... of trains, forcing them to upgrade track and grades. “There were a lot of rail projects that were in the pipeline that are coming on line now,” he says, adding that big rail carriers fund their projects principally through earnings. A credit crunch may slow the market a little, but not depress it, he believes.

Industrious Acquisitions

Many contractors believe the energy markets will be the least affected by a downturn because demand for oil and power will continue. Several firms on the Top 600 have moved into the industrial market as the buildings market wavered. EMCOR late last year acquired Ohmstede Ltd., a Beaumont, Texas-based industrial and refinery services contractor and heat-exchanger specialist, and earlier this year acquired Redman Equipment & Manufacturing Co., a Torrance, Calif.-based heat-exchanger manufacturer and service provider to the refinery market. “With these two acquisitions, we now service both the Gulf Coast and the California refinery markets,” says Tony Guzzi, president and chief operating officer of EMCOR Group.

Quanta Services

CECO also has made inroads into the industrial sector, acquiring Bo-Mac Contractors Ltd., a Beaumont, Texas-based piling and marine contractor, and CONEX International, a mechanical and industrial services firm working in the refinery market. “Two years ago, we saw a fall-off in the commercial markets and decided to move into the industrial market,” Schuster says of the acquisitions.

Barnhart Crane & Rigging also is growing. Last month it acquired Middletown, Conn.-based Marino Crane. Unlike investor-owned industrial service firms, “we are staunchly independent and our owners are fully engaged in the business,” says Latture. He says the firm continues to look for acquisitions to extend its geographic range.

Ferguson Mechanical

Power is another sector that may weather the storm. “We haven’t seen any affects of the credit crunch yet,” says Bill Koertner, CEO of MYR Group. He notes that utilities have invested heavily in the infrastructure of the power grid and projects coming on line are fully financed. If there is a problem in the transmission and distribution market, it is in alternative energy programs. “Wind farms in particular are very dependent on the credit markets,” he says.

One concern in the transmission and distribution market is the interest by some clients in engineer-procure-construct project delivery. “There has been a push recently to explore the EPC concept,” says Mulhern. But he says the great number of permitting and environmental requirements prohibits a contractor from accurately bidding EPC work.

Alternative energy projects are going to become more prevalent in the Pacific Northwest. “Washington recently enacted Initiative 937 that requires 25% of new power generation to come from green sources, and prohibits any new coal-fired generating plants,” says Harris of JH Kelly. That means new capacity will be principally from gas-fired plants or wind power, he says.

Bidding Wars

Many specialty contractors complain that competition is getting tough as firms scramble for backlog in case of a severe downturn in business. “We attended a pre-bid conference for a hospital job and there were 18 steel guys there. We won’t be bidding on that job,” says Brown of Ben Hur.

This push to stockpile backlog has put pressure on margins. “One of our major competitors saw the private sector downturn and is now going out bidding on everything at prices we can’t understand and won’t match,” says John D’Amario, vice president of sales for Architectural Glass & Aluminum. He also says a lot of smaller, newer competitors are feeling the pressure and may falter.

“There’s a lot of firms out there trying to hold on, buying work,” says Suder of KHS&S. He says this practice hurts everyone. “We can’t control the economy, but we can control the way we operate,” he says. “An awful lot of capacity in the industry is going to be lost in the next couple years. Firms that are smart will come out stronger when the market turns around.”

For many contractors, bidding for any work rather than for a reasonable profit is a recipe for disaster. “My grandfather founded this company and taught us all that there are a lot of ways to go bust in the industry,” says Brown. “There’s no point in giving the grim reaper a leg up by making stupid bids.”

Practical Green

The move toward green and sustainable buildings has given many specialty contractors a boost. “The biggest problem is to find enough energy engineers and certified energy managers,” says Brunk of Siemens. “Students coming out of schools with an engineering degree with some energy background can write their own ticket,” including those from all first and second-tier engineering schools, not just elite programs, he says.

Desert Commercial Concrete/Drew Erickson

A few years ago, concepts like carbon footprints were alien. “Now, with the price of energy, we are talking real dollars,” says Charlie Bacon, CEO of Limbach Facilities Services. He says many clients are looking beyond just control systems in energy retrofits to windows and building skins, among other systems, to guarantee greater energy savings.

Some specialty contractors are using technology to enhance productivity. “We’ve teamed with general contractors on bids for a long time,” says Bacon. But with integrated project delivery incorporating building information modeling, the major subcontractors are becoming full partners in the building process. “Customers increasingly are talking about a more efficient process, and BIM offers an opportunity not only for greater efficiency, but allows risk to be better defined early on,” he says.

EAS Contracting

BIM and 3-D and 4-D CAD have helped specialty contractors in a number of ways. “We are pushing architects and general contractors to take advantage of BIM,” says Wachter’s Price. He says 3-D and 4-D CAD are great for helping clients visualize facilities beforehand, and also helps supervisors and workers visualize connections. In absence of CAD files, Price says Wachter will digitize drawings to understand what equipment and fixtures will be required on a room-by-room basis. “That way, we know what we will need and be able to provide a ‘room in a box,’ with everything our people need to complete each room,” he says. “It is a real boost to efficiency.”

Brunk of Siemens says equipping all engineers and technicians with laptops and all field people with PDAs has increased efficiency and cut paperwork and confusion tremendously. “We sell automation to our customers and we are benefiting from it ourselves,” he says.

But Brunk acknowledges the speed of technology and pressure on productivity have taken something from the industry. “This is a relationship business,” he says. “I’ve heard general contractors complain that the only time they see us is when there’s a big project pending. We all used to meet in plan rooms and just chat. Now it’s all...