor that] understands the cost to put work in place combined with the markup needed to meet overhead, all the while being competitive, survives,” says Thomas.