The 2004 Profile of

In journalism,
it’s conventional
to tell readers the
who, what, where,
how and why of
a story, and that’s
what we’ve done
in interpreting the
survey results
from the 2004
PROFILE OF THE
ELECTRICAL
CONTRACTOR.
the ELECTRICAL
ELECTRICAL CONTRACTOR has taken this mountain
of data and explained:
✱ WHO YOU ARE (size and revenue of company,
and its race and gender breakdown)
✱ WHAT YOU DO (project type)
✱ WHERE YOU DO IT (new construction, retrofit
or maintenance)
✱ HOW YOU DO YOUR WORK (working with specs,
material purchasing and computer use)
✱ WHY YOU CHOOSE THE WORK YOU DO
A COMPREHENSIVE
PICTURE
T
HE BIANNUAL PROFILE, a feature of
this magazine for more than four decades,
aims for a comprehensive picture of con-
tracting from your perspective, providing an indi-
cation of where your business fits into the overall
industry, while giving us a guide to the news and
information that is important to you.
The survey garnered 865 respondents, an
increase of 152 from the last survey in 2002. It
was the first time we employed the Internet, and
the majority of responses (505) came through
that source. Is that a coincidence? Probably not.
Our survey reveals most of you have discovered
the business benefits of computers. Since 2002,
a slightly higher percentage of respondents used
computers for word processing, Internet access
(including buying supplies online), accounting,
e-mail and other basic office functions. However,
technology as a construction tool has grown by
leaps and bounds:
www.ecmag.com
CONTRACTOR
By John Fulmer
® Estimating-software use is up from 54 percent
to 70 percent
® Job-cost control and analysis use grew by 20
percent
® CAD use doubled from 20 to 40 percent.
Why? Because construction software’s ability
to streamline and consolidate project manage-
ment—from estimating to change orders—can
give a competitive edge. And the construction-
software industry has responded to contractors’
needs by improving existing programs, delving
into new areas, and designing “lite” or graduated
versions of their products to fit contractors of
all sizes.
And here’s a programming note: We’ve des-
ignated “small” firms as those with up to nine
employees; “mid-size” with 10 to 19; “large”
with 20 to 99; and “very large” as those with
100 or more. Sixty-two percent of responses
came from small firms while 10 percent came
from mid-size, 15 percent from large and 11
percent from very large firms.
JUL.04 ELECTRICAL CONTRACTOR 23
2004 CONTRACTOR PROFILE

WHO ARE YOU? in those two areas, except that Caucasians— 2002 and which may point to a growing

S
EVENTY-ONE PERCENT of firms at 87 percent—and males dominate. We can,
interviewed took in annual revenues however, parse the data to find 37 percent of
of $1 million or less and just 10 per- firms have minorities in management or field
cent made $10 million or more (See Figure positions, and those with women (in execu-
2). The majority of contractors have some tive or field positions) or minorities are usually
college education (8 percent who responded mid-size to very large contractors with $1 mil-
had electrical engineering degrees) and their lion plus annual revenue. Also, firms hiring
firms are diverse in race and gender, though minorities for management or field positions
in somewhat surprising ways. For instance, often hire females for nonclerical jobs, sug-
while 42 percent of firms polled employ gesting the firms are either more diverse or
women, they are woefully underrepresented these employees may be minority females.
in traditional job categories such as jour- Firms hiring minorities tend to be located
neymen at 3 percent or apprentices at 4 in the West and South with Northeast firms
percent. As you might expect, women make lagging behind in minority personnel. Texas,
up a sizable portion of clerical workers, but with its large Hispanic population, charts as
the “executive” category, which includes one the states with the most diverse electri-
owners, has the next-highest percentage of cal-contracting work force.
women employed at 13 percent. It’s doubt-
ful all of them are owners and therefore An educated work force
probable many are hired into marketing,
It’s pretty safe to compare education data
accounting and human resources. for 2004 with those from 2002; the fig-
This is the first time our survey takes race
ures haven’t changed appreciably. Two
and gender into account, so it’s hard to draw
years ago we reported 68 percent of survey
big-picture conclusions about the work force
respondents had some college, 18 percent
had a BA degree and
14 percent an AA
FIGURE 1. Firm Size: Number of Employees degree. Our 2004
survey shows:
10–19 ® 60 percent of you
100+ 10% have had some college
20–99
11% 1–9 ® 13 percent earned
15%
62%
an AA degree
® 15 percent a BA
degree.
As noted earlier,
8 percent of contrac-
tors had an engineer-
ing degree, a figure
that doubled since
trend in integrating power distribution and
low-voltage projects and the continued high
popularity of design-build. (But more about
that later, when we talk about what you do.)
In general, firm size has little to do with
higher education; the figures are more or
less evenly distributed. The biggest gap is in
BA degrees and occurs between very large
firms where 24 percent of employees had a
bachelor degree and small firms where 13
percent of employees earned one.
To get a more personal perspective, we
asked about hobbies, also a first-time ques-
tion. About half the respondents engaged in
four or more of the leisure-time activities
listed, and we found the highest percent-
age, 59 percent of those surveyed, like to
work around the house in their spare time.
Yet another “why,” but one that’s pretty
easy to answer. Contractors work hard
and feel a sense of accomplishment in
what they do for a living, in building and
improving things. So it’s no surprise that
“home improvement” tops the list and that
a contractor’s work ethic and pride in a job
well done is put to good use on days off.
Contractors love to travel (51 percent) and
enjoy the great outdoors: 39 percent chose
hunting and fishing as the third-favorite
hobby. Watching sports came in fourth, music
and theater placed fifth and woodworking
came in sixth, indicating there are some sofa
spuds, culture vultures and closet carpenters
in our ranks. The eternally frustrating game
of golf notched in at seven, followed by clas-
sic/antique cars, playing sports, cooking and
wine, and last, a group listed auto racing as
their favorite pastime. A diverse and interest-
ing bunch, indeed.

FIGURE 2. Revenue Less than FIGURE 3. Racial Composition of Firms

$250k
$25 million+ 44% White or Hispanic Other—
4% $2.5 million $250k to caucasian 6% including Asian
to $10 million $1 million 87% 3%
9% Black or
27% African-American
$10 million $1 million
4%
to $25 million to $2.5 million
6% 10%

24 ELECTRICAL CONTRACTOR JUL.04 www.ecmag.com

 firms worked in eight of the 17 categories The old standbys
WHAT DO YOU DO?
and very large, large and mid-size contrac- While emerging—and merging—technologies

T
H E S E D A Y S , contractors are
involved in more types of projects,
especially with the growth of high-
tech and security and life/safety systems.
Our survey listed 17 project types and asked
contractors which they performed in 2003
(See Figure 6). On average, 50 percent of
tors were more apt than small ones to work
in multiple categories. In fact, 84 percent
of very large firms worked in eight or more
categories, compared with 40 percent of
small contractors. In all, more than 90 per-
cent of the firms surveyed worked in four or
more of the categories.
will be a huge part of the industry’s future,
contractors know power distribution and
lighting, which we subdivided into controls,
fixtures, ballasts and lamps, is today’s bread
and butter. These five “traditional” categories
top their lists, and are performed by between
81 and 90 percent of firms surveyed while

Contractor age, employee diversity remain a problem

The average contractor age continues to be a cause for
concern. For example, the 2004 survey shows:
® Most of you are middle-aged (48.6 years old on average)
® You have spent an average of 24.6 years in the industry,
most of your working life
® Only 8 percent were 25 to 34 years old, almost exactly the
number (7 percent) of respondents 65 and older
® These figures hew closely to those of the 2002 report, which
also noted that contractors under 35 were notably absent.
An inclusive work force
Other factors may significantly affect the industry. The Aspen
Institute, as reported in The New York Times, says enormous
demographic changes are afoot for the next two decades.
With declining birth rates, a leveling off of women entering the
work force and baby-boomer retirements at hand, the Institute
predicts:
® The labor force may grow as little as 16 percent
® The percentage of native-born workers ages 25 to 54 won’t
grow at all
® Workers with any college education might increase by only
4 percent.
Contractors already know how difficult it is to find educated and
qualified workers, and these projected changes could have a big
impact on the available labor pool and productivity. Atul Dighe, a
futurist with Social Technologies LLC and recent NECA convention
speaker, thinks “inclusion,” looking at everyone as a possible
employee, is vital. Hispanic and Asian workers are quickly
becoming a large and influential part of the labor pool—old
news to folks in California and the Southwest, but something
novel in other parts of the country—and President Bush’s new
immigration policies would allow 8 million undocumented
immigrants to obtain renewable, three-year visas.
In an e-mail, Dighe wrote that young people today are the most
ethnically diverse in our history and if “any industry wants to attract
talent in the future, they will have to figure out how to make their
industry reflective of this more diverse population mix.”
“Today’s youth,” he wrote, “will seek employment situations that
have a diverse work force. Quite simply, today’s youth will seek
employment situations that have a diverse set of people in it.
“As your research indicates, many of the current contractors are
entering their 50s and 60s and, unlike in the past when the next
generation was ready to take the baton of ownership/leadership,
many contractors are finding that the next generation is not
interested,” Dighe added. “‘Inclusivity’ here could mean thinking
about passing the business on to someone outside of the family.
Contractors need to think carefully about identifying who’s next in
the leadership pipeline and working with those people to develop
their skills and abilities. Looking outside the family to longtime
associates, key supervisors, and even in the current labor pool may
be a potential solution.”

FIGURE A. Respondent Age AGE

■ 18–24
50%
■ 25–34
45%
■ 35–44
40%
■ 45–54
35%
■ 55–64
30%
■ 65+
25%
20%
15%
10%
5%
0%
Total 1–9 10–19 20–99 100+
Company Size

www.ecmag.com JUL.04 ELECTRICAL CONTRACTOR 25

2004 CONTRACTOR PROFILE

FIGURE 4. Respondent Education

Total

1–9

10–19

20–99

100+

0% 5% 10% 15% 20% 25% 30% 35%

■ Attended HS ■ HS Grad ■ Apprentice, Trade, Vocational ■ Attended College ■ AA Degree ■ BA Degree ■ MA Degree +

alternative-energy projects such as fuel cells
at 3 percent and wind generation at 4 per-
cent barely registered. We also discovered,
regardless of company size, just about every-
one worked in the four lighting categories.
Rounding out the Top 10:
® datacomm systems at 62 percent
® backup power at 61 percent
® fire/life safety systems at 46 percent
® CCTV or access/motion security systems
at 38 percent
® energy management/power quality at 34
percent.
Future work
We also wanted to know what type of work
contractors expect to do, and which cat-
egories they think will change in volume
over the next few years, regardless of
what they do now. In general, contractors
expect to increase or stay the same across
all categories. Few expect a decrease in
any category.
If a contractor doesn’t work in a cer-
tain category, we found they’re unlikely to
express an opinion about a future there. So
we focused first on firms participating in a
given area, then looked at those who hadn’t
done that same type of work in 2003.
Among those who worked in a particular
category, large and very large firms usually
predict increases in all categories, except
ballast and lamps, where we find no dif-
ferences by company size, and home auto-
mation/theater/security, where small firms
expect greater future volume compared to
mid-size, large and very large firms.
On average, small firms that don’t work
in backup power, datacomm and fiber optics
pick those as growth areas more frequently
compared to all others firms not working in
these areas. In contrast, 16 percent of very
large firms predicted growth in fuel cells and
17 percent predicted an increase in wind gen-
eration projects compared with all other firms.
Overall, alternative-energy projects, including
solar at 10 percent, wireless networks (11 per-
cent), home automation/theater/security and
energy management (both at 9 percent) were
anticipated to be high-growth areas for firms yet
to tap into those sectors.
On the leading edge
We also compiled a list of seven “leading-
edge” projects ranging from configuring a
CISCO router (7 percent of firms) to com-
munications/data systems moves, adds and
changes at 34 percent, a type of work done
frequently by contractors of all sizes; however,
these percentages are even higher for large
and very large firms. Overall, 51 percent said
their firm performed this kind of work in 2003
compared to 37 percent two years ago.

FIGURE 5. Volume will increase among those working and not already working in category
Power (60-HZ)
Lighting Controls
Lighting Fixtures
Ballasts
Lamps
■ Currently working in category
Backup Power
■ Currently not working in category
Energy Management/Power Quality
Biometrics (CII)
Fire/Life Safety Systems (CII)
Security Systems (CCTV/Access/Motion) (CII)
Home Automation/Security/Theaters (Res)
Communications/Data Systems
Fiber Optics (Datacomm and Lighting)
Wireless Networks
Fuel Cells
Solar/Photovoltaics
Wind Generation

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

26 ELECTRICAL CONTRACTOR JUL.04 www.ecmag.com

2004 CONTRACTOR PROFILE

Regardless of whether their firm per-
formed this type of leading-edge work in
2003, respondents were asked to predict
their future volume in each area over the
next few years. Almost all expect to “stay
the same,” few predict a decrease, and
firms not working in a given area usually
didn’t guess about a future there. However,
we discovered mid-size and large firms are
most likely to predict increases in all cat-
egories. For those not yet performing work
in these areas, 3 percent of very large firms
predicted a rise in low-voltage systems-inte-
grator work, and 10 percent predicted a rise
in datacomm work for a CLEC.
The “whys” for all of these predictions
are hard to discern, but surely, some con-
tractors for any number of reasons—security
in what’s known, how local markets shape
up, etc.—stick with their bread and butter
and probably will say the same when we
conduct our next survey. We’re sure they
do what they do well, have a good business
reputation and a streamlined operation
that keeps the contracts coming, and see
no need to expand their business into more
arcane or risky projects.
That’s not to say fruitful opportunities don’t
exist for the more adventurous contractor or
one whose market is rife with low-voltage or
alternative-energy work. As our survey shows,
those jobs and the number of contractors
performing them may rise in the future.

A simple formula for success: E=PC2

As we said, 84 percent of very large firms worked in
eight or more categories compared with 40 percent of
small contractors. In all, more than 90 percent of the firms
surveyed worked in four or more of the categories.
This points to an ever-developing “integration” trend, one
that’s seen strong growth for the last decade and has affected
commercial/industrial/institutional projects and single-family
residential contractors alike. Dr. Tom Glavinich, a regular
contributor to ELECTRICAL CONTRACTOR, has devised the formula
E=PC2 to explain this simply. That translates into E for markets,
P for traditional power projects, and C stands for control and
communications work. The contractor that puts P and C together
will have plenty of Gs. And that stands for greenbacks.
such as state-of-the-art home theater and sophisticated
sound systems.
Figure B shows 95 percent of our respondents did some type
of traditional power or lighting project and 65 percent did
a power-quality project, which includes backup power and
energy management. We also found some interesting figures
on what we call “core integration projects”:
® almost two-thirds of our contractors did some type of
automation/control systems project for commercial/industrial/
institutional (CII) or residential markets
® 55 percent of respondents did a CII automation/controls
system project
® almost one-third did a residential automation/security/

The ability of a contractor to group traditional power theater project

installations with various combinations of security, lighting
controls, fire alarm systems, automated building systems,
datacomm and even biometrics is a powerful sales tool,
providing a one-stop shop where an owner can get 120V
power, Category 5 cabling, HVAC that’s computer-controlled
for optimum efficiency, an energy-saving lighting system that
dims at peak sunlight and “spotlights” an after-hours intruder
with the help of the integrated security system, and amenities
® 66 percent did a communications low-voltage project
® and 10 percent of all contractors did a alternative
energy project with 20 percent of very large firms involved in
this sector.
Home-theater work is an especially lucrative niche market, and
many, if not most, new homes are being wired for more than
120V power these days. Residential contractors who can’t do
more complex wiring tasks could be left in the dust.

FIGURE B. Contractors work in many areas in addition to traditional power

Any Traditional Power/Lights

Any Power Quality

Any CII or Res Automation/Controls

Any CII Automation/Controls Systems

Residential: Home Automation/Security

Any Communication/Low Voltage

Any Alternative Energy

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
■ Total ■ 1–9 employees ▲ 10–19 employees ★ 20–99 employees ● 100+ employees

28 ELECTRICAL CONTRACTOR JUL.04 www.ecmag.com

2004 CONTRACTOR PROFILE

FIGURE 6. Currently Work in Category

Power (60-HZ)
Lighting Controls
Lighting Fixtures
Ballasts
Lamps
Backup Power
Energy Management/Power Quality
Biometrics (CII)
Fire/Life Safety Systems (CII)
Security Systems (CCTV/Access/Motion) (CII)
Home Automation/Security/Theaters (Res)
Communications/Data Systems
Fiber Optics (Datacomm and Lighting)
Wireless Networks
Fuel Cells
Solar/Photovoltaics
Wind Generation

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

WHERE YOU DO for small firms, while the percentages for video will make a strong comeback and
YOUR WORK
■ MA Degree + ■ BA Degree ■ AAnew
Degree ■ Attended
construction College
rises ■ Apprentice,
as firms grow largerTrade,renovation
Vocational will
■ HSbeGrad ■ Attended
the wave of the future.

O
U R C O N T R A C T O R S report
they get 41 percent of revenue
from new construction, 31 percent
from modernization/retrofit and 28 percent
from maintenance/service/repair. However,
maintenance is a high-revenue generator
(See Figure 7). In what could be seen a
disturbing trend, the portion of new con-
struction has dipped 9 percent from our
2000 survey when we proclaimed it “was a
good year to be an electrical contractor.”
It’s still good. Many think voice/data/
When baby boomers latch on to their
parents’ inheritance—a sum estimated
in the low trillions—some experts think a
good chunk of that will be spent on real
estate, especially if empty nesters leave the
suburbs for the cities to take advantage of

FIGURE 7. Types of work by sector

60%

50%

40%
30%

20%
10%
0%
Total 1–9 employees 10–19 employees 20–99 employees 100+ employees
■ New construction ■ Modernization/retrofit ■ Maintenance/Service/Repair

FIGURE 8. Types of electrical projects by firm size

80%
70%
60%
50%
40%
30%
20%
10%
0%
Total 1–9 employees 10–19 employees 20–99 employees 100+ employees
■ Electrical power/distribution ■ Communications/data systems ■ Security/Life Safety Systems ■ Total building automation ■ Sound and video

30 ELECTRICAL CONTRACTOR JUL.04 www.ecmag.com

2004 CONTRACTOR PROFILE

their culture, nightlife and restaurants. If at 71 percent and mid-size firms at 62 HOW YOU DO YOUR
this prognostication proves true, renovation percent (See Figure 8). WORK

work should turn up aplenty.
In general, our 2004 survey showed:
® regardless of company size, electri-
cal/power distribution is by far the largest
revenue source, accounting for an average
of 69 percent of sales
® total building automation registered at 11
percent and accounts for more revenue of
mid-size firms than firms of any other size
® communications/data systems (low volt-
age) at 10 percent, is less important to
small firms
® similarly, security and life safety work, only
6 percent of total sales, grows in importance
as the company size grows; it accounts for 4
percent of small-firm revenue and 9 percent
of very large-firm sales
® sound and video accounts for 4 percent
of revenue on average with no significant
difference by company size.
But there are no huge gaps anywhere;
the biggest difference is only 9 percent in
power distribution sales, with small firms
Residential vs. commercial
Across the total sample, contractors get 34
percent of their work from single-family resi-
dential, 8 percent from residential multifam-
ily, and 52 percent for business from com-
mercial, industrial, institutional and public
places (CII). Airports, highways, power lines
and other “nonbuilding” projects account for
a mere 4 percent of the business.
The biggest difference in work performed
comes when comparing company size. Small
firms report 46 percent of their work comes
from single-family residential, while very
large firms say it’s a miniscule 5 percent of
their business. CII projects, however, account
for 79 percent of the work for very large firms
and 41 percent for small firms. Very large
firms also do four times as much “nonbuild-
ing” work as small firms. No big shock here.
Big firms take on big nonbuilding projects
and residential construction has always been
a mainstay of small firms.
C
O N T R A C T O R S S AY 46 per-
cent of their revenue comes from
design/build, which allows con-
tractors total or near-total control of their
job. It’s particularly important to small
firms, which claim it makes up 53 per-
cent of their work. (Mid-size, large and very
large firms all claim it’s 35 percent.) We
designated three more categories related to
engineering and design:
® work in which the contractor made sub-
stantive changes to specs and drawings
® work in which slight changes were
made
® work in which someone else’s specs and
drawings were followed.
Contractors said they made substantive
changes in 13 percent of their jobs, and
also made slight changes in 13 percent of
their work, but in a hefty 28 percent of their
work, they followed specs and drawings to
the letter.
An even closer look shows small firms

FIGURE 9. Building categories

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Total 1–9 employees 10–19 employees 20–99 employees 100+ employees
■ Residential (single family) ■ Residential (multifamily) ■ Commercial/industrial/institutional ■ Non-building (e.g., airports/highways/power lines)

FIGURE 10. Extent of contractor’s changes to specs and drawings

60%
50%

40%
30%

20%
10%

0%
Total 1–9 employees 10–19 employees 20–99 employees 100+ employees
■ Design/build ■ Made substantive changes ■ Made slight changes ■ Followed other’s specs and drawings

32 ELECTRICAL CONTRACTOR JUL.04 www.ecmag.com

2004 CONTRACTOR PROFILE

use design/build on 53 percent of their proj-
ects; couple that percentage with the small
firms’ propensity to do single-family resi-
dential (remember, it took up 46 percent of
their work) and it’s a good guess deign/build
is being used in a lot of home construction.
Small firms say they followed specifications
faithfully only 23 percent of the time, a
percentage that’s at least 12 percent lower
than that of the bigger firms.
Also, mid-size, large and very large firms
score much higher percentages than small
firms when asked if they followed specs and
drawings faithfully. Another “why?” An edu-
cated guess is that public-sector projects,
normally off-limits to design-build, are done
less often by small firms.
How contractors purchase
Respondents were given four specifications
options for installation and asked how their
company had to fulfill obligations on the
job. We found:
® a single brand is specified 21 percent
of the time
® multiple brands are used at 28 percent
® “or equal to” products can be used at a
37 percent rate
® performance-specified brands are
required 15 percent of the time.
Note that a single-brand specification is
a requirement for small firms 25 percent
of the time, a rate that falls incrementally
as companies get larger, dropping to 13
percent for very large firms.
It’s no revelation that distributors get the
lion’s share—74 percent—of the market,
with warehouse home centers lagging far
behind at 14 percent. As companies get
bigger, home centers play a smaller role:
very large firms buy only 5 percent of their
supplies from that source.
Almost all contractors surveyed buy from
multiple sources, the number of which
climbs with firm size. For example, 11
percent of small firms and 32 percent of
very large firms buy from all four sources;
however, a majority of small firms—54 per-
cent—say they buy from just two sources,
perhaps because larger companies are both
located in more places and involved in more
different types of work. Online purchasing
is still a small factor—just 6 percent of
all firms buy over the Internet—but very
large firms do 9 percent of their purchasing
online.
Computer use
Computer use is no longer the way it will be
done; it’s the way it is done. Forty percent of
large and 74 percent of very large firms use
computers in eight ways or more compared
to 15 percent of small firms and 10 percent
of mid-size firms. This pattern—more use
by small than mid-size—suggests a concen-
tration of small firms that specialize and
need the tools to compete in selected areas.
The fact that almost all very large firms said
they used computers for four or more tasks
hints at the opposite, that they are involved
in many different sectors.
As noted earlier, Internet access/e-mail
is used almost universally—in fact, all large
and very large firms say they use it. Also:
® 97 percent of large and very large com-
panies use computerized accounting
® a whopping 94 percent of very large
firms use computers for estimating and
job-cost analysis
® and 88 percent say they run AutoCAD.
This part of the survey yields some puzzling
and interesting data. There are some unex-
pected results in computer-program use that
on the surface don’t seem to be cost-effective
for small firms. For example, 34 percent of
small firms—that’s just one to nine employ-
ees, remember—say they have computerized
equipment and tool inventory, and 9 percent
say they use computers for fleet management.
Now that could be something as simple as a
customized Excel spreadsheet or it could be
specialized software. In any case, contractors
have put their computers to good use.
This data is probably skewed toward nor-
mal office use of computers, but PDAs and
laptops have been common tools in the field
for some time. Reported use for field laptops
is 42 percent and 33 percent for PDAs, and
we found 23 percent of firms order material
with handheld devices. In the future, large
and very large firms expect increased com-
puter use from these already high levels.

You as key specifier in supply procurement

Our 2004 survey found con-
tractors choose the brand
72 percent of the time. Small
firms choose more often (74
percent) than very large firms
at 65 percent. In the latter
case, we hypothesize the
projects may be far larger and
more complex, and purchas-
ing may be controlled by the
general contractor—or that
small firms are involved more
in single-family residential
design-build and have more
purchasing control.
Guesswork aside, we think the
electric contractor’s capacity
to make product choices is
terribly important—in terms
of costs savings and getting
the job done on time with a
minimum of change orders.
When it comes to purchasing
electrical material and sup-
plies, they know what’s best.
Unless there are overriding
reasons, why should someone
else choose for them?
In his report to the Electri’21
Council, “Procurement
Chain Management in the
Construction Industry,” Perry
Daneshgari, a consultant and
contributor to this magazine,
said general contractors con-
tend it saves money, provides
faster occupancy and wider
product selection when they
control procurement. Danesh-
gari disagrees somewhat.
While his study admits the
general contractor procurement
method (GCPM) adds value
through bulk purchases and
by cutting out the distributor
or subcontractor (and their
markup), and allows procure-
ment earlier in the project, this
method may cause lost time
later in the job due to lack of
expertise. Daneshgari says the
specialty contractor procure-
ment method (SCPM) provides
the owner value through service
and knowledge. These are some
of his crucial points when it
comes to SCPM vs. GCPM:
® A subcontractor’s product
knowledge and installation
skill is vital to most owners

34 ELECTRICAL CONTRACTOR JUL.04 www.ecmag.com

 FIGURE 11. Specification options
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Total 1–9 employees 10–19 employees 20–99 employees 100+ employees
■ Single brand ■ Multiple brand ■ “Or equal to” ■ Performance specified

Tools and vehicle use hand tools at 89 percent, multimeters at 79

Of course, almost every one of you owns a
company vehicle and you’d much rather buy
one than lease, though the latter option is
more prevalent as firms grow in size. The
same goes for tools. You’d rather own than
lease. We asked about the tools purchased
most frequently in 2003 and found 90 per-
cent of firms bought power tools followed by
CONCLUSION
percent of firms and mobile phones/two-way
radios at 57 percent. Lifts and scaffolding
(23 percent) and digging and boring equip-
ment (16 percent) were at the bottom. It’s
no shock that these two types of heavy,
construction-site equipment were the most-
leased tools in our survey, the only ones to
have a lease rate higher than 10 percent.
in new construction. An infusion of minorities
in the workplace could cure the stagnation
METHODOLOGY/ABOUT THE SURVEY
The survey was conducted by postal mail
and via the Internet between April 8 and
May 10, 2004, among a random sample of
ELECTRICAL CONTRACTOR subscribers.
During that period of time, a total of 865
usable surveys were completed, 505 via
the Internet and 360 via postal mail. There
were no follow-up mailings. An incentive
was offered for participation in the survey:
For each completed survey, ELECTRICAL
CONTRACTOR magazine would contribute $5

W
HAT LIES AHEAD? It’s a pretty good
bet—in fact, bet the house—com-
puter use, especially with sophisti-
cated construction software, will grow. The
rumored death of VDV—to borrow from Mark
Twain—has been greatly exaggerated. As we
said, look for more contractors to integrate
low-voltage with traditional power and light-
ing. And we think three key areas will affect
contractors in years to come: contractor age,
procurement control and a possible decline
in average contractor age, and we’re sure
you’ll seize greater control in procurement
and adapt to a possible retrofit/renovation
upswing. All of these somewhat cloudy issues
may have a bright, shiny copper lining. We
say 2004—and beyond—will be very good
years to be an electrical contractor.
FULMER, a Baltimore, Md.-based
freelance writer, can be reached at
johnsfulmer@netzero.net.
to charity.
The margin of error on the total sample of
865 respondents is +/- 2.8 percent at the 90
percent level of confidence.
Tables and figures contained in this article
come from the data generated by this
year’s Electrical Contractor Survey, which
EC was conducted by New York, N.Y-based
Renaissance Research & Consulting Inc.
an independent marketing research firm
that specializes in construction. They can be
reached at smetzger@renaiss.com.

in managing, validating and
optimizing equipment speci-
fied in the design; general
contractors lack the electrical
knowledge to pass on impor-
tant new product information
® Distributors provide a
valuable role for manufactur-
ers; with no distributor, man-
ufacturers need to increase
customer sales and support
roles thus adding cost; dis-
tributors offer services that
can dramatically reduce the
specialty contractor’s labor
cost
® Owner may experience
project delays or additional
cost from material delays or
material handling; electrical
contractors know importance
of fast job-site delivery and
available inventory
® GCPM assumes general
contractors can bypass dis-
tributors and contractors and
buy manufacturer-direct; but
many manufacturers require
all customers to go through
distribution, thus limiting
product selection
® General contractors order
material and have it shipped
from the manufacturer to
the job site where it’s stored
until it is installed; in SCPM,
distributors and specialty
contractors schedule mate-
rial flow to the job site. It is
delivered as needed and can
be packaged according to the
area where it will be installed
We feel you should be the key
specifier for electrical products
and supplies. You know what
works best in a given applica-
tion, and you have developed
relationships with distributors
that ultimately work to the
owner’s advantage. Job-site
roles have become more
flexible in the past decade,
leading some general contrac-
tors to believe they should
make all purchasing decisions.
But this same flexibility can
allow you to take the reins
of a project, especially if the
traditional general contractor
has become nothing more
than a dealmaker who puts
projects together on paper. This
flexibility also relates to the
ascendancy of design-build
where, from the very beginning,
you work with a team to map
out design and procurement.

www.ecmag.com JUL.04 ELECTRICAL CONTRACTOR 35