Want to Meet the Needs of the Self-Reliant Contractor? Meet Tab ConstructionBy Joanne Costin
Article Date: 07-01-2008
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
The construction manager of this up-and-coming contractor company keeps all his machine maintenance in-house.
Bud Wheatley refers to himself as "from the old school." The 65-year old is a third generation earthmover and construction manager for Colorado Springs, Colo. -based Tab Construction. He manages a fleet of more than 100 machines for the family's heavy construction and underground utility construction business.While satisfied with his dealers, Wheatley chooses to do his own maintenance. He is loyal to brands and dealers, but if you are not one of his suppliers, selling to Wheatley requires patience and persistence. To help you learn how to better serve up-and-coming contractors like Tab Construction, we recently asked Wheatley what he looks for from a dealer and what drives his equipment decisions.Tab Construction was a finalist in Equipment World magazine's 2008 Contractor of the Year competition. Since its inception in 1993, the company has prospered working on government and commercial projects in the Colorado-Springs area. In the last five years, annual sales have grown 237 percent to more than $6.9 million. Through April of 2008, company sales are up 50 percent over last year. President and owner Cyndi Wheatley (and Bud's wife) attributes their success to the way they do business."We try to treat people the way that we would like to be treated," said Cyndi Wheatley. "We try to be ethical and we don't cut corners."The company is active in the community and the industry. This fall, Tab Construction will host a Construction Career Day for more than 700 area students and representatives from all trades and specialties of construction.A good reputation they've built with the Army Corps. of Engineers has led to work at Colorado Springs' four military facilities including Fort Carson, the U.S. Air Force Academy, Peterson Air Force Base and Schriever Air Force Base. Because Tab Construction doesn't focus on residential construction work, the company hasn't been as affected by the downturn in housing as other earthmoving companies in the area have been. However, the market slowdown has driven more contractors to bid on commercial work."Where we had three or four bidders before, now we have 10 or 12," said Bud Wheatley. "[Jobs] go pretty cheap."And given the competitive market conditions, it has been difficult for the contractor to pass on rising fuel costs.The company offers a total package to its customers beginning with site preparation work such as foundation excavation, compacted backfill and grading. They also will install storm sewer, sanitary sewer, water, gas main lines and services, as well as fire lines and other utilities. Geographic expansion isn't on the agenda. "You can‘t offer the service to your customer," said Bud Wheatley. In Colorado Springs, a Tab Construction pickup hauls a skid-steer to take care of small jobs for customers - moving a small pile of dirt or leveling out an area for scaffolding. Working further away from Colorado Springs makes that kind of service difficult to deliver.In-House Fleet Maintenance
For Wheatley, managing the fleet both in the field and in the shop is critical to the company's success. The vast majority of maintenance work is done in-house - a strategy that Wheatley believes offers greater control and lower costs."It costs an awful lot of money to keep this stuff running," said Wheatley, "and I don't know if we could still be in business and hire it out."Several factors play into this decision including a growing fleet and adequate space.
"We now have five mechanics that work full time on this," said Wheatley. The company also has a 20,000-square-foot maintenance shop with four bays and a 10-acre yard. Each bay will hold up to four machines. The company purchases most of its machines used to hold down costs, purchasing the majority of them with cash. Doing the maintenance work themselves provides Tab Construction with greater flexibility. "If we bring a piece of equipment into the yard and the cash flow becomes a crunch, we can park that tractor and we can work on it when we want," said Wheatley. "We can do that and we don't have the upfront cost with Cat and Komatsu coming in, tearing it down and telling us how much it's going to cost."On a daily basis, operators are responsible for completing a write-up on any mechanical problems. Foremen are responsible for reviewing the write-ups and observing the equipment problem. All the write-ups are reviewed by field supervisors and Wheatley. Field mechanics are responsible for prioritizing maintenance needs. Oil analysis helps identify potential problems before a breakdown. Oil samples from every machine are sent to Caterpillar every 250 hours, while transmissions and hydraulics are tested every 500 hours and 1000 hours, respectively. Results are entered into a computer for easy access. If problems are detected, Tab Construction can call Caterpillar to discuss the results.For now, Wheatley's mechanics are able to handle the vast majority of repairs. Diagnostic equipment is used to analyze newer machines, and dealers provide assistance in interpreting the codes or with on-board computer repairs. Tab Construction's current Caterpillar salesman is a former mechanic and Wheatley finds value in being able to call him up and talk to him about an engine. "He's good for us," Wheatley said.Buying Used, Planning Ahead Saves Money
When Wheatley determines a need for a new machine, he allows plenty of time to find the right one, often purchasing out of dealer rental fleets."I usually think about what we might need next month or next year and I start looking for it," he said. "I hardly ever have to buy anything in a crunch because that's when you give them too much money."When looking to buy new or used, Wheatley looks online and in magazines. He will also call his dealers and let them know what he's looking for. He has purchased machines from all over the country. Before purchasing he will review the oil analysis of the machine and do some checking on the dealer he is buying from. Because business has been steady, the majority of machines are owned rather than rented.When he does purchase new, he finds the market to be competitive. "If you buy apples to apples you are going to pay for it," said Wheatley. Most of the company's backhoes are purchased new. Still, Wheatley is not one to stray away from the major brands he has experience with: Cat, Deere, Case and Komatsu. And forget a demo. Wheatley isn't receptive to the idea, given the company's busy work schedule. He finds no value "in piddling around out there for four or five hours when we could be working."How to Become a Tab Construction Dealer
So how do you become a dealer to a company like Tab Construction? "I think you just have to be persistent," said Wheatley. "I would have never run Komatsu equipment, except they had a service guy that was one of the best mechanics I have ever seen." When the company was smaller, Tab Construction would outsource some maintenance, and when a Caterpillar mechanic wasn't available, they called upon Komatsu. "We got to know them, and rented some of their equipment when we needed it. We realized they had good equipment," he explained.As for parts, Wheatley doesn't have any problems getting what he needs. Caterpillar usually has everything in stock, and Komatsu is generally able to get something within a day.Looking to the future, Wheatley recognizes that emissions will be a big concern for contractors like him. Far more machines in their fleet are powered by Tier I and II engines than are powered by Tier III. He has already been required to submit paperwork for government jobs and thinks that emissions restrictions on government jobsites may impact his business before any regulations go into effect. Retrofit strategies have already been discussed with dealers and he plans on doing the work in-house, with guidance from the dealers."I think we are going to have to wait and see and plan on updating," said Wheatley.Purchase Plans and Business Outlook
While Tab Construction has held off on purchasing equipment so far this year, they are continually updating their fleet. With the exception of backhoes, they generally look to purchase well maintained machines that are two or three years old. They are looking for conditions to improve in 2009 as the residential market recovers.Self-reliant contractors like Tab Construction may not have a need to know about your latest and greatest machine, but when opportunities arise, dealers who understand what they need stand to gain. That may mean keeping your eye out for a good used machine, troubleshooting their maintenance problems or finding quality used parts for them. Dealers need to remember that good customers come in all shapes and sizes and a growing contractor like Tab Construction can mean growth in the dealer's business as well.
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