KCI Technologies Named Design Firm of the Year
Terry Neimeyer was vacationing on the Outer Banks of North Carolina when Hurricane Diana devastated the region in 1984. Neimeyer, then executive vice president of the consulting engineering firm now known as KCI Technologies Inc., was impressed to see a travel companion charting the hurricane’s path with a personal computer and spreadsheet software Lotus 1-2-3. “I thought to myself, ‘Gosh, this thing is just going to revolutionize word processing, spreadsheets and engineering,’” says Neimeyer, who now is KCI’s CEO.
Neimeyer’s epiphany led the multidisciplined firm to a new focus on advanced technology. KCI invested in PCs to replace existing “dumb terminals” connected to a VAX mainframe “the size of most people’s bedrooms,” Neimeyer says. The move positioned KCI well for the modern era of CAD, born in 1987 with the groundbreaking 3D program called Pro/ENGINEER. The firm also had the foresight to rename itself KCI Technologies in 1991, a few years before the tech boom.
The Sparks, Md.-based company has aimed to keep pace with emerging technologies ever since, not only because the market demands it, but because technologies have given public-sector clients more bang for their limited bucks. KCI was among the first firms in the region to design fiber-optic cabling and server infrastructure for telecommunications and broadband networks. Two decades ago, KCI started a geographic information systems group for spatial and geographic data management that has evolved into programming, asset management and environmental compliance. The firm continues to try to stay ahead of the technological curve. In one notable step, KCI has established an innovation incubator program in which employees pitch ideas for new endeavors for the firm to pursue.
In addition, KCI replaces all of its computers every three years to handle software upgrades more effectively. It also uses drones for surveying and laser scanners to collect massive amounts of data, and it develops its own mobile apps to maximize efficiencies in the field. Neimeyer says investing in technology is “a marathon” that management needs to focus on, even during economic recessions.
That long view has paid off. KCI enjoyed an unprecedented 20.1% jump in regional revenue in 2016 to $134 million, climbing to No. 9 in ENR MidAtlantic’s Top Design Firm ranking from No. 13 the year before. KCI was also the 75th-ranked firm on ENR’s national Top 500 Design Firm list this year, up from No. 77 in 2016. The firm’s regional growth has come entirely from internal expansion, not acquisitions.
The transportation sector makes up 36% of KCI’s MidAtlantic work, while utilities account for another 36%. With 15 offices in the region, the firm’s remaining work comes from water supply and wastewater treatment (16%), site facilities (8%) and energy (4%).
The firm is active in its communities. In 2016, KCI supported more than 100 community and nonprofit organizations. Each fall the staff selects a charity for which it will raise funds during the year. Among those organizations are the Make-a-Wish Foundation, Ronald McDonald House and Habitat for Humanity.
KCI also supports local charities such as the Maryland STEM Festival and an indoor golf tournament for the American Society of Civil Engineers.
For these reasons, and more, ENR MidAtlantic has chosen KCI Technologies as its 2017 Design Firm of the Year.
The 100% employee-owned firm recently added 100 workers in the MidAtlantic market, bringing the regional total to 807. Approximately 85% of the KCI’s business comes from repeat clients, and its yearend 2016 under-contract backlog was up by 35% from the previous year. President Nate Beil says clients trust KCI to complete projects to the best of its ability. “And we’ve had a tremendous reputation of doing that well,” he adds. “But it’s not just winning the work, you then must execute, and you must execute well.”
One of KCI’s long-term clients is Prince George’s County, Md. The firm has carried out countless projects for the county during a more than 25-year, open-ended contract. Unmesh Patel, a project manager for the county’s Dept. of Public Works and Transportation, says KCI was on site within hours of a 2014 landslide that forced the evacuation of 28 homes. The firm investigated the failure’s cause, designed temporary and permanent solutions and managed the $11-million, two-year project. “They knew our needs and our goals to get it achieved on time,” Patel says. “There were no ifs, ands and buts.”
Founded in 1955 as Matz Childs and Associates in the Baltimore County basement of one of the firm’s co-founders, KCI was acquired by industrial products conglomerate Walter Kidde & Co. in 1977.
The firm was renamed Kidde Consultants Inc., or KCI, after being combined with three other architecture and engineering firms. After KCI expanded throughout Maryland, Delaware, Virginia and Pennsylvania in the 1980s, the British company Hanson Trust PLC purchased Kidde in 1987. When Hanson threatened to sell KCI if it didn’t meet stringent revenue goals, KCI’s six top executives, including Neimeyer, launched an employee buyout.
The $16-million buyout was completed in 1988 during the savings-and-loan crisis that submarined private capital markets. With about 80% of KCI’s work coming from the private sector, KCI downsized to 350 employees by 1993.
Saddled with debt from the buyout, KCI worked toward a goal of performing 80% of its work in the public sector and was debt-free by 1996. Today KCI is one of Maryland’s largest employee-owned companies with 1,400 total workers in 39 offices nationwide. KCI stock is worth $32,000 per share, compared with $1,000 a share at the time of the buyout. “We’ve made millionaires out of surveyors,” Neimeyer says.
Many employees, including Neimeyer, joined KCI out of college. The firm has more than 20 interns this summer and hires about a half-dozen students each year for a full-time co-op rotational program that KCI says is unusual among engineering firms. The program allows students to complete four three-month rotations among the firm’s different disciplines and offices. After the rotations, co-op students typically pick a discipline to join as a full-time employee.
In 2008, KCI started a subsidiary construction company to build telecommunications and fiber optics networks because the clients for which they designed such networks constantly asked for turnkey solutions.
KCI also owns a North Carolina-based construction company for stream restoration and wetland creation projects. KCI plans to expand those services into Maryland in the next three years, along with increasing transportation, utilities and wastewater engineering services in Pennsylvania and Virginia.
KCI also encourages employees to develop business plans for new service lines, technologies or process improvements. Under a plan launched 18 months ago, employees pitch proposals to a panel of executives. Selected proposals receive a modest budget and some coaching.
One plan, submitted by Amy Lambert, director of corporate communications, aims to create a GIS for each of the firm’s projects nationwide. She is enlisting a team of five geospatial analyst interns this summer who will pull data from 11,000 projects the firm worked on last year. They also will collect location information for all new projects. Lambert says the completed tool will analyze market changes and trends geographically to allow project managers to “quickly determine if KCI has pre-existing knowledge of a site or corridor and if that information could be used to better serve our clients.”
The firm’s reputation for innovation predates the innovation incubator’s launch. For example, KCI created a smartphone app that allows workers in Baltimore’s water and wastewater facilities agencies to locate pipes and valves in the field without pulling drawings. “It allows us to do more infrastructure work for the same amount of money,” Beil says.
The firm’s geospatial solutions practice also recently created a mobile app to file daily inspection reports from remote field locations. The app downloads the report to clients in near real time, allowing them “to make a better decision,” Beil says. KCI is also using an app to manage nearly 2,000 daily reports for the Route 404 project in Maryland. KCI is providing construction management and inspection services for the $160-million project.
Taking the forward-looking approach a step further, KCI in January tapped longtime employee Tom Sprehe as its first director of innovation and technology. Tasked with finding and implementing three new technologies per year, Sprehe is focusing on autonomous vehicles, “smart cities,” big data and the “internet of things.” He’s also seeking ways to remove some of the vast amounts of plastic accumulating in oceans. Sprehe says devising “solutions to problems of the future reflects KCI’s commitment both to grow and to be ready for what lies ahead.”