Case study: One company expands its business within the pipeline industry
A sudden series of environmental infrastructure failures in Southern California provide an opening for a local contractor with insight to seize an opportunity.
By Suzan Marie Chin
Year 2000 headlines in the San Diego newspapers got Craig Post of Affordable Drain Services to thinking about potential opportunities available to expand his business into another area of the pipeline industry.
During March and April of 2000, the San Diego area experienced a number of sewerage spills, one of which forced a quarantine of the Mission Bay, a major tourist attraction. Approximately 2 years prior to that occurrence, the City of San Diego took action and set policies to deal with sewer leakages that were taking place in some of the canyon areas. All the City's sanitary sewer systems problems were getting a tremendous amount of media coverage. Environmental groups were filing suit against the City for failure to build sewerage and stormwater systems that were adequate to handle the needs of San Diego's population. According to the San Diego Tribune in an article published on March 31, 2001, from 1995 through 1999 the City had 1,819 raw sewerage spills, 316 of the overflows contaminated public waterways. With this, the City took action and put a proactive plan in place to correct and control the systems infrastructure failures that would include inspection, rehabilitation and replacement of pipes.
Another person was also watching the headlines closely and decided to approach Post with a business proposal. Duane Johnson, an operations manager with a local pipeline inspection firm began a series of discussions with Post about joining forces and expanding Affordable's business into the inspection side of the industry. Unlike most drain cleaning service companies that utilize their cleaning service as a platform for plumbing projects, Affordable performs only drain cleaning related services for many plumbing companies throughout the San Diego area and stays focused in that one area of the industry.
After approximately three months of discussions and monitoring what was happening in the San Diego area, Affordable decided to jump in and brought Johnson on board to run a new division for the company, Affordable Pipeline Services.
"Teaming" up with Johnson was more than bringing on just another talented and knowledgeable staff member. Johnson brought with him experience, but more importantly, contacts and a portable book of business. Before their first inspection vehicle was ready, they had contracts in place to hit the ground running in their new venture. With Johnson, he had "bought" a thriving business.
The largest contract was with Hirsch & Company, a San Diego based consulting engineering firm that was hired by the City of San Diego to provide inspection and assessment of the sanitary sewer system. Word quickly spread about the quality of Affordable's work and the company rapidly added many more projects and satisfied clients to its customer base. The timing couldn't have been better, since there were very few contractors available locally to do the work in the San Diego area, the region offered an abundance of opportunities for Affordable to grow quickly. And quickly they did—within 7 months of startup, they found it necessary to purchase a second inspection vehicle.
Johnson knew what it would take to get the business up and running successfully and demonstrated a number of equipment vendors. It was narrowed to a short list and the vendors were asked for quotes. Post was sold on one brand initially because of the price point. However, after a series of 2nd interviews and additional field demos that pitted the equipment against some of the typical tough environments that Affordable would be encountering frequently, they ultimately decided that a Pearpoint system would best suit their needs. The goals of the company were to be the leaders in the industry—encompassing the best equipment, crew and technology available. "There are a lot of companies out there doing TV work using older equipment and not staying upfront with the technology," Johnson related, "we felt if we were going to step into this and move quickly and gain respect as fast as possible, we needed to be using the best equipment available on the market."
The right equipment for the job has backed up Affordable's commitment to excellence and has proved to be a valuable selling tool. "Many times we have pulled up to a job site and contractors are impressed with our equipment and what we have to offer in comparison to what they have been seeing over the last 10 years coming from other inspection companies." In fact the company has so much pride and belief in their inspection equipment, they even advertise it on their company shirts.
Another deciding factor for their selection of Pearpoint for both their vehicles is Affordable's commitment to worker safety and compliance. "We knew that the bulk of our work would be for municipalities and they demand that all contractors and their equipment be in complete compliance with all state and federal laws, especially workplace safety regulations," Johnson explained, "having this equipment has given us a distinct advantage when bidding on contracts like Hirsch for the San Diego project."
The Hirsch contract requires Affordable to perform inspections on existing pipelines in the City of San Diego, then provide the data to Hirsch. The majority of the system is about 40-50 years old and has approximately 2,500 miles of sewer mains and approximately 2,000 miles of trunk. Most of the pipes are 6" to 15" in diameter. The contract has extremely tight production deadlines and presents many challenges to even the most experienced contractor. "The San Diego sewer system is demanding and requires ingenious thinking and versatility on the part of the CCTV inspection crews," Mark Hill, Project Manager for Hirsch and Company explained, "field conditions change constantly, some of the pipes have been in the ground over 100 years. Some are in great shape and some present huge problems that most operators would give up on—that's not an option here and that's when great equipment and resourcefulness are vital, you have to go loaded for bear."
The City of San Diego CCTV inspection surveys are conducted without the lines being cleaned first. This allows the survey crew to not only perform structural analysis but also document maintenance issues and preventative measures that need to be addressed for each section of pipe. If a pipe is cleaned prior to inspection, items like grease and roots will be eliminated and the survey will not present a total picture of the system. By having the inspection crews perform the work this way, the City is a creating a detailed database of not just structural problems but also maintenance issues. "Unclean lines present their own set of challenges and obstacles for the inspection equipment and that's where the power of our Pearpoint tractor becomes invaluable," Johnson related. Affordable has found that with their P420 tractor they are able to complete the inspections without some cleaning or other deployment technique about 94% of the time.
After the inspection is completed and data turned in, Hirsch assesses the information and presents the City with recommendations for rehab, replacements, etc. This information is then incorporated in the City designs, group jobs for the work are put out to bid and afterwards, Affordable will be often be called in by the rehabilitation contractors to re-inspect to insure compliance to specifications. The task of inspecting all of the City of San Diego's lines is enormous. The City itself will soon upgrade it's own inspection fleet with 4 new Pearpoint custom-built inspection vehicles. Even with this addition, the City will still need the help of outside contractors like Affordable.
Innovative solutions for rapid growth
The steady business growth has provided Affordable a unique opportunity to co-op with other contractors who own Pearpoint equipment. Some of its other current projects are demanding, and running multiple crews and vehicles sometimes isn't enough to keep up. Instead of viewing other inspection companies as just the competition, Post and his team look for opportunities where they can bid jobs together that alone, neither company would be considered because of being "too small." On the Hirsch contract, one of the reasons Affordable was able to obtain and renew its contract was its teaming up with Innerline Engineering (Hemet, California). Together they have a fleet of 5 vehicles and multiple crews and can handle large municipal projects with ease. On average, each truck can survey approximately 3,000 ft. per day. Innerline has been performing one of the more difficult portions of the Hirsch contract. In addition to the accessible street sewer and trunk lines, many of the areas that must be inspected are in the remote and inaccessible by vehicle canyon areas, many of which have never been inspected. The crew must hand-carry in the cameras, tractors, portable generators, controllers, cable reels and accessories to complete the remote inspections. Another example of how the San Diego system puts the inspection crews' ability to be innovative and resourceful to the test.
"The crew is vital to our success," Johnson stated, "You can have the best equipment and great contracts but you have to have great operators to back it up." Affordable puts all their operators through an intensive training program before they can be on "billable status" vs. a traditional train as you go method. The program includes 3 full months hands-on as an assistant followed by 3 more weeks under careful supervision before taking on the responsibilities of a full-fledged field operator.
In keeping with their commitment to always stay on the cutting-edge, Affordable recently added DVS (Digital Video Survey) to compliment its existing flexidata™ pipe survey reporting software program. DVS will give Affordable the ability to record an entire survey as an MPEG file while the operator is entering the observations seen in the pipe. It can then be written to a CD with digital links to the survey. Hirsch and the City of San Diego had wanted all of their new survey data in digital format so the new DVS module will provide a highly efficient and compact data storage solution.
Marketing for success
Affordable marketing approach and rapid success have been based upon word-of-mouth marketing backed by excellent equipment, service and strategic niche marketing. The company obtains lists of engineering firms, cities etc. who are bidding projects and then a follow up program of calls and meetings with the contract's project manager is completed. "Instead of doing mass marketing, we are isolating those companies that are known to be using TV services," Johnson explained. They have had great success with this method and have found that once a client tries them once, they continue to utilize Affordable.
The market is expanding and Affordable is ready to take on the challenge. Johnson stated, "The work that is going to be coming for CCTV inspection is unlimited not just here in our region but across the country. The only way to properly identify problems within the sewers is through video technology." Affordable knows that contractors just like they now have a unique window of opportunity to grow if they look forward and seize the day.
For information:
Affordable Pipeline Inspection Services - Duane Johnson, 858-689-4000
Hirsch & Company - Mark A. Hill, 619-563-4545,
CCTV inspection equipment utilized - Pearpoint, 760-343-7350
Source: Pearpoint
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