Arconex

The Arconex Group is consortium of construction, engineering and architecture firms. Group members have completed an aggregate of $10BN+ of NYC construction work. Extreme fragmentation exists with the construction industry. Approx 10,000 active licensed and insured GCs operate in NYC alone. This works against customers and good construction companies. Fragmentation works against customers. It has become hard for customers to pick the right firms out of the noise. There is inconsistency of project delivery. Prices and quality are scattered. Bid scattering steers customers to less qualified low-bid winners that often fail during projects. The industry is traditionally riven with acrimony, short-termism and fragmented accountability. Fragmentation works against GCs. Its hard for good GCs to break through the noise. Low-ball bid competition makes many projects non-viable/loss-making. Diffuse and intermittent demand produces revenue lumpiness and volatility for GCs. Siloing produces information opacity in supplier/sub-contractor sourcing, pricing and quality. Operating efficiency is reduced. Revenue volatility and lumpiness for GCs generates many of the industrys problems. When there is a gap between lumps of project revenue, staff are often laid off. Employee tenure periods are reduced. Low tenure periods reduce incentives to invest in training staff. Unpredictability results in ad-hoc non-rigorous hiring processes. Incentives are reduced to invest in technology and other business polishing processes. Significant challenges exist to scale GC businesses. GC companies suffer from low PE multiples/valuations, an illiquid M&a;A market and succession problems for GC founders. Non-founder executives find managing such volatility very challenging. GC founder-owners find it hard to corporatize their businesses though delegation to executives. Arconex supports consortium members through several channels. Promoting its firms through facilitating long-term relationships with a network of strategic partners generates revenue ...