Maximum Capacity

March 1, 2008 12:00 PM, By Beck Ireland, Staff Writer

Much like the old adage about the month in which this article appears, 2007 came roaring in like a lion for the majority of firms in EC&M's list of Top 40 design firms. In response to a proprietary survey, the firms reported $13.7 billion in overall design services revenue, marking an average increase of 14.7% over the firms' disclosed totals for 2006
(click here to see the Top 40 Design Firms)
. In addition, 33 firms reported revenues for electrical design work comprising $1.2 billion, an average increase of 28.8% over the totals reported for 2006 (Top Electrical Design Firms on page 36). When asked if the firms met or exceeded their revenue expectations for 2007, 30 firms answered affirmatively, with two-thirds of respondents claiming they exceeded expectations.

Only two firms missed their revenue goals for 2007. One firm cited a weakened economy. The other, Baton Rouge, La.-based Wink Companies (No. 17) explained its near-miss as an investment in international markets that won't pay off until 2008. “The timing of that coming into play is now starting to occur,” says Larry Wink, president and CEO.

Even with a delayed return on the effort, the company still experienced a 15.3% increase in revenue for overall design services work, pulling in $83 million over last year's total of $72 million. The company doesn't want to be accused of “sandbagging” its revenue goals, however. “We challenge ourselves with aggressive goals each year,” Wink says. “If we fall short by a percentage point or two or three, it doesn't bother us. We analyze it and see what we should have done better.”

Only three firms reporting revenue for both 2006 and 2007 experienced year-over-year decreases in overall design services revenue, and only two relayed a year-over-year decrease in total revenue specifically related to electrical design work. With a 56.3% increase in overall design revenue and a 40.7% increase in revenue related to electrical design, Phoenix-based DLT&V Systems Engineering (No. 33) moved up six spots in this year's list. Palo Alto, Calif.-based EYP Mission Critical Facilities (No. 18) jumped 10 spots with its 46.4% increase in overall design revenue and an incredible 105% spike in electrical design revenue. Rock Island, Ill.-based KJWW Engineering Consultants (No. 22) moved from its spot at No. 31 last year with an impressive 33.9% jump in revenue for overall design services and an absolutely astounding 246.9% increase in revenue related to electrical design work.

Revenue numbers, however, don't explain the lion's share of growth the Top 40 firms experienced in 2007. Almost half of the firms surveyed reported opening or expanding branch offices in 2007. Of the firms that experienced a change in the number of employees that year, 30 accounted for an increase in staffing, whereas only three noted no year-over-year change in the number, and four documented a decrease in the number of employees. Las Vegas-based JBA Consulting Engineers (No. 26), for example, added 73 employees to its roster in 2007, increasing its workforce by 101.4%.

Traditional game plans for recruitment and retention were cast aside in 2007, in favor of more creative and aggressive approaches. Many of the firms in this year's list expanded their resources through acquisition. A significant driver of the acquisition strategy for 2007 was not only gaining access to new geographic areas, but also to expand and enhance technical and project management capabilities. The talent shortage and the war to win over experienced professionals has just begun, say the Top 40 firms, and this won't be the year's only challenge. Other concerns reported in the surveys included rising costs of health care and benefits for employees, the increasing pressure to create energy-efficient and sustainable designs, and increasing pressure from clients for faster delivery times on tighter budgets (Table 1 on page 37). According to the Top 40 firms, the latter is a common occurrence on the construction side when using the design/build project delivery method. “For whatever reason, those projects seem to happen quickly, whether it's changing climate conditions or a project that wasn't needed now is needed,” says Mary J. Gross, P.E., electrical global technology leader for Englewood, Colo.-based CH2M Hill Companies (No. 2).

When asked to identify key areas of expertise, the survey respondents overwhelmingly indicated design/build was their first choice (Table 2 on page 39). A consequence of these constricted schedules is coordinating the arrival of equipment and materials with shorter lead times. “Getting equipment and materials to queue at the proper time to get them onto the site is only becoming more difficult,” Gross says. “This makes it a challenge to meet all the deliverables.”

TALENT SHORTAGE

More than half of the firms in this year's Top 40 comprise fewer than 500 employees (Table 3 on page 40). However, close to half opened branch offices in 2007. Overland Park, Kan.-based Black & Veatch (No. 4) expanded and/or opened 20 offices worldwide. The company claims the primary circumstances for such decisions included geographic, market, and resources expansion. No firms in the 2008 Top 40 reported closing branch offices in 2007. This goes along with the 30 firms that took on additional employees that year. Only three firms said the number of employees that worked for their company at the end of 2007 was the same as the number in 2006, and four reported a decrease.

Firms both big and small experienced difficulty in recruiting and retaining key experienced personnel. “It's something we've been experiencing for well over a year now,” says William Roman, president of PB Facilities, a division of New York-based Parsons Brinckerhoff (PB) (No. 3).

The combination of the retirement of baby-boom age workers and a dearth of engineers between the ages of 30 and 40 are mostly to blame for this shortage, say the majority of Top 40 firms. In the 1980s and especially the 1990s during the dotcom era, engineering programs suffered major enrollment losses with the growth in popularity of other business areas, such as computer science and information technology. “For those years, there weren't that many people entering and looking for an engineering degree because the marketplace wasn't that great,” Roman says.

The general perception of engineering as a difficult or boring field is also to blame for the decline in enrollment in engineering schools. High-tech and electronics fields have left the “less sexy” parts of engineering, such as distribution, in the lurch, says Gross. “Some of the electronics and advanced technologies have taken a bigger share and left other parts hurting,” she says. “Young people don't always regard engineering as an attractive alternative, which is too bad. There are just so many opportunities available for young people.”

Until perceptions are changed and more people begin graduating from engineering programs, the competition for talented professionals remains high. Recruitment and retention strategies run the gamut, but most come at a high price. Beating out the competition can be expensive. Most companies foster an internal referral system with big rewards. For example, for referring a candidate to PB, employees have a chance to win $20,000 or a car. “We're not making it insignificant,” Roman says. “We're not the only ones in the industry facing the shortage, so we're all competing against each other.”

In addition, employee poaching among companies adds another fiscal consequence: It raises the cost of labor. “They come in and hire a couple of people from my organization at higher salaries, so we turn around and hire people from another company at a higher salary,” Roman says. “The cost of people has gone up in accordance with the laws of supply and demand.”

According to most of the firms in the Top 40, it's best to get employees while they're young — most companies try to recruit out of colleges at an earlier level. College recruitment constitutes more of an investment in time rather than actual dollars. This involves establishing college contact programs, sponsoring seminars or special events, and having a general presence on campus. “It's been a long ongoing procedure for us,” says Anthony Morroni, partner in charge of electrical instrumentation and control for Phoenix-based Carollo (No. 16).

Flexible schedules may also bring candidates to the firm instead of the other way around. “We all know that what engineers did 25 years ago is not what engineers today necessarily want to do,” Gross says. “We try to encourage people in what they want to do in their careers.”

Potential employees can also be found in unlikely places. People working in fields other than engineering should not be discounted as potential employees. “We're open to people with different skill sets that we can help develop into what it is we need them to do,” Gross says. “People coming right out of school weren't interested in this field until now, so they need to be trained.”

A good reputation as an employer, however, can beat out any investment in money or time. Word of mouth may still be the best recruitment strategy. Morroni says that the prominent reputation the Instrumentation and Controls division at his firm boasts is attractive to potential employees. “That lets our employees and recruits understand the potential for a much stronger career path,” he says.

FRIENDLY TAKEOVERS

In 2007, some of the companies in the 2008 Top 40 list overcame the shortage of talent and expanded their resources by merger or acquisition. In April, Phoenix-based DL Engineering & Controls joined forces with TMV Systems Engineering and became one of the largest electrical engineering firms in the Southwest, DLT&V Systems Engineering (No. 33). As separate companies, they both provided electrical engineering, instrumentation and control system design, construction management, and integration and support services to clients in the industrial and public and private water utility markets. In 2006, DL Engineering & Controls comprised 68 employees in three offices. The new company employs close to 100 staff members in five locations, with 75 technical personnel in engineering design, construction management, and programming roles.

Both companies were seeking the resources to keep pace with the market demands for their engineering services. “Both companies were experiencing quite a bit of growth, and the biggest challenge was finding good, qualified people,” says Steve March, marketing manager, DLT&V Systems Engineering. “We were looking to provide an economy of scale, but not to get rid of people.”

According to March, it helped that the former individual companies weren't competing for clients before the merger. “It wasn't like there were two companies getting revenue from the same client and competing for them, and now we have only one company,” he says. “It was an additive effect in terms of the client roster.”

March's company wasn't the only one in the Top 40 to expand through acquisition in 2007. San Francisco-based URS Corp. (No. 1) acquired Washington Group International in a cash and stock transaction valued at about $2.6 billion. The Boise, Idaho-based company, which claimed the No. 11 spot in last year's Top 40, is now the Washington Division of URS Corp., which is now the fourth largest publicly held engineering and construction company in the United States, with a staff of more than 56,000 employees working across three divisions in 34 countries worldwide.

In April, San Antonio-based Zachry Group (No. 14) acquired Denver-based Utility Engineering Corp. (UE), a former engineering subsidiary of Xcel Energy, Minneapolis, and the No. 23 spot from the 2007 Top 40 list. Zachry also acquired three UE subsidiaries, including: San Antonio-based Precision Resource Co., a professional staffing company; Groton, Conn.-based Proto-Power Corp., an engineering and project management company dedicated to the nuclear power industry; and Amarillo, Texas-based Universal Utility Services, a full-service industrial maintenance group. UE and its subsidiaries, which employed about 500 people, retained their names and principal offices. “This purchase of UE provides a unique opportunity for us to combine our construction experience with UE's engineering capabilities,” says John B. Zachry, president of the Zachry Group, who now is also CEO and chairman of UE. “Together, we will be more fully able to serve our customers while continuing our ongoing relationships with other engineering and construction partners.”

CH2M Hill Companies (No. 2) finalized the acquisition of Anchorage, Alaska-based VECO, which earned the No. 12 spot in last year's Top 40 list. Formerly, VECO comprised 4,000 employees, with operations in Alaska, western Canada, the United States, Russia, and the Middle East. The former VECO businesses are now operating under the CH2M Hill name. “The employees of VECO are a great fit for our firm,” says Lee McIntire, president and COO of CH2M Hill. “We are proud to call them our colleagues.”

KJWW Engineering Consultants (No. 22) acquired EME, a Chicago-based mechanical and electrical engineering design firm, as well as EME's 58 employees, including 30 mechanical engineers and 13 electrical engineers, with 17 registered as professional engineers. “This additional talent at this important location strengthens our commitment to providing full building engineering services to our Chicago clients,” says Paul VanDuyne, P.E., president.

To foster a smooth transition, the company equipped the EME office with videoconferencing, an integrated voice over IP phone system, and inclusion into KJWW's network. “We spent nine months coordinating our efforts toward a successful integration,” says Jeff Pratt, P.E., the KJWW principal who manages the firm's office in Naperville, Ill., and was responsible for the transitioning of the two firms, working with standards, design techniques, and corporate cultures. Pratt explains that in addition to training, mentoring, and regular communications, there will actually be employees transferring between the two offices, which will readily blend the two organizations.

MARKET REPORT

The reason that many of the firms in the 2008 Top 40 list were fighting for resources is that many of their primary markets grew in 2007. When asked to identify the markets the firms are most active in, the firms responded with health care, power (utilities and T&D), education and institutional, government, commercial, and water and wastewater (Table 4 on page 40).

The oil refining and petrochemical market is the highest it's been since the mid-1950s and early 1960s, according to Wink. Not only has the price of oil gone up, but the spread in what it takes to convert the oil to gasoline and other finished products has also increased. Wink refers to this combination as a perfect storm. “It's now been a profit center beyond any metrics of recent memory,” he says.

Companies are now reinvesting profits made off of $100-per-barrel prices into expansion to meet the increased demands for gasoline, diesel, kerosene, and other fuel products. The companies also have to continue to invest in alternative fuel sources and in environmental compliance due to federal and state mandates. Over the last seven years, the U.S. Environmental Protection Agency (EPA) has pushed to minimize the sulfur content of fuel, particularly diesel.

Another factor improving the oil refining business is the sources of cheaper crude oil overseas, which require a refinery conversion to take out the impurities in order to make a finished fuel that meets specifications. “Essentially, they invest in their refinery and in return pay less for the crude oil,” Wink explains. “So refineries are strong, pipeline and terminal companies now have to transport and deliver more product through the system, and you have to store it so there's more demand for storage facilities. You also have increased investment in producing it. There's not any sector of oil that's not at a high point right now.”

Although Kfir Godrich, chief technology officer for EYP Mission Critical Facilities (No. 18) says that telecommunications is a misnomer for the work his firm performs — computer centers, data centers, and server rooms — it nevertheless is a thriving market and has been so for the last three years. “We continue to see the demand exceeding the supply of space,” Godrich says.

That's the first reason the business has been so robust. The second element is that the so-called enterprise data centers for financial institutions, such as big banks and brokerage firms, are driven by government regulations and security issues and the need for consolidation; therefore, new data centers are being built. Even amid the sub-prime mortgage crisis, Godrich's firm was kept busy. “Data processing and data storage is fundamental to any business today, but particularly for financial institutions,” he says.

Therefore, financial institutions aren't the only companies building or expanding facilities. Internet-related companies, such as Google and Yahoo!, are also responding to demand and are up against significant requirements of compliance mandated by the government. “Your typical existing data center — whether it's for manufacturing or insurance or pharmaceutical companies — cannot support the higher demand for power, cooling, and higher density,” he says. “All these things make a large percentage of existing data centers obsolete, so people are expanding, consolidating, or building new.”

For data centers, the cost per square foot is significantly lower for larger facilities. For those companies that can't afford or don't have time for a ground-up construction project, there is also the possibility for using co-location facilities, which is a data center where multiple companies co-locate their servers. The advantage of co-location is that the infrastructure is already in place, along with generators, uninterruptible power supply (UPS) systems, and cooling. “The raised floor is already built,” Godrich says. “The performance of these facilities are on par with enterprise data centers but offer a significant economy of scale.”

Another field requiring additional storage and processing space is health care. Driven by medical privacy issues stemming from the U.S. Department of Health & Human Services' Health Insurance Portability and Accountability Act (HIPAA), health-care facilities are expanding to accommodate medical records, which comprise written records as well as other kinds of media, such as X-rays. There's also a new trend in health care called the “whole electronic hospital,” a digital hospital concept.

Working in the health-care market, Chicago-based Proteus Group (No. 34) has experienced a steady schedule of new construction and retrofit projects. “We have a lot of repeat business from some of our ongoing clients,” says Brian Wattleworth, engineering principal. “We can remodel a procedure room, and then go back in there a few years later. We're doing the same room again, putting another machine in there.”

While not considered a market in and of itself, instrumentation and controls (I&C) were reported by the 2008 Top 40 design firms as a vibrant business. Divisions that work in this area often target the municipal realm in markets such as water and wastewater. The divisions support the core business by supplying electrical and instrumentation design but sometimes the I&C project has no real impact on the water and wastewater processes.

“Sometimes we do cogeneration projects,” says Morroni of Carollo Engineers (No. 16). “We do a lot in the way of more renewable energy of projects, with fuel cells and photovoltaic (PV) systems. That's being driven by the fact that water and wastewater facilities are very cognizant of their carbon footprint, and they want to make sure they stay environmentally friendly. As that becomes more prominent, we're doing more in the way of alternative generation mechanisms to help reduce their carbon footprint.”

BUILDING GREEN

An emerging market that has benefited greatly from high oil prices, government mandates, and mainstream media coverage is green building. Awareness has also been executed through the Washington, D.C.-based U.S. Green Building Council's (USGBC) Leadership in Energy and Environmental Design (LEED) Building Rating System, which is the nationally recognized benchmark for the design, construction, and operation of high-performance green buildings.

When asked what technologies their companies feel have the greatest chance of changing the landscape in electrical design work in the next three to five years and in the next decade, 13 of the Top 40 firms responded with sustainable energy and energy-efficient products (Table 5 on page 42).

Not only are these firms up to the challenge of designing and installing energy-efficient technology, but they are also in the process of improving the sustainability rating and energy efficiency of these technologies. “There's a strong demand for wind power plants, and there's a strong demand for solar,” says Roman of PB (No. 3). “Those are areas where there can be some advances made to improve the efficiency of the plants, and we're going to go through that process. What's going to change also is there will be a lot more restrictions on plants that emit various pollutants.”

Roman also sees the possibility of using I&C to decrease electricity use during peak demand. “The technology's out there,” he says.

Apparently, so are the means to make that more desirable, if not a necessity. “Within five to 10 years, you'll see time-of-day pricing instead of just a uniform rate,” he continues. “All it will take is for the states to allow the utilities to change their rate structure and be able to adjust the price on a daily basis to reduce the load. If they go to time-of-day pricing, then it'll be up to consumers to decide if they want these controls.”

FUTURE OUTLOOK

“Out like a lamb,” is how the rest of the saying about March goes, and the end of 2007 followed suit. Although 25 firms are predicting an increase of 6% or more for next year, five firms — one more than last year — are preparing for a decrease in revenue for overall design services in 2008. Five firms are expecting their revenue numbers to stay the same, and three are predicting a minimal increase of 5% or less (Figure on page 46).

Relatively sheltered from the direct fallout caused by the sub-prime mortgage crisis, the firms on the Top 40 list are concerned about a weakening economy and a slowdown in municipal work caused by the abandonment of residential developments. An overlooked effect of the slowdown in residential construction is its impact on non-residential design firms. In 2007, companies providing services to municipalities and private utilities found that some of their scheduled projects were on hold or permanently stopped.

In the southwest United States, for example, many towns and cities have been experiencing exponential growth for at least a decade, which, in turn, increases the demand for infrastructure. Some of the municipalities were requiring developers to build some of the infrastructure as they were putting in housing developments. Then, as some of the developments were put on hold, so was the infrastructure. “There are still people moving in, but there are so many houses on the market that there's not a demand that is driving the developers to build like they were a couple of years ago,” says DLT&V Systems Engineering's March. “So those types of projects have gone away during what I expect will be a temporary dry spell. There's just not the push for new housing; therefore, the infrastructure that went with those new houses that the developers were building is not being pushed, so there have been a lot of projects that went on the shelf and are in kind of a holding pattern.”

On the other hand, there are in-place utilities in more mature housing markets in need of upgrades, replacements, and expansion. “There's still work to be done. It's just that one segment has certainly dropped off a bit,” March says.

Top 40 Design Firms
2008 Ranking 2007 Ranking Company Location 2007 Design Services Revenue (millions)* % Change (2006 to 2007)
1 1 URS Corp. San Francisco $5,383.0 28.2%
2 4 CH2M Hill Companies Englewood, Colo. $1,875.0 -18.4%
3 6 Parsons Brinckerhoff (PB) New York $1,289.0 17.3%
4 7 Black & Veatch Overland Park, Kan. $1,000.0 9.4%
5 8 Stantec Edmonton, Alberta, Canada $888.0 23.4%
6 10 Burns & McDonnell Kansas City, Mo. $491.0 17.7%
7 13 Sargent & Lundy Chicago $380.8 18.2%
8 15 Burns and Roe Enterprises Oradell, N.J. $240.0 9.8%
9 14 Gannett Fleming Harrisburg, Pa. $236.5 -2.6%
10 16 RTKL Associates Baltimore $231.5 18.5%
11 18 HDR Omaha, Neb. $194.8 16.2%
12 19 Leo A Daly Omaha, Neb. $175.3 25.2%
13 17 Stanley Consultants Muscatine, Iowa $171.6 -10.8%
14 NL Zachry Group San Antonio $161.9 NA
15 20 POWER Engineers Hailey, Idaho $145.7 13.5%
16 NL Carollo Engineers Phoenix $136.2 NA
17 NL Wink Companies Baton Rouge, La. $83.0 15.3%
18 28 EYP Mission Critical Facilities Palo Alto, Calif. $68.8 46.4%
19 27 R.G. Vanderweil Engineers Boston $68.0 29.8%
20 26 TLC Engineering for Architecture Orlando, Fla. $55.4 4.7%
21 29 Henderson Engineers Lenexa, Kan. $50.0 19.0%
22 31 KJWW Engineering Consultants Rock Island, Ill. $49.0 33.9%
23 NL M-E Engineers Wheat Ridge, Colo. $39.8 NA
24 NL Ulteig Engineers Fargo, N.D. $38.2 NA
25 30 Mesa Associates Madison, Ala. $37.0 0.0%
26 NL JBA Consulting Engineers Las Vegas $36.2 NA
27 NL Farnsworth Group Normal, Ill. $35.8 NA
28 32 Sparling Seattle $24.7 11.3%
29 33 Hankins and Anderson Glen Allen, Va. $24.2 17.5%
30 NL Commonwealth Associates Jackson, Mich. $18.4 NA
31 34 Heapy Engineering Dayton, Ohio $15.8 6.0%
32 36 Peter Basso Associates Troy, Mich. $13.1 12.9%
33 39 DLT&V Systems Engineering** Phoenix $11.1 56.3%
34 37 Proteus Group Chicago $9.3 4.5%
35 38 Spectrum Engineers Salt Lake City $8.9 0.0%
36 NL Realtime Utility Engineers Madison, Wis. $7.6 NA
37 40 FBA Engineering Newport Beach, Calif. $6.5 3.2%
38 NL Schmidt Dell Associates Pensacola, Fla. $5.9 NA
39 NL Interstates Engineering Sioux Center, Iowa $5.0 NA
40 NL Hawkins Design Group Mesa, Ariz. $2.8 NA
Notes:
*All design services revenue figures are based solely on an EC&M original survey answered by each firm, with the exception of URS Corp., which came from its 10-K statement filed with the SEC.
Top Electrical Design Firms*
2008 Ranking 2007 Ranking Company Location Revenue Specifically Related to Electrical Design Work in 2007 (millions) % Change (2006 to 2007)
1 1 Black & Veatch Overland Park, Kan. $396.0 23.8%
2 NL Burns & McDonnell Kansas City, Mo. $123.0 NA
3 7 CH2M Hill Companies Englewood, Colo. $73.0 17.4%
4 4 POWER Engineers Hailey, Idaho $71.5 -10.2%
5 5 Stanley Consultants Muscatine, Iowa $68.7 -5.0%
6 NL Zachry Group San Antonio $48.6 NA
7 8 Burns and Roe Enterprises Oradell, N.J. $48.4 10.8%
8 13 EYP Mission Critical Facilities Palo Alto, Calif. $41.0 105.0%
9 21 RTKL Associates Baltimore $34.0 246.9%
10 10 Mesa Associates Madison, Ala. $28.0 3.7%
11 15 Henderson Engineers Lenexa, Kan. $20.0 19.0%
12 14 TLC Engineering for Architecture Orlando, Fla. $18.5 5.1%
12 NL Carollo Engineers Phoenix $18.5 NA
14 NL Commonwealth Associates Jackson, Mich. $18.4 NA
15 NL JBA Consulting Engineers Las Vegas $15.9 NA
16 NL Wink Companies Baton Rouge, La. $15.5 NA
17 16 KJWW Engineering Consultants Rock Island, Ill. $15.4 1.3%
18 17 Sparling** Seattle $14.7 8.9%
19 NL Ulteig Engineers** Fargo, N.D. $14.7 NA
20 20 R.G. Vanderweil Engineers Boston $13.1 17.0%
21 22 Leo A Daly Omaha, Neb. $12.2 35.6%
22 NL Realtime Utility Engineers Madison, Wis. $7.6 NA
23 24 Gannett Fleming Harrisburg, Pa. $6.8 21.4%
24 23 FBA Engineering Newport Beach, Calif. $6.5 4.8%
25 26 Hankins and Anderson Glen Allen, Va. $6.0 20.0%
26 27 Spectrum Engineers Salt Lake City $5.9 20.4%
27 25 Heapy Engineering Dayton, Ohio $5.5 5.8%
28 NL Interstates Engineering Sioux Center, Iowa $5.0 NA
29 28 Peter Basso Associates Troy, Mich. $4.6 12.2%
30 29 DLT&V Systems Engineering Phoenix $3.8 40.7%
31 NL Farnsworth Group Bloomington, Ill. $3.0 NA
32 NL Schmidt Dell Associates Pensacola, Fla. $3.0 NA
33 NL Hawkins Design Group Mesa, Ariz. $2.7 NA
Notes:
*This list comprises the companies that break out electrical design services revenue from overall design services revenue and reported it through a proprietary EC&M survey. Our goal for next year's list is to use this revenue metric for ranking the firms. If your firm would like to participate in next year's survey, contact Staff Writer Beck Ireland at beck.ireland@penton.com.
Present and Future Challenges No. of Responses
Recruiting and retaining well-trained engineers and/or project managers 29
Weakening economy 8
Increasing pressure from clients for faster delivery times 4
Rising costs of health care and benefits for employees 4
Increasing pressure from clients to lower fees 3
Creating sustainable design 2
The decline in the residential market 2
Availability of equipment and materials 2
Managing growth 2
Increasing demand from clients for low-voltage work 1
Table 1. Although recruiting talent is at the top of the list, there are several other challenges firms are facing in 2008 and beyond.
Top Electrical Design Firms' Key Areas of Expertise No. of Responses
Design/Build 26
Energy Management 17
Operations and Maintenance 13
Project/Construction Management 10
Mechanical/Electrical/Plumbing 6
Table 2. Many firms turn toward design/build for faster project turnaround.
Firms With Fewer Than 500 Employees
Rank in Top 40 Company No. of employees in 2007 % Change (2006 to 2007)
40 Hawkins Design Group 18 -10.0%
39 Interstates Engineering 27 22.7%
38 Schmidt Dell Associates 30 15.4%
37 FBA Engineering 44 0.0%
34 Proteus Group 59 1.7%
36 Realtime Utility Engineers 65 20.0%
35 Spectrum Engineers 72 2.9%
33 DLT&V Systems Engineering 95 39.7%
32 Peter Basso Associates 115 8.5%
31 Heapy Engineering 146 4.3%
26 JBA Consulting Engineers 147 101.4%
29 Hankins and Anderson 152 18.8%
28 Sparling 160 10.3%
30 Commonwealth Associates 180 12.5%
23 M-E Engineers 250 NA
27 Farnsworth Group 301 15.8%
24 Ulteig Engineers 350 10.1%
18 EYP Mission Critical Facilities 350 12.9%
19 R.G. Vanderweil Engineers 372 14.8%
25 Mesa Associates 380 5.6%
20 TLC Engineering for Architecture 392 -0.8%
22 KJWW Engineering Consultants 404 41.8%
21 Henderson Engineers 420 20.3%
14 Zachry Group 451 NA
NA - Not available.
Table 3. Almost half of the firms in the 2008 Top 40 list have fewer than 500 employees.
Top Five Active Markets No. of Responses
Health care 19
Power (Utilities and T&D) 19
Government 18
Education and Institutional 17
Commercial Office Space 15
Water and Wastewater 12
Top Five Least Active Markets No. of Responses
Pulping and Paper 1
Mining & Metals 2
Petroleum/Chemicals 2
Automotive 3
Oil & Gas 3
Table 4. When asked to identify the markets their company is most active in, the Top 40 firms listed health care and power most often.
Future Technologies No. of Responses
Design automation, Building Information Modeling (BIM) or 3D CAD software systems 15
Renewable and energy-efficient technology 13
LED technology 2
Intelligent building products and technologies 2
More efficient UPS systems 2
Low-voltage systems 2
Table 5. Many respondents to the Top 40 survey cited renewable and energy-efficient technologies as the catalyst for changing the landscape of design.
Top 40 Year in Review

Jackson, Mich.-based Commonwealth Associates, Inc. (CAI) (No. 30) promoted John P. White, P.E., manager of CAI's office in Mount Vernon, Wash., to vice president. “John White's experience and knowledge of the northwestern United States combined with his exceptional leadership ability have allowed CAI to expand our presence in the region,” says Dennis F. DeCosta, president of CAI. “This has positioned us well to serve our current clients in the Northwest effectively and expand our client base.”

Carey Miller, P.E., joined Phoenix-based DLT&V Systems Engineering (DLT&V) (No. 33) as director of engineering, bringing with him more than 16 years of experience in the instrument, controls, mechanical, and electrical engineering fields. Based in Las Vegas, he is responsible for managing engineering activities and representing the firm's services in Nevada.

Farnsworth Group (No. 27) moved its offices from Bloomington, Ill., to the new Bank of Illinois building in Normal, Ill. The building was designed and constructed to achieve Leadership in Energy and Environmental Design (LEED) certification. Six of the firm's employees became LEED-accredited professionals (APs), all located at the company's headquarters. The new APs are: David G. Burnison, AIA, NCARB; Michael J. Sparks, AIA; D. Edwin Lind, P.E.; L. Matthew Stotler; Alexander D. Webber; and Julie Sass. This makes 25 LEED APs for Farnsworth company-wide. In addition, the company was honored with two merit awards by the American Council of Engineering Companies (ACEC), Washington, D.C., in the Illinois Engineering Excellence Awards competition.

Rock Island, Ill.-based KJWW Engineering Consultants (No. 22), was the recipient of several engineering awards for its sustainable design work on the Harm A. Weber Academic Center at Judson University, Elgin, Ill. The awards include the Honor Award from the ACEC's Illinois chapter and a merit award in educational facilities from Midwest Construction magazine. In January, Jeff Pratt, P.E., LEED AP, was named a principal of the firm. “Jeff Pratt has demonstrated top-notch work habits and leadership throughout his career at KJWW, says Paul VanDuyne, P.E., president. “He has the respect of the entire organization, and we are very happy to add his talents to the group of principals.”

Troy, Mich.-based Peter Basso Associates (PBA) (No. 32) won the honorable mention prize in the 2007 Excellence in Design Awards competition for PM Engineer magazine for its work on the Whitmore Lake High School project in Whitmore Lake, Mich. The Excellence in Design Award honors those projects with the most unique designs in the plumbing, piping, hydronics, or sprinkler market segments. PBA provided the mechanical, electrical, and plumbing engineering services for the new high school, which was designed to achieve a LEED certification rating. In January, the national organization of the Council of Educational Facility Planners International (CEFPI) approved the local chapter bylaws for a new Michigan chapter. PBA led the effort of founding the chapter. CEFPI is the only professional organization whose main purpose is improving the places where children learn. Members include architects, planners, engineers, K-12 administrators, higher-education professors, construction management firms, and maintenance/operations professionals. The Michigan chapter was formed to enhance the activities of and provide access to the?International Council to those professionals, institutions,?and corporations actively involved in planning, designing, building, equipping, and maintaining schools and colleges in the state.

Effective Sept. 18, 2007, Muscatine, Iowa-based Stanley Consultants (No. 13) elected Gayle A. Roberts, P.E., president and chief operating officer. Gregs Thomopulos, former president and CEO, was elected chairman and CEO of the firm. Dick Stanley, former chairman, was elected chairman emeritus and continues to be a director of the company. “We have been preparing for this leadership transition for several years, and I am pleased to be able to hand over the day-to-day operations of the company to Gayle after 20 years in this position,” says Thomopulos. “This change will enable me to devote more time to the company in a global perspective, through my leadership positions in the engineering industry in the U.S. and internationally.” In addition, the firm opened an office in St. Louis with Dave Goetz, P.E., serving as manager.

Overland Park, Kan.-based Black & Veatch (No. 4) opened a new office in Alberta, Canada's capital Edmonton. The new office enhances the firm's global capabilities, extending the company's reach into Canada. “Edmonton is an economic hub for northern and central Alberta and a major center for the oil and gas industry,” says Kent Pollins, senior project director for Black & Veatch. “We are applying our expertise to help develop Canada's natural resources to assure a more secure energy future for the region.” In September, more than 200 professionals worldwide from the firm participated in the company's first environmental cleanup day. Participating office locations include: Dublin, Calif.; Overland Park, Kan.; Conyers, Ga.; Cary, N.C.; Redhill, U.K.; and Bangkok, Thailand. In addition, professionals working on a construction project in Brilliant, Ohio, also participated in the global environmental workday. “Black & Veatch is dedicated to enhancing environmental awareness among its professionals, its clients, and within the neighborhoods and cities where we live and work,” says Hal Smith, president of the company's Construction & Procurement Division, which led the environmental cleanup day. “Our professionals will be working with existing community organizations focused on the environment. These organizations are responsible for cleanup and improvement of beaches, parks, wetlands, and associated other projects to make these areas more enjoyable for their respective communities.”

Salt Lake City-based Spectrum Engineers (No. 35) named David E. Wesemann, P.E., LEED AP, as vice president and full member of the board of directors and Lynn J. Langford, CPA, as treasurer. Langford remains a full member of the board of directors. Dr. Truman Henard Jr., P.E., and Robert Bader, P.E., joined the firm as principal electrical engineer and principal mechanical engineer, respectively. Scott Morgan, CISSP, joined the firm as principal information technology designer. Aaron Abbott was hired as associate technology designer, M. Troy Smalley, P.E., as mechanical project engineer, and Marie Aitken as lighting designer. The firm relocated its Tempe, Ariz. office and has added two new employees who will work from the new location: Radoslav Radlovic, M.S., P.E., associate mechanical engineer, and Sam Buhr, BSEE, associate electrical engineer. Several 2007 International Illumination Design Awards (IIDAs) were presented to the firm for interior lighting design at South Jordan Library, South Jordan, Utah; Blessed Sacrament Catholic Church, Sandy, Utah; St. Thomas Aquinas Catholic Church, Hyde Park, Utah; St. James Catholic Church, Ogden, Utah; and St. John's Episcopal Church, Logan, Utah. Regional IIDA awards of merit were presented for the South Jordan Library and Blessed Sacrament Catholic Church. The company also won, for the fifth consecutive year, Best of State medals. This year's medals were in the Science and Technology category for mechanical engineering, electrical engineering, and lighting design. The Utah chapter of ACEC recognized Spectrum's electrical engineering on Overstock.com's data center in Cottonwood Heights, Utah, with a 2007 Engineering Excellence Honor Award.