ENR California 2015 Contractor of the Year: Contractor Enjoys Dramatic Growth by Giving Its Level Best
Source: ENR California
The founders of Sunnyvale-based Level 10 Construction set some rather ambitious goals for their new company when it debuted in September 2011. Though the Bay Area’s post-recession construction boom was only just finding momentum, a revenue target of $500 million within the first five years seemed achievable to the firm. Another objective was to make an immediate impression on prospective clients by establishing an across-the-board reputation for consistent performance at the upper end of the conceptual “1 to 10” rating scale—the inspiration for the firm’s name.
Not yet four years old, Level 10 has done all that, and more.
Having eclipsed its original revenue target by nearly $123 million last year, Level 10 says it is on track to reach $750 million in 2015, thanks in part to high-profile projects such as the $540-million, 802-ft-tall 181 Fremont residential and office tower in San Francisco; the $578-million Moffett Place mixed-use campus in Sunnyvale; and the $435-million Frank Gehry-designed Facebook West Campus in Menlo Park.
Level 10’s two-year-old San Diego office has likewise quickly established itself in Southern California’s higher education and biotechnology sectors, with renovation projects at the University of San Diego, plus the recent award of two laboratory and R&D facilities that will support research into drugs and technologies for fighting cancer and other diseases.
But Level 10’s accelerated ascent is hardly beginner’s luck: Its leadership team is made up of alumni from longtime West Coast contractor Rudolph & Sletten.
“We had done these things in other companies and were accustomed to high demand,” says Jim Evans, chief financial officer. Evans characterizes Level 10 as more of a spin-off than a typical start-up. “It was easy to get going quickly.”
Dennis Giles, the firm’s president, adds that the founders’ respective industry reputations aided in quickly forging relationships among subcontractors and prospective clients.
“We received a lot of inquiries from people asking if we were looking for help,” Giles says, adding that Level 10’s staff now totals more than 500, more than half of which are in craft positions.
At the same time, Level 10 afforded its founders the opportunity to structure the new firm around success factors gleaned from their collective experience, such as self-performing concrete and foundation work. The team also emphasizes employee satisfaction and development.
“We’re a very flat organization, with no constraints on how we do business,” says Bob Maxwell, senior vice president of business development. He also heads Level 10’s San Diego office. “It’s sometimes difficult to introduce change in long-established organizations. For us, if someone has a better way, let’s see what it takes to implement it. We’re open to new ideas.”
Being based in the heart of innovation-oriented Silicon Valley, Level 10 honed its problem-solving abilities early on by working on projects for like-minded fast-track tech firms.
“Here, speed to market is everything,” Giles says. “Companies are in growth mode, and they need these facilities in a short period of time. So it’s essential to create a good design and schedule collaboration with the architect and owner.”
Such was the case with Menlo Park biotechnology firm CS Bio Co., which hired Level 10 for a headquarters renovation and expansion project that includes a three-story addition and an 11,700-sq-ft peptide manufacturing facility with 7,400 sq ft of clean room space.
“We were growing faster than expected, but Level 10 adjusted well to changes in design,” says Jason Chang, CS Bio’s vice president of operations. He credits Level 10 for keeping a firm handle on project costs as improving market conditions began pushing demand for trade services upward.
“Some of the subs wanted to change their bids or assign different people to the project,” Chang says. “Level 10 said no, insisting that the subs provide the personnel promised at the original bid price. They took ownership of the process.”
David Koury, vice president of real estate and site operations for digital storage developer HGST, admits to having reservations about Level 10’s explosive growth when searching for a contractor for two new buildings totaling 252,000 sq ft at its San Jose campus.
“As soon as we got to the interview, those concerns were put aside,” Koury says. “We saw they had recruited the right people we wanted to work with.”
Koury says he was impressed with Level 10’s adaptability when $10 million of underground utility relocation work was unexpectedly added to the project at the last minute to ensure that HGST’s
microelectronics manufacturing center would remain operational after construction began.
“Level 10 immediately staffed up as if the relocations were part of the original scope of work,” Koury says. “They worked seven days a week and through holidays so that they could access the building site and start the foundations as soon as possible. It was high stakes for them and for us.”
Giles says Level 10 thrives on tackling projects with complex issues and difficult sites. For example, 181 Freemont features piles as deep as 264 ft, a 3-ft-thick mat slab and a five-level basement on a site surrounded by other large-scale construction projects, including the Transbay Transit Center. And, at Stanford University, tight schedule demands allowed just 12 weeks to renovate the 135,000-sq-ft, seven-wing Florence Moore Hall dormitory.
Despite its rapid growth, Level 10 has maintained its commitment to core construction principles, including safety. With an EMR of 0.59 and more than 1.5 million work hours logged without a lost-time incident, Level 10 has consistently received honors from the Construction Employers Association, including a 2014 President’s Safety Award.
Another Level 10 fundamental—keeping top-level staff engaged with clients throughout the project—has made an impression on clients such as Melissa Plaskonos, director of campus construction and utilities at the University of San Diego.
“There will always be issues in a construction project, but they deal with them well,” Plaskonos says. “They also put a lot of effort in hiring good people who have the right cultural fit.”
While Level 10’s field teams routinely use iPads that provide direct access to project BIM models—including those created by its in-house staff—Paul Moran, vice president of operations, says that not everyone on a project team is at the same stage technologically.
“Our projects involve all kinds of subs, with varying degrees of sophistication,” Moran says. “If someone needs help understanding our technology or something else, we’re able to get it to them.”
Giles is confident that Level 10 will be able to continue its upward trajectory, and he foresees no shortage of work for the next several years.
“San Francisco has never been busier,” he adds. “All the universities continue to build, and demand for buildings and public works projects remains strong.”
Perhaps the only constraint will be the availability of talent to help manage and execute those projects. From the outset, Level 10’s leadership has been careful to balance its aspirations with the realities of its resources, and the firm turns down some work as a result.
“If you don’t have the right people in place and do a bad job, it stays with you forever,” Giles says. “To get bigger, we will definitely need more key people.”
Recruiting the top talent is a key strategy for the contractor, says Ken Sletten, Rudolph and Sletten co-founder and 2015 ENR California Legacy Award winner, who came out of retirement in 2011 to join his former colleagues as managing director of Level 10’s advisory board. Sletten told ENR earlier this year that at his former company, “we wanted the best, the smartest and the ones that had ambition. We are still doing that over here.”
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