O'Connell Eyes New Regions for Further Growth
At 103 years old, O'Connell Electric Co. has worked in every industry sector while staying close to its upper New York state home base. But with robust growth in certain markets, the firm is preparing to branch out as it eyes opportunities beyond its usual borders.
"We're very close to acquiring a contractor in the Albany, N.Y., metro area and moving into its building to open a new office there," says Victor E. Salerno, who has been at the firm for 43 years and has been its CEO for the last eight. He would not provide further details but said he expected to do a deal shortly. "This will allow us to expand out and do work in New England," Salerno says. "That's our primary focus."
The electrical contractor, which was formed in 1911 by John O'Connell and sold to Walter Parkes in 1968, covers electrical construction, power lines and substations, communications, transportation, renewable energy, service and maintenance, technical services, natural gas, security integration and temperature control. O'Connell's solar division is the only unit of the firm that serves both commercial and residential customers. With 500 employees primarily in the state, the Victor, N.Y.-based firm has offices in Buffalo, Rochester and Syracuse.
While it retained its No. 6 ranking in ENR New York's latest list of top specialty contractors, O'Connell grew its 2013 regional revenue by about $3 million, to $120.72 million. It has maintained steady growth since 2011 and has been ranked among the region's top 10 specialty firms for the past five years. Salerno says the recent revenue growth spurt is largely due to increased work in the power and higher education markets.
"Our growth was primarily organic, with general increases in all of our market segments," Salerno says. He adds that the firm makes sure it has "proprietary systems and procedures in place such as monitoring costs and labor." It also aims to increase productivity by investing in technology, such as BIM, and through its Rochester-based prefab manufacturing site. At the shop, parts such as electrical boxes and conduit racks are assembled and shipped to the jobsite where they can be quickly installed, Salerno says.
He says the firm has seen "exponential growth" in using the prefab approach. "It makes us more competitive in the bid process," Salerno says. "Whenever we can, we factor in all of the labor and cost savings from utilizing our prefabrication process." Salerno adds that it saves on labor, time, reduces material waste, boosts quality control and improves collaboration among firm units, field crews and the prefabrication shop.
Those features combined with O'Connell's community outreach, attention to safety, its roster of projects and long-standing client relationships led to the firm being named ENR New York's Specialty Contractor of the Year for 2014.
Salerno says that one of the firm's strong points that give it a competitive edge is bonding capacity in excess of $200 million. "A lot of public works projects require a performance and payment bond, which is like a guarantee to the owner," he says. "If you don't have that, there are a lot of projects you won't be able to bid on." That bonding capacity has opened the door for O'Connell on many public and private projects, including maintenance, distribution and substation work for utilities National Grid and Rochester Gas & Electric.
Work under way in the power sector includes O'Connell's largest project to break ground this year—National Grid's $17-million Five Mile Substation in Humphrey, N.Y. The project is set for completion in 2015. The firm also recently completed work on the $9.6-million Stony Creek 59 Tower Wind Farm Substation project in Orangeville, N.Y., as well as the $5-million Clay-Dewitt substation project in Syracuse.
Education is another major growth driver for the firm. "It's been robust for higher education," Salerno says. O'Connell is involved in projects that include the new $7-million School of Law building at Syracuse University; the $2.5-million University of Buffalo Science Center; and the $5-million State University of New York Fredonia Science & Technology Building.