Big and Getting Bigger

Archer Western Contractors is Growing, Especially in Florida's Highway Market

By Scott Judy

Archer Western Contractors of Atlanta, a subsidiary of one of the country's biggest construction firms, The Walsh Group of Chicago, is growing its revenues significantly and expanding its presence as it pursues high-profile, high-dollar transportation projects throughout the region.

For 2004, the company reported approximately $346 million in revenue from the four-state Southeast Construction region, up by about $42 million over the previous year. Despite the improved revenue total, Archer Western actually dropped a notch in the current Top Contractors ranking, from 13th last year to 14th.

Additionally, executives report the company has doubled its work volume in the four-state region over the past five years.

The Archer Western division reflects the overall capabilities of the $1.7 billion Walsh Group in general. According to Engineering News-Record's 2004 lists, Walsh ranked first in the nation in water treatment, wastewater treatment and sewerage and waste disposal; fourth in bridges; eighth in highways; seventh in multi-unit residential; 13th in airports; and 29th in general building.

Likewise, Archer Western has built up a strong base of water and wastewater-type projects, especially in Georgia, where an especially vibrant market has generated numerous large projects of this type.

Transportation appears to be the firm's immediate focus, with rapid and significant growth occurring in Florida and the company moving to expand its presence in North Carolina. In Georgia, the company is in the latter stages of a $160 million runway project at Hartsfield-Jackson Atlanta International Airport, and also has two other projects there, the Baggage Screening project for the Transportation Security Administration and the Maynard H. Jackson International Terminal Embankment and Utilities Relocation Phase II contract.

Despite the transportation push, Archer Western is much like The Walsh Group in that its activity in the four-state region is well diversified. According to the company, approximately 40 percent of last year's regional revenue came from the transportation sector, roughly 35 percent from water supply or sewerage projects, 20 percent from general building and 5 percent from parking structures.

Growth

Donald Gillis, vice president and business group manager for Archer Western's Atlanta region, said in addition to these existing markets, the company sees other opportunities emerging.

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"We see future growth in buildings at the university level, but there are delays due to funding," he said, along with continuing opportunities in transportation and treatment-plant projects. Archer Western's Atlanta region is currently constructing seven water and wastewater treatment plant projects, with a collective value of more than $300 million.

Summing up the firm's approach, Gillis added, "We try to operate regionally and react to whatever mix of projects are in the plans for our customers."

He said the growth experienced has been a byproduct of the company's focus and not a goal unto itself.

"A lot of our success has been in not trying to be the contractor that builds everything in a region," he added. "We have been far more successful at being a niche player and being able to be selective about the jobs we pursue. And we would much rather be able to maintain that formula, and if that means we're a certain size, then so be it.

"We don't have a growth goal," Gillis continued. Instead, he said, "We have a strategy to find the right kinds of customers and the right kinds of jobs to allow us to be successful. If that means we get bigger or smaller, then we'll follow that path."

Florida's transportation industry is a huge growth market for Archer Western. The company has rapidly increased its profile in the state in the past three years.

Sam Joiner, business group manager, heads up Archer Western's Florida operations from offices in Jacksonville.

Joiner, formerly with Granite Construction Co. for 25 years, came to Archer Western three years ago. Since that time, the value of Florida projects under contract has escalated nearly tenfold, from about $55 million to approximately $500 million, he said.

That increase was due in large part to the firm recently winning a $148 million Interstate 95/I-10 Interchange project in Jacksonville, which just started construction, as well as another $74 million project.

And that volume total could possibly jump again. Archer Western was among three firms short-listed to present a design-build proposal for the estimated $325 million Escambia Bay Bridge rebuild. That Florida Department of Transportation project, set to be awarded this month, is a replacement of the I-10 bridge destroyed by Hurricane Ivan last fall.

Despite the huge uptick in work, Joiner, like Gillis, said the company is simply focused on finding the right jobs.

"The strategy over the last three years has been to pursue work in a rather methodical way that focuses on figuring out when and where our strengths fit with certain market opportunities," Joiner added. "I'm interested in being the best contractor in Florida. I'm not necessarily interested in being the biggest. If bigness comes with that, then so be it. It's not what drives me."

At the same time, he said, "If you're asking me if we're full up, the answer's no. It just has to be the right job."

.Self-Performing

Joiner said the best projects for Archer Western to bid are those that are complex, feature a variety of work types and offer the company the opportunity to create efficiencies by self-performing much of the contract.

"Projects have to have a good mix of work that encompasses a lot of different disciplines," he said. "The philosophy is that jobs that have a good mix of work - a good proportion of structures to be built, a good proportion of earthwork and underground drainage - give us an advantage. The projects we like are larger, more complex, more schedule-driven and offer opportunities for value engineering."

Gillis said Archer Western also attempts to differentiate itself from firms it competes against by having experience in both the civil and building markets. For example, when bidding an underground structure for Atlanta's MARTA trains, Gillis said Archer Western's combination of civil and building experience can give it a competitive advantage over firms that may only have experience in one of those fields.

"We're able to do both, and we feel that allows us to be far more economical," he added. "We think having the number of different disciplines in one house is unusual in the industry these days.

"We think that we are more like an old-time contractor that self-performs a large percentage of work. We think there are many companies out there right now that don't do any of their own work, and that gives them less control over the work and less control over the results."