Concrete crews: Run your own or sub it out?

Across the country, rural builders are coming up with some concrete ideas. While some have hired their own crews to pour concrete, others prefer to subcontract the work — and still other builders do both.
At D&W Construction of Alexandria, Minn., general manager Todd Emmons says his 30-year-old company decided a decade ago to put its own concrete crew on the payroll. “It was a matter of quality and scheduling,” he explains. As a general contractor, D&W Construction builds a wide range of commercial and residential projects, both steel- and post-frame.
“Your foundation is what you build on,” Emmons points out, “and if your concrete foundation isn’t square, that makes things hard for your carpenters.” At the same time, with projects under way throughout central Minnesota, he says D&W’s in-house concrete crew “gives us complete control over our schedule. With subs, if I’m a day late and miss my window, I might have to wait two weeks until they can reschedule my job.”
Emmons’s 60 employees are formed into about 10 crews, including the concrete crew, which is comprised of between three and five workers. The men do flatwork, poured walls, and insulating concrete forms. During lulls between concrete jobs the men are assigned to carpentry work, a task at which each is skilled. In hiring workers for his concrete crew, Emmons generally looks for people who have prior experience. At the same time, his company’s experience with concrete allows D&W to do its own in-house training.
The only drawback to D&W’s approach, admits Emmons, is the investment required to purchase needed equipment such as a power troweler and vibrating screed. “But overall, I think running our own concrete crew is cheaper than subbing out the work,” he contends, “because we control the schedule and so we can be more efficient. Also, the subcontractor has the same employee costs and material costs that I do — which he passes along to me, plus his markup.”
At times, Emmons may subcontract some of his concrete jobs “if we’re really busy, or if the job is especially complex, or if I can gain a schedule advantage. This past year was a really good year for our company and so I subbed out about a third of our concrete work.” Post-frame construction can be a good candidate for concrete subcontracting, he observes, “since you pour the floor after the building is up, and you don’t have to do carpentry on top of the concrete.”

No substitute for subs
Chris Harmsen, operations manager and agricultural engineer for Precision Structures Inc., also covers a wide territory. But with projects scattered across a 200-mile radius from his company’s headquarters in Wellman, Iowa, he believes that “subcontracting our concrete work gives us more flexibility, rather than less.”
Contracts can range from $20,000 up to $6 million, with livestock facilities making up the largest share of PSI’s business. “We have a core group of about 5-6 concrete subs, and also about 5-6 carpentry subs, and we try to give them all enough work to keep them busy,” Harmsen says. Because PSI is easily the subcontractors’ largest customer, he continues, “We pretty much can take our subs wherever we need them.”
Though Harmsen and the PSI management team have occasionally discussed hiring their own concrete crews, “We decided that it’s better for us to stay lean.” The decision is driven by the company’s focus on agricultural construction. For one thing, he points out, “The agricultural building market is volatile because it follows livestock prices. Using subs, rather than hiring crews of our own, is a better way to deal with that volatility.”
In addition, many types of livestock facilities require large amounts of concrete. Depending on the size of the project, pouring concrete can be the work of as few as five workers or as many as 50. Because personnel needs vary so widely, Harmsen says it would be impractical for PSI to maintain its own crews.
“Our needs also vary by the season, or from one year to the next,” Harmsen adds, “and so subbing our concrete work and carpentry makes the most sense during the winter and during slow years. We don’t have to worry about layoffs.” On the other hand, when building activity is high and PSI needs additional help, Harmsen has a list of more than 60 concrete subcontractors in his files. “If we’re ever in a crunch,” he says, “I can look up the subs in a given area and check their references.”
Even though PSI subcontracts its concrete and carpentry, Harmsen says the company maintains an in-house crew of a dozen workers who perform specialty mechanical work. “That kind of work is specialized enough where we need to keep people on our own payroll. But I don’t see concrete work as having that level of specialization.”
Among concrete subcontractors, smaller firms with five-man crews may do 90 percent of their business with PSI; larger firms that are capable of supplying 50 workers for a concrete job may rely on PSI for about half of their yearly volume. Harmsen acknowledges that the types of disputes that historically occur between GCs and subs can occasionally happen on PSI projects. “We have discussions about punch lists and change orders, just like the rest of the construction industry,” he says, “and on larger projects we may hold back a 10 percent retainage on our subcontractor.”
But, Harmsen reports, PSI always strives to “pay promptly and keep our subcontractors’ cash flow going.” And because its specialty contractors have proven themselves on past projects — and PSI requires proof of sufficient insurance — Harmsen has confidence in the firms he hires. “We work hard,” he affirms, “to build a feeling of trust on both sides.”

Having it both ways
In contrast to Todd Emmons and Chris Harmsen, president Bob Brisky of Fingerlakes Construction runs a split operation. Based in Clyde, N.Y., the company also maintains offices in the upstate New York cities of Batavia and Homer. The latter has two concrete crews on its payroll, while the Clyde and Batavia offices subcontract the work.
“We made the decision in Homer about five years ago,” explains Brisky, whose company has been in business for 35 years. “It was driven by two factors. We manufacture and build both commercial and agriculture projects, and most of our agricultural work is concentrated around the Homer office. Also, we started our own concrete crew in Homer to help us stay competitive with other builders.”
Much of the agricultural construction performed by Fingerlakes’ Homer office consists of dairy barns, some six to 10 facilities each year at a per-project cost of between $600,000 and $2 million. “Dairy barns require a lot of concrete,” Brisky points out, “so concrete is often the most expensive part of the building. The work is specialized and if we had to hire local masons they would charge and arm and a leg and make us less competitive.”
In deciding to recruit in-house concrete crews of his own, Brisky realized, “Our office in Homer was building enough dairy barns to keep a crew busy most of the year. And we would only need about $20,000 in equipment, plus a truck, to get started. The equipment investment wasn’t all that high and the wall forms can be rented.”
Finding qualified masons has been a more difficult task, Brisky admits, and workers must be paid well. “Ideally, our crews also have carpentry experience,” he adds, “so that when they’re not pouring concrete — which is about a third of the time — they can do other jobs.”
Why doesn’t Fingerlakes run its own concrete crews in Clyde and Batavia? In those areas, Brisky observes, “masons are hard to find because it’s very hard work.” Another obstacle, he continues, is that the Clyde and Batavia offices do not build many dairy barns. “We construct a lot of post-frame buildings in those two areas,” he says, “and it would take a lot of concrete floors to keep an in-house crew busy. Pouring a floor for a post-frame building only takes a day and then you’re done.”
Then too, Brisky continues, “What would we do with an in-house crew during the winter? We’d have to lay them off because it’s too cold to pour floors or perform other types of masonry work that time of year.”
Nevertheless, Fingerlakes Construction leans toward eventually having its own concrete crews at all three of its offices. With masons hard to find, Brisky says, his company may need to keep qualified workers on its payroll to ensure it has the personnel to do the job. In addition, without a crew of his own, he has sometimes been at the mercy of subcontractors “who don’t really want to take our job at a given time, and so they price it high.”
For Brisky, his ideal solution would be to hire workers who are both masons and carpenters. “This would allow us to vary the workload and be able to perform both jobs,” he says. “A small floor only takes an hour or two to pour, and then the crew could continue doing carpentry for the rest of the day. This would eliminate wasted time since the crew wouldn’t have to spend their day going from one concrete job to other.”
Brisky acknowledges that, should Fingerlakes hire in-house concrete crews at all three of its locations, “that might put pressure on us to expand the number of projects we’re doing in order to justify having our own crews.” But as he did several years ago when starting a concrete crew at his Homer office, Brisky believes that “rural builders always need to keep evaluating their markets and be willing to change the way they do things.”

Related Posts:

  • No Related Posts

COMMENT