Structural integrity | Construction firm Nickerson & O'Day more than triples its volume in a new era
Photo/Jackie Farwell
Karl Ward, president and CEO of Nickerson & O'Day, at a job site in Brewer
A yellowed list hangs in the entryway of Nickerson & O’Day’s offices in Brewer. The typewritten document catalogs every job, starting with the construction company’s very first: a 1952 renovation of Dead River Co.’s offices, a project that totaled $2,174.
Today, Nickerson & O’Day tops $36 million in annual revenues. Look around greater Bangor, and the company’s work springs up at every turn: Bangor’s central fire station, Hermon High School, the University of Maine, Bangor Public Library, Brewer’s Public Safety building, Eastern Maine Medical Center, Bangor International Airport.
Since Gerry O’Day and Leroy Nickerson founded the company nearly 60 years ago, it has become one of eastern and central Maine’s go-to construction firms. Most years, 80% of its business comes from repeat customers. That’s significant in a market of greater Bangor’s size — word, both good and bad, gets around. According to President and CEO Karl Ward, the company’s name invariably comes up when prospects for big commercial projects arise. The company’s rock-solid reputation, and Ward’s audacious leadership, helped make it Maine’s eighth-largest construction firm by revenue last year.
“They know us because we stand by our work,” Ward says, sitting in his Brewer office. Over his shoulder, a sign tacked to his bulletin board reads: “Res ipsa loquitur.” The Latin phrase means roughly, “The affair speaks for itself.” Ward offers another translation: “There ain’t no faking it.”
Just that morning, Ward had received a text message from Jack Kelley, who fully retired as Nickerson & O’Day’s president in 2007. Kelley, the onetime head of the Associated General Contractors of America, has much to do with the company’s reputation, and is known as a “star” in the construction industry, according to John O’Dea, executive director of AGC of Maine. Ward, an AGC of Maine board member, has made a name for himself, and others in the company’s upper ranks, like Loren Clarke and Randy Poulton, are well known, O’Dea says. “Nick O’Day is one of those companies that if you call them, you won’t have to worry about how the project works out,” he says.
New plans
Longevity permeates the air at Nickerson & O’Day. The company has remained in the same office, at the end of the same rutted dirt road near the Brewer Airport, nearly since its founding. Its first office manager was hired in 1963 and didn’t retire until 1995. The average employee tenure is 14 years. The company’s durability is not lost on Ward, who met his future wife, Kathy, in the University of Maine’s Gannett Hall, which Nickerson & O’Day built in the 1960s. “People will get married in those things that we build,” he says. “People will have babies in those things that we build.”
Ward, 46, joined the company in 1993. Up until 2002, Nickerson & O’Day typically saw sales of $8 million to $10 million a year. The company was turning down work, and Ward was confident it could handle $35 million to $50 million annually. Among his first moves was flattening the management hierarchy in place under Jack Kelley. “It looked like the Matterhorn, one guy at the top,” Ward says. The model had worked well for many years, but Ward knew he needed to delegate responsibilities if the company were to grow. “How do you get there without shocking the company and creating chaos?” Ward says he asked himself at the time.
Ward doubled the size of the office and home office staff, computerized processes, standardized procedures and improved communication with job sites. His mantra, repeated so often his employees got sick of it, became “Make things better but keep what’s good.” It was a lot of change for such a well-established company. “There was a lot of resistance to the plan,” Ward says. “I just wasn’t going to let it go.” Today, he feels he’s earned the trust of his roughly 50 employees. After a tough year for the company and the construction industry as a whole, Ward had to tell his workers not to expect pay increases or bonuses this year. He takes heart in the fact that no one complained.
A baseball coach and avid mountain biker, Ward tends to frame his business philosophies in sports terms. He speaks of hiring employees like choosing members of an athletic team, carefully selecting the right ones, giving them a chance to learn from mistakes, clearly outlining expectations and then letting them play. Hard work, attention to detail and perseverance pay off in the construction industry, Ward says, and you “can always tell when you’re up against a shady company” that hasn’t put in its training time.
Ward’s also mindful of his team's reputation. Nickerson & O’Day’s employees are “constructors,” not “builders,” he says, making the distinction between his company and what he considers to be smaller, less sophisticated firms. He doesn’t mind losing a bid now and then if it means maintaining the company’s reputation.
Solid foundations
Nickerson & O’Day typically subcontracts about 75% of its work, performing the rest in-house with its own employees. The ability to do its own shingling, window installation, steel erection and other work sets the company apart from construction firms that solely manage, Ward says. “It gives us an added dimension of flexibility,” he says. “It gives us a competitive advantage as well because there isn’t a markup on that work.”
One of Nickerson & O’Day’s most prominent recent projects was Brewer’s $6.5 million public safety building. The 30,000-square-foot facility, opened in October, is home to three pieces of steel from the Sept. 11, 2001, collapse of the World Trade Center towers. Ward, along with a city fire captain and police sergeant, traveled to New York’s JFK Airport to handpick the steel from wreckage that was made available for display in public buildings. That effort, and the building itself, speaks to Nickerson & O’Day’s workmanship, according to Brewer City Manager Stephen Bost. “They have been great to work with at all levels,” he says. “Their project management is excellent.”
The company is now in the midst of constructing a new $28 million pre-kindergarten through eighth grade school in Brewer. Ward stopped by the site on a recent day earlier this month, surveying the steel structures that by mid-2011 will house up to 1,100 students, making the school the largest of its kind in the state. The site also will include a performing arts center and eight-lane track.
“This is really solid construction,” Ward says, a satisfied grin spreading over his face under the shade of his hardhat. The project will employ 700 to 900 workers throughout the full construction process, with 50 to 150 on site on any given day.
Educational facilities are a staple of Nickerson & O’Day’s portfolio. The company’s largest project last year was construction of a $13.1 million meeting facility at Husson University in Bangor. Plans included a 550-seat theater, alumni center and new two-story academic wing. Nickerson & O’Day also built the Robert D. O’Donnell Commons on the university’s campus, a $7 million, 40,000-square-foot structure that houses classrooms, a 100-seat lecture hall, offices and lab. The project was finished within a year after design began and came in 4.5% under budget, according to the company.
Nickerson & O’Day has built, expanded and renovated countless structures at the University of Maine in Orono, including Raymond Fogler Library and Buchanan Alumni House. As John O’Dea of AGC of Maine put it, “They always have a sign on the university campus somewhere.” The company renovated the Wells Commons dining hall, a $9 million project that added banquet and outdoor dining space and a glassed-in function space that overlooks the athletic complexes. It earned silver Leadership in Energy and Environmental Design certification from the U.S. Green Building Council and 85% of the construction debris was recycled.
Green building work increasingly makes up Nickerson & O’Day’s portfolio. Ward, the company’s chief estimator and five full-time project managers are LEED-certified. The company recently completed construction of the $5.7 million MDI Biolab in Salisbury Cove, the first LEED-certified biomedical research lab in Maine. The building is gold certified, and was constructed with soy-based insulation and wood from trees harvested during site clearance. Last year, a $7 million residence hall constructed by Nickerson & O’Day opened at Foxcroft Academy in Dover-Foxcroft. The dormitory and faculty housing was built with sustainably harvested lumber and an eye toward recycling.
“People are much more environmentally conscious, and that’s rolling into our business,” Ward says. As for what Gerald O’Day and Leroy Nickerson, traditional men from another generation, would make of the green efforts, “They’d scoff and laugh and say it’s completely unnecessary,” Ward says.
The founders might share, however, Ward’s frustration when major municipal, hospital and university projects are awarded to out-of-state firms. For every $1 spent in state on construction jobs, $7 is generated toward regional economies, he says. Awarding jobs to firms outside the state is like “scooping the cream off the top, loading it on a truck and sending it over the river" (to New Hampshire and beyond), Ward says. He’s also troubled that the industry’s skilled workers aren’t being replaced — the average age in the construction industry is 48. In the late 1960s and early 1970s, Nickerson & O’Day employed more than 300 people.
Nickerson & O’Day’s future will lie in continuing to do what it has always done, defining success at the beginning of every project, he says. The company took that approach with the Dead River renovation recorded on that list in 1952, and is doing the same with its latest project, numbered 2009-63 in today’s computer system. Nickerson & O’Day may not be the cheapest firm in town, but its focus is on high service, not low bids. “What we’re trying to do here is hone those skills until no one can beat us,” Ward says.
Jackie Farwell, Mainebiz staff reporter, can be reached at jfarwell@mainebiz.biz.
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