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Tough Cleanup Missions Never Impossible for Knoxville, Tenn.-based Heavy Civil Contractor

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Photo by Patrick Murphy-Racey
Father and son, Ted Phillips Sr. and Teddy Jr., transformed a small Tennessee land-clearing business into a national civil-contracting powerhouse that counts the Tennessee Valley Authority among its oldest clients.
Photo Courtesy of Phillips & Jordan
Phillips & Jordan's 1,000-piece equipment fleet, including 150 dozers, 125 excavators and 75 loaders, enables the company to self-perform up to 80% of its work.
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Phillips & Jordan Inc. is a family-run, Knoxville, Tenn.-based civil contractor that tackles the country's toughest, most prominent and riskiest jobs, including emergency response and disaster cleanup from hurricanes, tornadoes and floods.

The 62-year-old, privately held P&J shuns the public spotlight but has thrived on the most high-profile of projects.

The firm anticipates $300 million in revenue in 2014, with 30% to 40% gains in 2015 and 2016, aided by client partnering and repeat business with few bid protests and lawsuits, says firm President J. Patrick McMullen.

World Trade Center

P&J oversaw forensic recovery and debris disposal at the World Trade Center in New York City after the 9/11 attack in 2001. The project consisted of coordinating with Staten Island's 2,200-acre Fresh Kills landfill as well as a 43,600-person workforce, 16 government agencies and four subcontractors.

The company spent 1.7 million man-hours removing and processing 1.4 million tons of debris, including evidence and body parts that helped identify 239 victims. Early job estimates called for $125 million over two years, but P&J finished the work  within 321 days for $63 million by segregating and simplifying the workflow.

"[The Army Corps of Engineers] was overwhelmed with the amount of debris as well as the number of contractors coming in and telling them they had the solution. They were looking for someone to turn down the noise in their ears so they could do their job," says Ben R. Turner, former P&J president and CEO, who stepped down in 2013, after 19 years. "We took something that was in disarray and had it running like a finely tuned machine."

P&J was the rare non-New York-area firm with a major cleanup role, partly due to its Hurricane Andrew cleanup experience in 1992.

P&J created picking stations that placed debris waist-high on conveyor belts, thereby reducing fatigue level and increasing productivity. There were also evidence facilities, a mess hall and hygiene stations, plus greenhouse structures that kept workers warm and dry. The Corps honored the company as its national contractor of the year in 2002 and asked the firm to develop a federal debris-management guide for future similar events, says Turner.

The Corps tapped P&J three years later to clean up after Hurricanes Katrina and Rita battered the Gulf Coast. The 24-month project removed, sorted and recycled 10.7 million cu yd of debris while performing 1,200 demolitions and repairs of damaged levees in hard-hit areas of New Orleans.

"We thrive on challenges. We were built upon successful completion of impossible jobs, literally innovating our way through obstacles," says McMullen. "We have been trained by decades of tough, demanding work across the country."

The Tennessee Valley Authority—a six-decade P&J client—hired the firm to clean up its Kingston, Tenn., powerplant after a 2008 dike rupture sent 1.1 billion gallons of coal-ash slurry across 300 acres and into the Emory River. The contractor disposed of the material at the Arrowhead Landfill in Uniontown, Ala., using a custom rail transportation system that required rail cars to be washed and decontaminated after each trip. Completed in 2010, the $95-million project dispatched 39,760 cars to remove 4 million tons of coal-ash slurry.

P&J also managed more than 700 workers for Mississippi and Florida waterway skimming and shore and offshore cleanup after BP Deepwater Horizon's giant oil spill in the Gulf of Mexico in 2010. A year later, the firm removed and disposed of 1.1 million cu yd of debris from a 200-mph tornado that carved a 1-mile-wide, 6-mile-long path through Joplin, Mo.

Hired by another longtime Southern client, Charlotte, N.C.-based Duke Energy, after a high-profile coal-ash-pond spill into the Dan River earlier this year, P&J used barge-mounted vacuum dredging to remove 2,500 tons of ash spewed by the rupture of a 48-in. stormwater pipe at the utility's retired Dan River Steam Station in Eden, N.C.

"No two emergencies are ever the same," says company CEO William T. "Teddy" Phillips Jr. "You build upon past experience, learning something new each time, and develop a body of knowledge."

Strategic Tracking

In 2011, P&J created and implemented an in-house automated debris-management system called STORM, or "strategic tracking of recovery material," for emergency-response work. It streamlines project tracking, reporting and reconciliation using a web-based software system that is compatible with smartphones and handheld devices.

The software system captures, records and measures data such as time and date, worker and subcontractor, equipment and trucks, and type and quantity of waste. STORM relies upon photos, bar-code scans and satellite tracking for accurate, real-time progress reports, with data easily exported into spreadsheets.

"We understand the production rates, quantities and environmental factors. We bring more of a construction-management model to disaster recovery," McMullen says. "We are accustomed to going someplace else to work for long periods of time."

Licensed in all 50 states and specializing in negotiated, prime-contracting, P&J has thousands of prequalified, experienced subcontractors that can mobilize 24/7 after disasters.

The contractor has emergency-response contracts with scores of U.S. municipalities. P&J executives lectured on urban disaster cleanup at Harvard University in 2012. "P&J is technically savvy and understands the risks," says Ron Oakley, a former board member who now is chief operating officer of contractor M+W U.S. Inc. "They know where to get support and which subs are good."

More Markets

Emergency response is only one piece of P&J's revenue. Work also includes underground utility installation, erosion control, storm drainage and landfill management. The company will record an estimated 2.5 million man-hours of work in 2014 in markets that include power, energy, oil and gas, heavy civil and transportation.

The contractor self-performs up to 80% of its work, with a 1,000-piece equipment fleet and 1,000-person labor force across nine offices in seven states. "We're often on the ground floor of projects, instead of doing hard bids and requests for proposals," says Phillips. "We're always up for stuff that other people don't want to do. And we often work in remote rural areas without any infrastructure."

Much of P&J's work still revolves around earth moving and land clearing. Last year, it replaced a 200-ft section of U.S. 441 that was wiped out by a landslide in Great Smoky Mountains National Park. The $4-million project in North Carolina excavated 27,000 cu yd and filled the area with 40,000 cu yd of crushed stone, sandwiched in 1.5-ft layers between geogrid.

P&J has launched several side businesses, including a joint venture with North Creek Energy called Solar Jack LLC to market a solar-enhanced, variable-speed system that allows oil producers to capture regenerated energy from pump jacks. It cuts maintenance costs by 75% and power usage by 55%, the company claims.

The firm also partnered with the Siboney Group and PBA Holdings in the Hydrozonix LLC venture, a mobile water-treatment service for oil-and-gas exploration.

The chemical-free process is contained in a trailer that uses advanced oxidation through ozonation, hydrodynamic cavitation, acoustic cavitation and electro-chemistry. The system can treat 80 barrels per minute during live fracturing operations  as well as during post-frac flowback. Turner now is president of Hydrozonix.

Business diversity helps P&J maintain a debt-to-equity ratio of 0.5, with a $500-million bonding capacity. The firm's strong financials are partly due to its management software, which unifies and organizes accounting data, including contracts, payroll, job costs and accounts payable, while providing online cost management support to regional offices.

P&J additionally has a captive insurance program with similarly minded-contractors, such as Williams Brothers Construction Co. Inc., Houston, which "has paid huge dividends after high premiums and exclusions had hurt business," says McMullen.

P&J's largest dividends may come from a loyal and experienced management team composed of 25- and 30-year company employees. "We don't really lose people," says Ronnie Jordan, vice president of business development. "People are treated really well here. And they enjoy what they do."

Retention could be due partly to a close-knit family atmosphere. Jordan is the nephew of co-founder Ted Jordan. Phillips Jr. began working for the company in third grade. His father, William T. "Ted" Phillips Sr., now 83, remains company chairman. A native of Robbinsville, N.C., Phillips Sr. started the land-clearing business with Jordan in 1952.

An aviator, Ted gained a competitive edge by surveying clearing jobs by plane, according to Oakley. He was also one of the first to embrace GPS on equipment.

The company evolved and grew, going public in 1970, after selling to Kanab Services. Phillips Sr. bought it back in 1985.

"We had gotten away from our core strengths. We refocused on being strictly a civil contractor," says Phillips Jr., who returned to the company after the buyback.

"We just can't say no when people want our services. When the recession hit, our private work dried up, and we concentrated our core business on the markets that will be thriving for the next three to five years."



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