Top Specialty Contractor 2013: Suntec Thrives on a Solid Foundation
The construction industry certainly got walloped in the Great Recession. In 2010, unemployment in the industry neared 25%, according to the U.S. Dept. of Labor. The impact was especially pronounced in the Southwest, primarily because of the booms that had marked the region's growth for more than 50 years.
During the downturn, Suntec Concrete, Phoenix, saw its work force trimmed to nearly 250—about a 60% decrease from pre-recession boom times.
But while no one wants to see a downturn, the initiatives and decisions that Suntec management made during those difficult times allowed the company to position itself for even greater success once work was again plentiful. As a result of these achievements, Suntec has been named ENR Southwest's Specialty Contractor of the Year.
According to Suntec, the company took advantage of the slowdown to leverage the power of BIM as an integral part of its work process, thereby making the company much more efficient by increasing the speed and lowering the cost of its services.
"It is something now that our clients use and expect," says Derek Wright, vice president of Suntec. "We get the return on the investment we spend up front by eliminating mistakes and building a better product."
In 2010, before it was apparent that the industry would begin its slow recovery, Suntec took a chance to invest not only in BIM but in the remaining staff that had not been part of earlier layoffs. Jerry Barnier, president, says those two decisions have made all of the difference in helping the company bounce back strongly from the recession.
"We kind of saw 2010 as the plank where we got a chance to go from a recovery to a growth company again," he says. "We talked amongst the ownership group that maybe it is time to draw a line in the sand and invest some money—to not go past this point. We didn't see any changes in the market yet, but we thought we had a great nucleus of talent. "
Rather than cutting wages like some other subcontractors were doing, Suntec asked for more productivity from the staff, which helped position the firm for growth, Barnier says.
"The time we had back then, we used really wisely," he says. "We really improved our technology and our training. We got all of our programs as refined as we thought we could get them." The investment has paid off now that the company's workload has increased dramatically.
Revenue Tells the Story
The numbers bear out the success Suntec has enjoyed since 2010. Three years ago, the company reported $55 million in revenue. That rose to $75 million two years ago and was in excess of $125 million in 2012. The company steadily rose up the ENR Southwest Top Specialty Contractor rankings during that time, jumping from No. 10 to No. 7 in 2011 and to No. 2 for 2012.
As always, the revenue gains were accomplished by the company landing some of the most high-profile concrete projects in the state of Arizona over the past several years. Suntec rarely works outside of the state for logistical and supply reasons.
Much of that recent work was on projects related to Arizona State University and the University of Arizona in downtown Phoenix and Tucson. Of note is the Roosevelt Point Apartments, which consists of two high-rise buildings totaling 357,000 sq ft plus a 149,500-sq-ft parking garage. Suntec performed structural, tilt panel, foundations, finish and flatwork for Phoenix-based Hardison/Downey, the general contractor for the project.
Government work is also a big part of Suntec's portfolio, and in 2012, the company provided structural, foundations, finish and flatwork for Phoenix-based general contractor D.L. Withers on the nearly $100- million facility built to house the Maricopa County Sheriff's Office in downtown Phoenix. Suntec poured 50,200 sq ft of slab-on-grade, 71,680 sq ft of cast in-place deck and 89,000 sq ft of slab-on-deck concrete.
Suntec works extensively in other building sectors too. In 2012, the company worked on the Dick's Sporting Goods distribution facility in Goodyear, Ariz., in the far western portion of the Phoenix metropolitan area. For the 720,000-sq-ft facility, Suntec performed tilt panel, foundations, finish and flatwork. Also included in the work was a 100,000-sq-ft equipment mezzanine and 850,000 sq ft of exterior concrete paving.
In Phase 2 of the CityScape project in downtown Phoenix, Suntec worked on a high-rise that features the Hotel Palomar Phoenix by Kimpton. The boutique hotel opened last summer but was a project that will be long remembered, according to Barnier and Wright.
"It was an intense schedule, and they came back to us for three different stages of it. Built in the bottom of the market, it is now the centerpiece of downtown," Barnier says.
The hallmark of every good business—and a necessity for a construction outfit that has been operating in the same area for more than 28 years—is satisfying customers so that they remain clients when the next job comes along.
"There is no substitute for having repeat clients," Wright says.
The company's success in retaining clients is due to the value of the people that perform the jobs, from the owners to the tradespeople still in training, according to Wright.
"The underlying seed to the whole thing is the culture of people," Wright says. Building better buildings and having better people—that culture has fostered a huge amount of growth."
Old Issues, New Solutions
Contrary to some industry reports that there is a shortage of construction workers in the market, Barnier says that while the new people they are adding to the payroll these days may not have as much experience in the trade, they are better able to handle the technical aspects of the job.
"It blows my mind to think of the great talent level out there," he adds. "They may not be totally skilled, but there is a talent level that has huge potential walking in the door, and we are amazed. As much as people complain that there are no people out there, we wonder, 'What are they looking at?'"
Suntec has an in-house training program for all employees along with a state of Arizona-accredited carpenter and cement mason apprentice program. Suntec also requires all employees to complete 30 hours of OSHA training within the first six months of their employment since statistics show safety issues are much more prevalent among inexperienced tradespeople. Barnier says requiring such a substantial level of safety training to incoming workers has had a direct and powerful impact on the company's current experience modification ratio of 0.58, which indicates that the firm's safety performance is better than the industry average.
"A large percentage of accidents come from when someone is new to the job," Barnier says. "Everybody has to reach OSHA 30 by the time they are here six months. There is an expense, but it pays dividends. It gives people the tools they need to be safe."
The company has also implemented a system by which all Suntec employees on jobsites have their names on their helmets in order to make connections easier. And in the pursuit of an incident-free jobsite, everyone who is new to a Suntec job—which in some cases means workers who have not yet completed their OSHA 30 training—wears a uniquely colored hard hat. Wright says knowing who is more likely to get injured helps the experienced tradespeople watch over them, and that their approach contributes greatly to cutting down on safety risks and accidents.
"It allows us to have guys in spots that are appropriate to their skills and experience," Wright says.
While the company takes all of the steps necessary to succeed as a business, Wright says it is important never to forget the big picture.
