Top Subcontractors

Tracking the Leading Firms in the Specialty Marketplace

Finding a niche and building a reputation for quality is keeping New York-area specialty contractors busy. See this year's Top Specialty Contractor rankings in the pages that follow.

by Debra Wood

Business remains brisk throughout the region for many specialty contractors, and the overall strong construction marketplace continues to trickle contracts to smaller niche players.

New York City, parts of Upstate New York, and Connecticut's metropolitan areas are all strong, say subcontractors and directors of regional associations. New Jersey appears to present a tougher bargain, according to subcontractors there.

Meanwhile, certain specialty sectors such as heat insulation and fire-stopping are going strong but electrical, a more traditional subcontractor segment, has contractors that say they're not busy enough.

The current market is robust, said David Schwalm, executive vice president of JPW Riggers and Erectors of Syracuse, N.Y., and president of the Subcontractors Association of Central New York in Fayetteville. He said crane rentals and rigging are the most active in 40 years.

"Things are flat out busy," he added. "Other trades are busy, too. It's right down the line, and it's staying strong."

Along with rigging jobs for industrial clients, JPW rents cranes and is booked for the next couple of years, Schwalm said.

JPW also is branching into the unloading of parts for windmill erection, using its cranes to handle the 131-ft. blades and tower pieces weighing up to 85,000 lb. It is handling more than 2,000 shipments of windmill parts in Upstate New York on projects such as the 200-windmill Maple Ridge Wind Farm in Lewis County for PPM Energy of Portland, Ore., and Horizon Wind Energy of Houston, a job on which JPW is a subcontractor to Lone Star Transportation of Fort Worth, Texas.

The three-state region overall has plenty of activity and should stay that way for a while, said Tony Guzzi, president of EMCOR Group of Norwalk, Conn. The firm has various subcontractor affiliates in the mechanical and electrical trades, as well as in energy infrastructure and building system work, all of which focus on contracts that last less than a year.

"Overall, the market is still pretty strong, and there's a good amount of work out there and the right kind of work," Guzzi added. "There's a lot that's going to go on here in the next couple of years, and people are fairly selective about what they want to participate in."

One notable trend is owners retrofitting HVAC systems to make them more energy efficient, Guzzi said. He said he also expects the health care, financial, and infrastructure segments to remain strong.

In Connecticut, both public and private sector work is plentiful, said John Farnham, executive director of the Associated General Contractors of Connecticut and Connecticut Construction Industries Association, both based in Wethersfield.

He said that subcontractors can look forward to work from a $785 million public school construction package the state Legislature recently passed and the University of Connecticut's new $1.2 billion, 10-year construction program.

On the private side, he said that Preston, Conn., voters approved construction of Utopia, a $1.6 billion movie studio and theme park. Meanwhile, Fairfield Metro Center, an office, hotel, and retail development with a new Metro North commuter rail station, is set to break ground later this year.

"It's pretty good right now, in all of the metro areas," Farnham said. "A lot of projects are coming in and a lot of stuff is starting."

One sector that may not be keeping pace with the overall market across the region is electrical, though the jury is out on whether the problem is a lack of work or simply too many contractors vying for it.

Some electrical firms are thriving. Barrier Electric of Bayonne, N.J., is busier than ever, having found a niche renovating and upgrading security systems for N.J. Transit and the Port Authority of New York and New Jersey. It also builds solar panel systems for schools, said Rich Cirminello, a vice president.

Barrier focuses on longer-term assignments that involve work at multiple sites.

"I don't see it slowing down any time soon, and with the kind of work we do, the economy doesn't affect it," said John Barrier, president of the company. "The solar panels are really going to take off."

Other electrical contractors see a bleaker picture, even if their firms have some of the work. While E-J Electric Installation of Long Island City, N.Y., holds the electrical contracts for two major Midtown Manhattan office projects - the $1 billion One Bryant Park tower for Bank of America and an $850 million tower that will house the New York Times Co. headquarters and speculative office space - this year is slow overall, said Bob Mann, the company's chairman and CEO.

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"New York is booming," he added. "The only problem is electrical is not busy. There are 4,000 electricians out of work, on the bench. It's unbelievable with the boom of work."

Mann said he was citing workforce statistics provided in a report by the International Brotherhood of Electrical Workers Local 3 in Flushing, N.Y. The figures include furloughed electricians.

Mann also said that as copper prices rise, the company has not been successful in negotiating escalation clauses. As a result, it buys copper the day it receives a job in an attempt to hold the price.

Electrical contractors also face hurdles in New Jersey, said Robert Meyer, president of the American Subcontractors Association of New Jersey in Edison and senior project manager at Allan-Briteway Electrical Contractors of Whippany, N.J.

"The electrical subcontractors are still struggling," he added. "Competition is very fierce."

New Jersey is facing an uneven stretch with a slower construction pace in its core manufacturing and pharmaceutical sectors, Meyer said. While multifamily residential and some public projects have kept electricians busy, he said the inability to change or negotiate contracts with public agencies, such as the New Jersey Schools Construction Corp., New Jersey Transit, or the New Jersey Highway Authority, has led to a squeeze as material prices have risen, with some firms losing money on their jobs.

"We've been taken over the coals," he said.

Meyer added that some subcontractors are successfully pursuing design-build projects and negotiated work - an alternative to joining the fray for hard-bid jobs.

Another tactic subcontractors are using to stay busy is to find a niche. That has been the ticket to a strong period for Thomas J. Donnelly Inc. of Shoreham, N.Y., a heat insulation installer specializing in systems requiring metal jacketing, which it also fabricates out of aluminum and stainless steel. Those systems are typically used at water pollution control plants in large, multi-year projects.

"There's been a very large demand to upgrade and improve [water pollution control] facilities," said Donald Donnelly Jr., president of the firm. "We're on our way to being extremely busy."

About six years ago, Donnelly also entered the fire-stopping business. While many trades apply fire protection systems to their own work, Donnelly envisions that the specialized process will become a single-source contract.

"We started to bid out fire-stopping, and it just exploded," he added. "Last year, fire-stop contracts represented 32 percent of our annual revenues."

Firestop Solutions of Bohemia, N.Y., also has experienced business growth, said Peter Schmidt, an account executive. About 70 percent of the company's projects involve new construction, evenly split between public and private owners, while the other 30 percent involves retrofit jobs.

"We're at the point where we see more opportunities than we can handle," he said. "I don't think it's going to drop off."

With many major projects still on the boards for the coming years, most subcontractors remain upbeat or cautiously optimistic. But rising material and labor costs and interest rates loom as clouds on the horizon, Guzzi said.

"Because of material price increases, [owners] are reacting with sticker shock for construction projects and retrofits," he added. "The more that happens, the more it has the ability to chill the market."