KC's big engineering companies celebrating 100 years and more in business

07/21/2014 10:37 PM

07/22/2014 12:32 PM

Kansas City has been a center of engineering excellence for a century, its firms producing everything from local bridges and gathering places to power plants halfway around the world.

Three of the top 25 firms in the Engineering News-Record 2014 list of top design firms are based in the area, with more than 300 years’ history among them.

HNTB turned 100 this year. Black & Veatch does so next year. And Burns & McDonnell marked a century in business in 1998.

All told, the three employ more than 17,000 people, including about 10,000 locally.

Here’s a look back, and ahead, for the firms just turning 100.

The firms have adapted to a changing business environment that just continues to change. Last week, for instance, two of the three largest U.S. engineering firms against which the locals compete — California-based AECOM and URS — announced a plan to merge. If the deal goes through, the conjoined company will have more than 95,000 employees and $19 billion in annual revenue.

And yet the prospect of competing against such a behemoth doesn’t scare HNTB’s Central Division president, Tom O’Grady.

“We compete with those firms regularly,” said O’Grady. “We are very transportation-focused. Ninety percent of our business is transportation engineering. Those firms do transportation engineering, but many other forms of engineering. Their transportation practice is not 95,000. It’s closer to our size.…

“Our ability to pursue and win projects comes from having the right project managers with the right project principles, who understand what our client needs and who give the client the confidence that we can deliver the work. And that allows us when competing against a company like that … to give them the confidence that they are our focus.”

O’Grady added: “We’re very innovative. We invest heavily in that, and we’re not spread across multiple engineering disciplines. It gives us, in that space, a competitive advantage.”

HNTB made its name in the early 20th century as a designer of vertical-lift bridges, some of which, like the Steel Bridge in Portland, Ore., are still in use today. From there it expanded into toll roads, highways, airports and sports stadiums. It remains involved in all those fields today, with the vast majority of its work for government units in the United States.

HNTB played a big part in the postwar interstate highway boom. It designed the New Jersey Turnpike, parts of what is now Interstate 70 in Missouri, and Boston’s massively expensive “Big Dig” Central Artery/Tunnel. The world’s largest-diameter drill, nicknamed Bertha, that got stuck while tunneling for a new roadway beneath Seattle in December? That’s part of an HNTB-led project, too.

Local projects of note include Bartle Hall, the Kit Bond Bridge over the Missouri River and the Kansas Speedway.

Global growth

Black & Veatch, on the other hand, is more of a global firm, with employees working in more than 100 countries on projects in water treatment, energy production and telecommunications. Only a relatively small portion of its business comes from government contracts.

And yet the firms share a hometown and an ability to change with the times.

Jim Lewis, now the chief administrative officer at Black & Veatch, got his start at the firm in the 1970s. He got to interact with founder Nathan T. Veatch before Veatch’s death in 1975. Ernest B. Black had died in 1949.

Black and Veatch were classmates at the University of Kansas, and the firm’s early work included contracts to supervise the building of military training camps during World War I.

Water and power projects soon took on importance, and after World War II, Black & Veatch did work for the U.S. Atomic Energy Commission at Los Alamos National Laboratory, which is best known as the home of the atomic bomb. Black & Veatch has designed plants that generate electricity using coal, gas and nuclear power. Today it’s working with the latest energy technology, liquefied natural gas.

“In about the 1970s, we started opening other offices in places like Orlando, Fla., and Denver,” Lewis said. “About that time, too, we started doing work in Southeast Asia, and that was a key transition (former executive) Allen Acheson got us into. At the time, Southeast Asia needed engineering help, so we were able to compete there really well. Europe was a tougher market.…

“Then we bought Pritchard (Corp.) in 1985; they’re oil and gas. That kind of moved us from power and water into oil and gas.

“Then we bought Binnie and Associates, and basically they were in the U.K. and Southeast Asia, and that kind of moved us into the water business in Southeast Asia.…

“Probably the next big thing was telecom,” Lewis said. “Our power division had always had transmission lines and substations, but it was just part of the big business. At some point fiber optic came to be a big deal. Putting in a transmission line and putting in fiber optics are similar, and a lot of it is about picking the route and getting permission; the right of ways and all that. So we had people who knew how to do that, and we aimed them at fiber, and we put in a lot of fiber. That got us into the telephone side of things and eventually we got into the wireless side of things.”

Lewis said the telecom division grew internally from about 300 people in 2007 to 1,600 now.

“A lot of it is just helping the wireless carriers keep up with all the latest technology,” he said. “If you look around, you don’t see a lot of towers being built, but a lot of those towers are being worked on. Think about it as ‘the cabinets are being upgraded.’”

Lewis said Black & Veatch’s central location has been an asset throughout its history.

“You can get to both coasts fairly easily,” Lewis said. “There are a lot of universities around here that have strong engineering programs, so when you go to hire people you have an advantage.

“If you grow up in the Midwest, you often want to stay in the Midwest. So we are able to hire people and have good retention. When I got my 35-year watch, there were 90 others who got theirs the same night.…

“The other thing is that the work ethic is good in the Midwest. Our people are about the clients and the work they do. They are about the work schedule and the total install costs of a project. Those are Midwest values our clients like and count on.”

Commitment to clients

HNTB officials speak of their commitment to the client, not the project.

“We want to work for the client and not just deliver individual projects,” O’Grady said. “We want to understand what they value. Are they focused on increasing safety? Do they want to do more with less money? Are they just focused on getting through the next election cycle? Understanding that helps us work with them and identify how to deliver their project.

“The selection process in our business is qualification-based … and our qualifications are well known to them because we are well known to them.…

“Unfortunately, we don’t win all of them, but we do win a good percentage because of those qualifications.”

That way, O’Grady said, HNTB gets all-important repeat business.

Like Black & Veatch, Howard, Needles, Tammen and Bergendoff began life as a partnership among its principals and then changed in the late 20th century to an employee-owned company.

Ernest E. Howard, Enoch Needles, Henry C. Tammen and Ruben Bergendoff struggled to keep their firm alive through the Great Depression. Bergendoff was even dismissed during the depths of the Depression, only to rejoin a few years later.

HNTB’s first office outside of Kansas City was in New York in 1922, with an eye toward getting close to Wall Street and understanding the revenue-bond financing of the massive infrastructure projects the firm was pursuing.

Toll bridges and roads soon formed a major portion of the company’s business. O’Grady said that with political gridlock leaving the Highway Trust Fund teetering on the verge of insolvency for the past several years, more toll roads are in the nation’s future.

“What’s happening is that all states and cities and regions have to find ways to fund their transportation needs,” O’Grady said. “The gas tax has not increased since 1993. It’s 18.4 cents a gallon, and cars are more fuel-efficient. Inflation in construction has gone up significantly, so the ability to fund the needs with those dollars keeps declining.

“Cities say ‘How can we raise more money for this?’ Some states have increased their gas taxes; some have gone to toll roads. Some have proposed sales taxes, as Missouri is doing in the election on Aug. 5.

“It’s either that or things are going to crumble. It’s too important. People need to get to work. We need to be moving freight around to be competitive in the world market.”

HNTB grew through internal growth as well as strategic acquisitions. In 1973 it acquired Henry B. Steeg & Associates of Indianapolis, a firm that specialized in water projects — one area where its business overlaps with Black & Veatch.

In 1975, it acquired Kivett & Myers, the locally-based architectural firm that designed some of the town’s most iconic buildings, including the Truman Sports Complex and Kansas City International Airport.

In 1992, the firm faced a crisis. It was held liable for $42 million in damages in a lawsuit after a man was critically injured in a crash that occurred on the Dallas North Tollway, an HNTB project. According to a centennial history book, “Being HNTB,” written by Peter S. Hawes, the firm’s lawyer said the judgment left it essentially bankrupt.

That led to the dissolution of the Howard, Needles, Tammen & Bergendoff partnership and the firm’s incorporation as HNTB. It created five geographic divisions and began to concentrate on so-called megaprojects. It won contracts to design a new terminal at Chicago’s Midway Airport, a new football stadium for the Denver Broncos of the NFL and an expansion of San Francisco’s Bay Area Rapid Transit system, among others.

The hits kept on coming in the 2000s, with the renovation of Kauffman Stadium and several other stadium projects, the San Diego Convention Center, plus a variety of the road and bridge projects that had always been its bread and butter.

Today, HNTB is at work on the Johnson County Gateway project, a renovation of the spot where Interstates 35 and 435 and Kansas 10 come together, and the new Kansas City streetcar line. It has about 3,800 employees in 60 offices across the country.

O’Grady said HNTB’s success through a century “really comes down to integrity and having a reputation for integrity.”

“It’s about innovation and development of our employees — utilizing the natural tendency toward innovation the employees have,” he said. “You plan your work and work your plan. That’s what we use in all our projects, and that’s how we run our business. As conditions change, you adjust your plans, but you are constantly working from a plan.”

Projects that make a difference

Black & Veatch is looking to the future as it adds an “innovation pavilion” to the front of its 1976 headquarters building that has already been expanded once. When it opens this fall, it will have an auditorium, meeting rooms, a grass roof, a geothermal heating and cooling system and solar panels.

The company has more than 10,000 employees in more than 100 offices worldwide. Revenue last year was $3.6 billion, and Lewis said the goal is to grow that to $7 billion by 2020.

“We have a growth initiative we are using to do that,” Lewis said. “We’re going to go overseas. We have a desire to go to India and the (Persian) Gulf Cooperation Council countries.

“There are some new businesses we are looking at; the notion of a smart, integrated infrastructure. We’d like to grow our air pollution (control) business quite a bit, cleaning up the exhaust from coal-fired power plants.… It’s good to build stuff that helps the environment and sustainability … and for us to do projects that make a difference.”

Black & Veatch

HTNB

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