Volume 9 | Issue 2 | Year 2006

Anyone who has experience in a building project – whether a home renovation, kitchen renovation, or total construction from the ground up – knows that it frequently ends up costing more than anticipated. On top of that, there’s typically some additional work to be done because the project didn’t quite turn out according to plan. Call it the “uh-oh” factor.
Now, take these kinds of problems from a relatively small scale and crank them up to what can be encountered on a large scale $100 million-plus commercial or residential development that takes place over a period of at least two years and the magnitude of costly headaches grows exponentially. Anyone who can offer building owners not only the engineering know-how, but also the project management skills, to minimize, even eliminate, these “uh-oh” factors offers a considerable value-add.

Webcor Builders usually avoids the “uh-oh” factor by using highly qualified and experienced people to execute pre-planning and project methodologies that combine to live up to the company motto of “value through innovation.” According to Glenn Gabel, senior vice president, “Smart people create smart solutions. And we emphasize that we offer our clients solutions. If there’s a single factor that determines a successful construction project, it is precise planning and careful attention to detail at every step, from estimating and scheduling to our on-site management and quality control. In addition to our own extensive capabilities, we engage the best subcontractors to ensure the vision of a building is not only realized, but realized on-budget and as scheduled.”

Rosser B. Edwards and David R. Boyd started the company in 1971, and in 1994 merged with A. J. Ball Construction. In 2000, the founders retired, with Andrew Ball taking the reins as president/CEO. Like the founders, Ball believes “if a client has entrusted us to construct a new building, it’s our job to ask: how can we build it better?”

With over 55 million square feet of projects completed, Webcor specializes in constructing high-tech corporate campuses, commercial office buildings, high-density residential projects, luxury hotels and resorts, healthcare and pharmaceutical/biotech facilities, and parking structures. Webcor also provides interior construction as well as building renovation, historic restoration and seismic upgrades.

Headquartered in San Mateo, Calif. (now you understand the seismic upgrade expertise) with satellite offices in San Francisco, Los Angeles, San Diego, Hayward and Anaheim, Webcor focuses primarily on pre-eminent projects in its immediate neighborhood. These include landmark projects for such leading companies as Oracle, Electronic Arts, California Academy of Sciences, Starwood Lodging, and LucasFilm. Noteworthy sites include the Letterman Digital Arts Center in the Presidio at San Francisco, Cathedral of Christ the Light in Oakland, the Cove in Marina Del Rey, the Griffith Observatory renovation in Los Angles, and the California Academy of Sciences in San Francisco’s Golden Gate Park “We are proud to say that we’ve built many of California’s landmark buildings over the last 30 years,” Gabel notes. The company employs over 1,000 people and has over $1.5 billion in open contracts.

“We work directly with the owner or developer at the earliest stages of the project,” Gabel explains. “We want not only to define what work has to be done and develop a realistic cost of that work, but also to evaluate the cost of the project in comparison to other building costs for similar current projects to help the owner make the right business decision. We look to determine how to get the maximum value out of a project in accordance with the owner’s objectives within the permitted uses.”

On-Target Estimating
In the pre-planning phase, Webcor works in concert with the architect to break the project down into component systems and then develop a budget for each system. Gabel points out that Webcor itself does not offer architectural services, but in many cases becomes an integral member of the design team. ”Often the project developer will already have an architect, but in some cases when they don’t, we’ll recommend an architect to the client,” Gabel says. “Our role in the design phase is, first, to develop realistic budgets so the clients know up-front what they’re going to be spending and, second, to develop a realistic schedule. Our participation at this conceptual stage helps ensure a timeline that can be met.”

Budgeting is particularly challenging in an environment that for the past year- and a-half has been beset by what Gabel characterizes as, ‘phenomenal inflation.’ “Last year” he explains, “on average, overall material costs increased 15 to 17 percent. Part of that increase can be attributed to natural disasters such as Hurricane Katrina as well as the huge demand for construction materials in China. However, where we’re really getting hit is the rising cost of petroleum. It affects us both in the cost of energy to make building products such as copper, aluminum, concrete, and in the cost of petroleum needed to transport these products from suppliers to the building sites.”

Even with that volatility, though, Gabel boasts that the difference between actual expenditures and the conceptual budgets Webcor has produced has only been off, at most, 3 to 4 percent.

One way Webcor achieves this budget accuracy is through technology. “I’d say that most construction firms of our size have the same project management software we do – Prolog Manager by Meridan Systems for budgeting and cost tracking and Timberline Gold Accounting and Timberline Estimating, which gives owners on-line access to – construction costs – but we’re the only company that offers 5-D modeling. This is object-based estimating software that includes the fourth dimension of time, and the fifth dimension of money. What that means is we can take a set of drawings and build into it a library of objects associated with either a specific building system, or stage of construction, and get a cost model. If the architect adds a wall, not only is the design immediately updated, but so is the schedule and cost estimate.”

He adds that the software is also useful to identify inconsistencies or obstructions. “In projects of the size and complexity that we undertake there are many design changes during preconstruction and as a result, it’s not unusual to find a stairway that doesn’t lead anywhere. Of course the best time to catch those problems is in the conceptual phase.”

Webcor also employs what it terms “virtual trailering.” Every job site trailer is networked to the main office computer through a T-1 frame relay line that carries Internet access, email and all project data. “Internet time cards based on a custom software program that interfaces directly with our accounting systems keep costs current and saves time,” Gabel says. “We also use a custom-designed ‘paperless payable’ software: invoices are scanned, approved and tied to project costs eliminating timely paper shuffling which speeds payment to subcontractors and reduces time and processing costs.”

Commitment to Teamwork
Of course, buildings don’t get built by software. “From an accounting standpoint, labor represents about 20 to 30 percent of a project’s costs,” Gabel notes. “However, there’s a more intangible element – every construction project reflects the spirit and talent of the people who build it.”

Gabel notes that in California in particular, there is a shortage of skilled labor. “The building boom has meant that the available labor pool has a shrinking capacity to take on more work. That means subcontractors can basically pick and choose where they want to work, and what contractor they want to work with. Because we treat subs fairly and pay them promptly and have a reputation for quality work on challenging high-profile projects, we’ve been fortunate to have had an adequate skilled labor force unlike many other contractors.

Webcor labors on another competitive front – it is the title sponsor of a world-class professional cycling team that won the 2004 T-Mobile International and sent a member to the last Olympics. In addition, Webcor sponsors an amateur cycling club , which has over 350 members. Through its sponsorship of the Webcor cycling team, the company is supporting amateur athletics, promoting success through teamwork, and showing the youth of America the way to becoming a true champion.

Gabel also points to the company’s ongoing commitment to community service. “Part of the measurement of our success is our ability to provide company resources to address community needs where we live and work. We feel it is a fundamental moral obligation and donate our resources to many family and children’s charities, including Rebuilding Together, Habitat for Humanity, the Boy Scouts of America, the Ronald McDonald House and a host of others.

It’s no surprise, then, that Webcor ranks as the fifth best company overall in the Bay area to work for, which is also the highest ranking for any construction company. “The only way to obtain consistency, continuity, productivity and quality is to hire, educate and retain good people. Our company is 100 percent employee-owned,” Gabel says. “Many of our employees have more than 15 years of service with the company, in large part because the on-going training we provide that allows them to grow and build their skills enabling them to handle a host of challenging opportunities.”

Concrete Performance
In addition to the quality of the people it brings to a job, Webcor has the additional advantage of its own internal capabilities. “We are the largest structural concrete contractor in northern California,” Gabel points out, “and the only builder in our category that provides its own concrete work. For the type of developments we do, concrete is absolutely critical to the success of a project. An inefficient design or one that includes poor or missed details can easily cost the owner hundreds of thousands of dollars and add weeks to the schedule. Our 30 years of concrete expertise helps prevent this from happening on our projects. Having control of the concrete work is a major factor that allows us to drive the project schedule and finish the job on time.” It’s not surprising then, that in addition to its own projects, Webcor is itself often a subcontractor to provide concrete work for other builders.

Webcor finds that, for the immediate future at least, the California market is more than sufficient to keep it busy. “We turn down work almost every week,” Gable says. “We’re not accepting anything for 2006, though we are taking on projects that will begin in 2007/2008. Strategically, in looking three to four years down the road, we think we have enough work to keep us busy here in California.”

This is not to say that the market hasn’t changed. “In 2000, the dot-com bust hit and there were high-tech parks where we had already started to pour the footings that were put on hold,” Gabel says. “Fortunately, at about the same time there was an explosion in the hospitality and residential markets. Healthcare was another area experiencing a building boom. So, while there was a significant fall off in one market, there was more than enough growth elsewhere in California to keep us busy. Today, we’re finding that high-tech is making a comeback and we’ve got a number of projects in Silicon Valley again.”
That said, Gable notes, “While vacancy rates in some buildings are high today, what’s keeping development going is the scarcity of Class A properties with potential for 50,000 to 100,000 square feet per tenant. There just is not a great deal of capacity for that amount of space and owners want to take advantage of the opportunity to create that space before demand skyrockets.”

Ranked as the largest commercial contractor in the area by the San Francisco Business Times, it would seem that the best way for owners to take advantage of their properties is to take advantage of the impressive arrays of Webcor services – they provide a firm foundation for building with integrity.

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