BC Contracting

Issue 107


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BC Contracting began its life known as Bakken Contracting, and it was born in Fargo, North Dakota. A partnership between a local developer and homebuilder, Bakken Contracting responded to the oil boom at that time, when the Bakken formation oil field was thriving, and there was immense demand for multifamily housing in western North Dakota. Calling itself Bakken Contracting to highlight its focus on the Bakken region, it saw enormous initial success to the point where in 2015 it achieved $115m revenue – a substantial sum, especially in this particular location.

However, as Vice President of BC Contracting, Casey Jackson, pointed out, it was in 2015 when the market changed. Ideally placed to share the story as he joined the business at this time, Casey noted that oil prices began to ‘tank’ (in his words) and as they dropped, so too did orders for multifamily housing projects. “By the end of 2015 we found ourselves in a very different position than the prior year with no project leads, minimal backlog for 2016 and we had to reinvent ourselves,” he said. “So, in 2016 we went through a rebranding effort to change our name to BC Contracting, signifying our move away from the Bakken region, and we developed a business plan, where we formulated a strategy to migrate out of Western North Dakota and leverage the network that we had built with developers around the country, focusing on procuring work in other areas.

“In 2016, we did about $26m in revenue so we were down about 80 per cent – it was a tough year. But through our efforts and our strategic plan, things started to go well in 2017 and here we are today in 2021, working in nine different states and booking about $140m of revenue in 2020.”

While the core business of BC Contracting remains construction of multifamily housing assets, it has also gone into some parallel markets, as Casey explained. “About 80 per cent of our revenue is multifamily and within that segment, we build not only market rate products but also affordable housing, student housing and senior housing as well, which accounts for the majority of the revenue stream for us. The other 20 per cent is commercial construction,” he added. “The lion share of the commercial market is what I would call light industrial, maybe even heavy commercial. We build a lot of stores for RDO Equipment Company, which is the largest John Deere dealer in the country. We have established a great relationship with them and have been building their stores around the country for the last three to four years, which has been the main source of our commercial revenue.”

Having mentioned the importance of the relationship with RDO Equipment, Casey noted that being viewed as a business partner rather than just another commodity is a critical part of the strategy for BC Contracting. He attributed the business and development acumen that the team has accrued over the years as being an essential differentiator for the company. “We have become quite knowledgeable over the last five years on what it takes to get a project out of the ground,” he said. “It starts at site selection and goes through entitlement, designing to a budget, even raising equity and finding financing. We are in a position to help a developer get the most bang for their buck if you will, and spend their money to achieve their business objectives. That means we look at any given market and find out what draws in the renters, what puts ‘heads on beds’. I think that is one element that sets us apart from our competitors, we really take the approach of being a business partner and looking beyond construction.”

The other distinction that Casey highlighted also stems from the business’ earlier experiences in Northern Dakota – a sparsely populated area where there are few subcontractors to call upon. “We had to bring in contractors from various other states, and through that process we developed a lot of relationships with travelling subcontractors. This has been very beneficial for us when working in a very busy region, such as Austin, Texas, which is a booming market, with escalating costs and where the local subcontractors are able to charge high fees. We can bring in subcontractors in from Michigan or Minnesota where it’s not as busy and this makes us more competitive than the local contractors and we can get to a better price point. We also have relationships with those subs, which means we have a lot better ability to control our schedule, our resources and provide a certainty of outcome for our customers.”

The flexibility offered by BC Contracting is also very appealing – it can join a project right at the front end at concept or site selection, it can come in later in the process to manage the design and budget, or it can submit a bid after the design is complete and if awarded, get straight into the build. “It’s probably an even split between these delivery methods,” said Casey. “Our preference would be to be involved from the earliest point possible, because our experience means we are very in tune with current conditions, and we can provide developers with a more up-to-date snapshot of where the market is today, saving them issues with equity or financing.

“We can be another set of eyes and ears, just to close the gap on the scope development and at the same time we are providing real time cost information so that the developer can react where needed. For example, right now lumber costs are up 200 per cent and have been for the last year, and that is a real cost impact to a customer, especially on a multifamily project. They might need to take a step back and look at how they are going to absorb that premium, and we are seeing it with copper and drywall compound, too. Different things are happening in the commodity market that are going to affect the price of the project, which may affect the overall design or amenity package, and maybe sometimes the developer is not keeping up to date on these – we can assist with this. Our approach is always to get involved as early as we can, act as a business partner and be a valuable resource in all these areas as a project is developed.”

Casey also noted that the business always looks for new materials and options that could offer alternative to traditional solutions, and saves costs on site where possible through initiatives such as recycling. “Reducing costs but maintaining the desired level of finishes and the program objectives are always the target,” he said.

Having talked about the operations side of BC Contracting, Casey then moved onto the important topic of the projects that they construct – these physical manifestations represent the culmination of all its hard work, and stand as a reminder of its efforts at the design and planning stages. He identified one particular building that is a source of real pride for the business – a corporate office for RD Offutt Company, in BC Contracting’s home town of Fargo. “This was actually an 85,000 sq ft fit-out on an 18-story mid-rise building that another contractor had built the core and shell,” he said. “RDO is the anchor tenant, and we were involved in the design development, working hand-in-hand through cost analysis and looking at design and material options – it really felt like we held an important role in that process and were a resource for RDO as they evaluated where they wanted to spend their money and meet their business objectives.

“It is a legacy project for them as their new corporate office, and so we had to make sure that it met their expectations and the expectations of their team members. The design team, RSP Architects from Minneapolis, did a phenomenal job and the end result is a very high-end, class A office, featuring a lot of architectural woodwork, and some superlative finishes.

“This was our first really big commercial project, and I feel that we did hold our own and add a lot of value throughout the design phase, and we really executed on the construction phase. I walked through the space yesterday [at time of interview] with the principle architect from RSP and we both took a step back and said ‘this is one to be proud of’. I would say that project is a feather in our hat for our commercial construction resume and a really good showpiece for what we can accomplish as a commercial contractor in a high-end office space.”

Another project that Casey chose to highlight was a$65m, 305-unit student housing project, in Flagstaff, Arizona, for McGrath Partners, a large, Houston-based developer. “McGrath asked us to go to Flagstaff, Arizona primarily because of our ability to execute projects in what are typically high barrier to entry markets – places that are not flush with labor resources. That is our largest project to date in a pretty tough market, and the fact that McGrath trusts us to go to Flagstaff and build a significant project for them is something of which we are very proud. We are currently under construction, pouring the slabs for the buildings and getting ready to go vertical.”

Given the flexibility of BC Contracting’s approach and its willingness to go the extra mile, it’s no surprise to learn that clients return for second and third projects. “We are gratified that we have repeat business from a handful of developers and that falls right in line with our strategic plan; to create relationships, trust and confidence, so that clients want to use us again on another project,” agreed Casey. “In fact, we recently commenced four new construction starts and all of them were second projects. We take a lot of satisfaction from that, because it means we are delivering on clients’ requirements, and they are happy with the process and the product we have built. It is always our intention to build customers for life and get repeat business and we have to exceed their expectations to achieve it.” Indeed, it was repeat business that took BC Contracting into Austin, Texas and it is worth noting that it is also working on projects in Alabama, Oregon and San Antonio, too.

Having referred to the several locations where BC Contracting’s efforts come to life, it is apparent that the business has spread its wings far from North Dakota. Nevertheless, these disparate places do bring challenges, including the fact that Casey and his Operations Manager Trevor Deyo like to personally visit each site the company is working on every month. “This is something that we feel is important, not only to oversee the progress and make sure our teams are executing, but also build up rapport with our team members that are dispersed around the country. What will be a challenge for me going forward will be allocating the time to touch every project personally as we spread out and we do more volume, and that is certainly something I am focused on.

“Whether its myself or maybe some new upper level management personnel, we are going to maintain that approach, so that we are going to be visible in every single project, every single month. That is why we would like to build some critical mass in the areas where it makes sense, because then we can go to a specific location and spend the day there. For example, in Austin we have four projects, so we can visit all projects in a day, and then we can fly to the next city.”

Keeping in touch with his teams is obviously a priority for Casey, and he attributed his dedication to people development as something he learned from a previous employer. “Our people are our greatest asset,” he emphasized. “They are the ones who deliver every single day and work through all the issues, they deal with the stress and anxiety of building a project that pleases our customers. I know that we absolutely have to go and find the best talent in the market, that believe in BC Contracting and share our growth and vision. I have literally been involved in every single hire for the past six years and make sure we are building a core team that I think is really talented, aligns with our culture and has the ability to grow. I know we are going to have people who outgrow us and that’s fine, because if I have team members who are successful to the point that I can’t find the next opportunity for them then that means overall our whole company is succeeding. As we grow we can entrust in some of our young leaders to mentor to the same level that I have over the last five years.”

With its work spread across the country and travel restrictions affecting Casey’s ability to visit sites, you might expect Covid-19 to have been a major challenge for the business. But in fact, Casey noted that because its projects were already distributed across multiple states, it was used to working remotely, and controlling jobs from afar – it was a matter of putting the right policies and procedures in place to maintain jobsite safety. “Once flight restrictions were lifted then I let our team members assess for themselves if they were comfortable to travel, and that is another example of our culture, provide a lot of autonomy to team members.”

Continuing on the theme of staff, Casey highlighted that finding the right staff is a continuous challenge, and he has tasked one of his team members to look at how technology can enable the business to work smarter to help make up for labor shortages and managing projects from Fargo. “Being efficient with fewer resources will be paramount in the future,” he agreed. “Technology continues to be a big part of construction as it has in the past five years and I only see it getting a larger role in the process. We’ve already implemented a program called Openspace and we also used a App to help us navigate Covid-19. All our superintendents are equipped with iPads in the field – they can take a photograph, upload it to Procore and share that with the design team, and resolve a problem within a matter of minutes.

“I can see how technology has made construction so much more efficient since the days I started in the industry,” he continued. “We can do things so much faster – the pace that we build today is astonishing. There have been huge advancements in the last 20 years and I think it reduces errors, it makes us more efficient, it provides a better collaboration, and I think we get a better product in the end.”

Also linked to this is the growing trend for prefabrication in construction, which is an emerging market, but is an area that Casey predicts will come to the forefront in the multifamily sector in the future. “To remain competitive and deliver the price points that our developer and customers are looking for, we have to look at other ways we can build smarter, within a controlled environment, with fewer people, using automation – so we can relieve that pressure on labor resources,” he said. “We also need to start promoting the trades more at elementary and high school levels to get young kids interested in construction, to really replenish what is becoming attrition at a craftsman level.”

The evolutions that BC Contracting underwent in 2015 prove that it is a company prepared to take big steps and enter new areas as circumstances demand. This drive for growth and success continues unabated, and not daunted by coronavirus or recruitment struggles, the team has a five-year plan to double revenue from where it stands in 2021. “We want to focus on an emerging market which is as yet undetermined, as well as growing our commercial construction revenue, and maintaining our presence as a premier multifamily builder and keeping that as our core business,” Casey divulged. “We would also like to expand into the industrial market, specifically food processing, primarily because our equity partners are a large agribusiness, they are the largest potato producer in the country and they have a really big footprint. With their agricultural stronghold across the country we feel there is an opportunity for us to go into that sector – our location on the northern plains of the US also works for this.

“Coupled with this we are looking at the energy sector. There is always a need for multifamily housing in energy markets, but we are starting to shift our focus on renewables and specifically looking at solar construction.”

Further exciting plans include a new office opening in Dallas, where BC Contracting is working hard to grow its presence, and

Casey sees the company as well positioned at the moment – with an equity partner that is prepared to support expansion and help it to continue to grow and evolve going forward. “As long as we can show them we are yielding a good return on their equity, then I think they are going to support our push into regions and markets where we believe there is great opportunity for BC to flourish,” he said.

Earlier in our conversation, Casey was talking about the RDO building in Fargo, and he shared a thought that almost sums up what BC Contracting achieves through its hard work and dedication. “You can get lost in the daily grind and lose sight of what you are accomplishing – when it’s all said and done, and you walk through a space that you have created, sometimes you need to stop and appreciate the work that people have put in and the space that you have really brought to life,” he said. These beautiful buildings and homes are the legacy of what BC Contracting and its people create – it leaves its mark on the landscape and it can be proud of its contribution to the development of housing and commercial space all across the United States.

BC Contracting
www.bccontractingco.com
Services: General construction contractor


BC Contracting