How Atlantic Canada's Largest GC Bids $250M Projects: MARCO Group President Allan MacIntosh on P3s, Risk, and Building a Team

0:03All right, welcome back to the Atlantic Construction Podcast. Today our guest is Allan MacIntosh, President of MARCO Group. Thanks for being here, Al. Yeah, thank you for having me. How are you? I'm fantastic, sun is shining out there, nice view, and summer's finally here. Yeah, it's a Friday. Allan is President of MARCO, been with the company for 18 years. Yeah, I started — I started MARCO off the island in Newfoundland in 2003, so it's been about 18, 19 years. Yeah, right. And you

0:37started your career as an estimator? Yeah, when I graduated college I sort of took a liking to estimating, and then went on to get my professional quantity surveying diploma, and he sort of was a career estimator for a while, and then wanted to do something different, so jumped through a few different companies to kind of work my way up to, you know, division manager, and then eventually knew I wanted to own a construction company, and found a great partner in Christopher

1:06Hickman. He was looking to grow MARCO off of Newfoundland, so it was a great fit. Right. And where did you go to college? Went to Algonquin College. Oh, okay. I did Architectural Technology. Are you local? Are you from the — I grew up in Cape Breton. Glacier Bay. Yes, awesome. Yeah. So maybe we can talk about a little bit of the background of MARCO and how they

1:30sort of evolved, and your founder Tom Hickman — just kind of a little bit of the backstory. Yeah, no, it's a great story. And for those that got to meet Tom, he was bigger than life and a great influence in Newfoundland construction and certainly an influence in my life for the time that I've known him. Sort of even back up a little bit further than that — a lot of people ask us, you know, where the name MARCO came from. Yeah, we were talking about that

1:59before we came in. So Tom's wife is named Margaret, and so he decided to start a construction company and named it after his wife. So I say we all work for Marg in MARCO, which is kind of cool. So Tom started the business, and about 2001 he turned the reins over to his son Christopher. Christopher had some visions of growing the business larger than his dad had done. I think they were doing about

2:3228 million dollars annual volume, probably back in 2001, 2002. And I joined them in 2003. Kind of a unique story — I had a few other options, I was working for a construction company at the time, and Chris had gone over to meet me. So I went over and met them, and we sort of toured around a little bit, went for dinner that night, and he brought his accountant in and said, okay, we're going to put a deal together,

3:04blah blah blah, and he would introduce me to all his staff. "Here's our new guy in Halifax." And I said to Chris in a private closed-door meeting, I said, "Man, we don't have a deal yet — I just showed up to kick the tires, right?" And he goes, "Well, boy, you're here now, we're going to close this." And we did. I left Newfoundland the next morning. I think we finalized the deal in the car on the way to the airport. But you know, that's just

3:29the kind of way his dad was, and Chris was — he saw an opportunity, or saw somebody, and he jumped on it and said, "Let's go." He said, "Let's grow this thing off the island." So I said, well, I can, you know, I can work out of my basement, I can give a very small shingle and we can start. And he said, "I'll screw that." So we start looking at an office. I think I was looking at 1,500

3:51square feet. He was looking at 6,000 square feet. He said, "We're going to grow, we're going to be big." And that's kind of the vision that we've had since then, and it's been a fun ride for sure. It's come a long way. Yeah, we have come a long way. We've multiplied our annual volume by ten. Back then it was $25 million, we're now

4:13building on an annual basis over $250 million, and we've got about a half a billion dollars in backlog work right now that we've yet to get to. So revenue-wise, yeah, you guys are the biggest GC in Atlantic Canada. Yeah, I would say revenue-wise, and certainly the projects that we take on. And we are in a unique position in Atlantic Canada — if projects get up to a certain size, let's say 50, 75, 150, 250 million dollars, we are, I would say, the only

4:46GC in Atlantic Canada that is consistently bidding those jobs. The national firms that are coming in — they're here. So we like that position. We also think that because we're local, and we understand the market and we understand the clients, we can also be a bit more nimble than maybe the more structured national firms. We can be a little more creative on contractual terms and things like that with an

5:16owner and what have you. And even with subcontractors, we can be a little bit more favorable when people need to get paid a little early and stuff like that. There's not — look, they can pick the phone up and call me and say, "Look, I need to make payroll this week, I need a check, help me out." We've done that more times than I can remember. No question, just to keep relationships and what have you. And sometimes you sit

5:38back and say, well, that's a silly idea — why would you do this, or why would you put yourself at risk? A company came to me and said, "Look, I'm down on my luck, I need — I can't make payroll, I need this." He'd been a long-time subcontractor, and we took a chance and we paid him a hundred thousand dollars of stuff that I never knew if we were going to get back. But I knew if we did get it back, we would

5:57— he would reap benefits from that relationship over years. And true to his word, he paid us — he got the work done, finished the contract and what have you. So I think, you know, we can adapt and we can do things like that in Atlantic Canada, which I think makes us Atlantic Canadians. And it's nice to be able to have a reputation for being able to do that. Yeah, 100%. So when you guys are bidding major projects, is it typically only the

6:22national firms you're bidding against, or one or two locals as well? Or does it just kind of depend on the scenario? Depends on the year. Yeah, I mean, certainly if we're bidding anything over $100 million, it's normally just us and the four major national firms that are here in Atlantic Canada — EllisDon, PCL, Bird, and ourselves, normally. It gets below that, you might see a few other local guys jump up and bid one or two

6:49in there, but predominantly it's the five of us that are going after it. What's the selection process look like for you guys in your office when you look ahead for the years to come, or the current year? There's got to be a lot of different parts where you're deciding, we should stay away from that one, we're bidding all these major ones. Well, we just kind of bid everything. I've always said Atlantic Canada in business is a lot like our weather —

7:15it never gets too cold, it never gets too hot, right? So we never have these booms. I remember back in the day I was working for a national firm out of Halifax, and they had gone through six presidents and had no direction. The president came down and basically said, "We're going to be a dam builder, we're going to be a white pavement contractor, we're going to be airports." I'm like, okay, we've got one major airport,

7:38we have no dams, and we don't do white pavement — so are we closing? But that was the vision from the States. So I think in Atlantic Canada we are able to adapt to whatever the market is bringing to us. When you say what your vision is — well, my vision this year might have been different than my vision last year, or my vision five years ago. So when box stores were vogue, we were a box store builder. When recreation centers

8:06were vogue, out of the '08 recession, when that hit, there was infrastructure money — we became recreation centre builders. Then we became school builders, which obviously we still are today. Then we got into long-term care homes and multi-res. We're doing a heck of a lot of multi-res right now, and P3s are in vogue right now. They will wax and wane, and now we're a P3 builder. In five years we'll be in some other market, but we will be able to adapt to that market, whatever comes at us.

8:37You mentioned P3s — public-private partnerships and procurement — that's something you launched into a few years ago. We did. You know, I think we've got a unique niche market in Newfoundland where we're sort of a sought-out partner. We have an opportunity there to be a bit more competitive — maybe the national guys aren't there on a regular basis. So when we see a large project in Newfoundland pop up, we certainly want to put all our resources in. Was the MUN Core Science Facility a P3? No, that was a design-bid-build, so

9:11that was a hard dollar bid. Yeah, that was a hard dollar bid. That was $243 million. The day we bid it, we were a million six low. We were talking about that before we came on the air. We say we worked on it for about three and a half months — a lot of long hours, long days, a big team putting it together. And you know, the day you win it, you get this euphoria of having won, and we thought, geez, we're going to go

9:32out and have a big party and we're going to be so excited. But by the time I think we finished dinner, we were exhausted, because of the time we put into it and the effort we put into it — everyone went to bed early. So it was kind of anti-climactic. He used the analogy of — my father used to always talk about back in the Oilers' heyday, that they lost to the Islanders, and they walked by the dressing room after, thought they'd all be

9:53celebrating — they were so tired. Yeah, to win the Cup — in Wayne Gretzky's book, they're laying on the floor, they've got ice packs on them or whatever, they look like they lost, and they were the guys that actually won. Because they looked more beat up — shows you what it takes, right? I think what Gretzky said at the time is that that's what it takes to win. Yeah. Absolutely. An Oilers fan yourself? Well, not necessarily. I mean, I like

10:15Canadian teams, obviously.

10:25No, you can't knock them, they're playing well. Yeah, and we're not going to get into talking about that. Thank you. Maybe though — I know you guys just, I think you just completed the MUN Core Science Facility? Yeah, we're contracted, yeah. We're close to the finish — we're in the final throes of closing that out right now. So, you know, that's been a great project for us, great project for Newfoundland, great project for MUN, great project for the Newfoundland

10:51subcontractors that we've had in there. Certain contractors had to come from outside of Atlantic Canada to assist — a steel contractor specifically, very tight schedule. They came in, they put up two tower cranes, we got that done very very quickly. The precast contractor came from outside as well. But for the most part, all of the other trades — other than the glazing trade, which was out of Toronto — the glazing trade, sorry — for the most part, all the other

11:19trades were Atlantic Canadian. Do you find there are just those specific trades that, on these large projects, Atlantic Canada doesn't have the capabilities to do those large scopes? No, not necessarily. I think maybe more so than the mainland — in the rest of Atlantic Canada, Nova Scotia, New Brunswick, we have large enough trades that can take on those. But when you're moving to Newfoundland, I think the Quebec firms and Toronto firms can

11:48compete equally as well in Newfoundland. So with the MUN Core Science Facility — and it being a design-build — I know, you know, the four pillars of — correct me if I'm wrong — CM, one was design-bid-build. So it was a hard dollar bid, okay? Yeah, that was already designed when we picked it up. Right. So, a five-year project, and at that time it was the largest one that MARCO had achieved in the bidding.

12:17Absolutely, yeah. So, when you do a project like that and it takes that long and it's that big, is there anything you can speak to on the journey of that, and how it went — some of the positives or negatives, or just — I'm sure you could go on all day about that. Yeah, I mean, on a smaller project you can look at it and say, well,

12:40we're going to need a project manager, we're going to need a superintendent — and then you start looking at the magnitude of this job and you start saying, well, we're going to need four superintendents and we're going to need five coordinators, we're going to need a mechanical-electrical coordinator, we're going to need three safety people, and we're going to need an assistant project manager, we're going to need a project manager, we're going to have the project director in — and all of a sudden you start looking at

12:59this amount of people in your overheads, and it's just like, wow. And then you start debating back and forth with your senior leadership team about how many people you need and what have you. So that was probably the biggest piece for us — just trying to get the overheads and get the manpower right, so that we can answer the questions on time, we can supervise the work on time, we can push the schedule on time, we can meet

13:21our deliverables. So that was the biggest learning curve for us. Yeah, it kind of makes me think of what you mentioned earlier about when you started from the island and moved to, you know, $25 million, and how far MARCO has come. I guess you have those small breakthrough milestones every year or two where you get a job like that — it's just kind of a new territory, and there's always going to be uncertainties, and you're

13:45— I think every job is a great win in the success, right? Whether it's negotiated, whether it's a hard dollar, we take nothing for granted. We're appreciative of every client and every job that we get, because we do remember the days that are lean. And I know when Tom and Chris put their faith in me in 2003, it didn't go as well or as quick as I thought it would. We were probably six months in without a project, and true to their

14:17character, they stayed with me and believed in me, and eventually we started picking up some work. And I remember a guy in particular, Stu Crawford — he was working for Ivanhoe Cambridge — and we had done some work over there, and I went to see him. He said, "Look, I'm going to take a chance on you." But he looked me in the eye and he said, "Do not let me down." And I kind of take that with every client from now on moving forward — they are

14:43putting their trust in us, no matter even if we have a résumé that'll support it now that maybe we didn't before — they're putting their trust in us. And we should do everything we possibly can to not let them down. Yeah, I think it speaks to — every man needs a challenge — that's always just what it is. When you get a contract, you know, there's a lot coming at you, and yeah, there's going to be a lot of

15:06challenges down the road, but that's what we thrive off of — that's what makes us get up in the morning. Yeah, no, quite. And we try to go to our comfort zone and try to take on bigger challenges. There's a gentleman that's had a long history with Tom — Michael Novak at Sonco — and he's been a great client of MARCO and a great friend of MARCO for over 30 years. Mike would have an idea and we would

15:32bid it and support it, and it wouldn't go anywhere, and then we'd do another one, another one, another one. In '08, that's when we landed the casino in New Brunswick — that was about a $75 million job, and that was a massive piece of work for us. I think we signed it a few weeks before the market collapse in the States, so we were virtually unaffected through that because we had this big anchor job that took us through all of that. And then

16:00when the feds came around and brought the infrastructure money, we jumped on that bandwagon. And then that's kind of what brought us to Calgary — another job for Mike. He went to another casino up there, so we kind of went out there. And then we had a client here in Germain Hotels that we did a couple of hotels for — won one in Newfoundland, one in Halifax, and we did two for them in Calgary. So it's important to keep those relationships.

16:23And I think that's in the foundation of MARCO — we get a client, we hang on to them, we treat them well, we don't let them down, and we make sure that they know we appreciate the relationship. When you're diversified like that, it's going to get you through all the different changes in the economy. And absolutely, every province is different, and certain things are moving fast — healthcare, like you said, schools. You're building more schools now again. Yeah, you did the J.L. Hillis High School

16:48for one. I mean, there's all kinds that you guys have done and are currently doing. Yeah, that one's an exciting one for us because that's a big school — it's about $40 million. It was the first collaborative design-build school, or project, that the Government of Nova Scotia ever did. So they went out for bids, and it was obviously technical and a price mechanism, and we won that with the team of Mike Harvey Architects. Yeah, Mike's a great guy, he's

17:15been great, got a great reputation — terrific, terrific guy. So we put a team in around Mike and we went through a collaborative design-build process with the Province. You've got the school involved, you get the user groups involved, you get the educators involved, and the outcome is a school for that community. So is that all done on BIM? Yeah, yeah, we will be. Yeah, for sure. Revit and BIM, yep. Absolutely. So how is that — is design-build something that MARCO does a lot, or just when the opportunity comes?

17:48Yeah, I mean, we're doing more and more, and I think the delivery models are changing. I think the days of the hard dollar bid are leaving — although that is still a certain part of our business and we like that, because it keeps us sharp and competitive. Yeah, it's nice to just get around it sometimes. But design-build certainly is a

18:21big part of our work. And that is true of all P3s as well — they are all design-builds. They're called a design-build, but they're different. And when I kind of look at the construction management jobs that we're doing — they're very much like that as well, where you're in the room with the designers. With a construction management job, you get a chance to have the client in the room and give them exactly what they want on a daily

18:44basis as well. So that's what gets me out of bed in the morning — trying to get involved and creating something for the client that they want, and seeing their vision come to life. So that's one of your notes, I think, that we were talking about — collaboration. Yeah, you love that. And that's part of MARCO — kind of their mission statement. But it's part of their leadership

19:07three tiers — and teamwork. Yeah, commitment, integrity, teamwork — those are what we sort of live by. And when we get an opportunity to get in front of a client and talk to them and let them know about our construction knowledge and what we can bring to the team, and be collaborative — that's where we shine. And that's where we've had a lot of our success. Is there one of the — like, GC, construction management, design-build, P3 — is there one that

19:36you find more challenging? Or is it that there are just different parts — like, if half your revenue was from CM jobs, does that mean it's a better year? I'm just wondering if it — I mean, predominantly what you can get, and they're all great, they all have positives. But predominantly the margins are lower in construction management, but the risk is lower for general contractors because the risk is

20:05pretty much transferred to the owner. But you're only as good as your budgets. If you're giving an owner a budget, they expect you to be able to hold that budget. If you don't hold that budget, then you're probably not going to get the repeat business from them that you want. So we try to give them realistic budgets that we kind of hold to, but the transfer is ultimately back to them — so hence we get a lower fee.

20:28Lump sum jobs — depending on if you bid it right and are competitive enough, maybe you can get a better fee on that. Design-build — like a P3 — there is more margin in that, but there's a massive transfer of risk back to us. Because on the NAMHAF project in Newfoundland we talked about earlier, the liquidated damage penalties on that just for financial penalties are fifty thousand dollars a day for every day we turn this building over late. So that's a

20:55massive risk transfer. So obviously you would have to have a larger margin because of the risk you're taking on. So you want to have a mix, right? You want to have some construction management, you want to have some design-build, you want to have some lump sum — just like if you're managing a financial portfolio, you want to be diversified. Yeah, 100%. Now it makes me think — after what you just summed up there — that's kind of one of the reasons why we

21:19started the show — to have all the different parties in the construction industry that are out there. There are so many players involved, right, to have a building like the MUN Science Centre, for example, or even countless ones just around the block here. To take someone through the process — some of our listeners who maybe are outside the industry — and what it takes. Makes me think of, as a former contractor, where you'd have subs on the site, and, okay,

21:45change orders issue — we're not going to do that until it's signed and we get paid for it — then it goes up the channels. And then you're talking about budget pricing in preliminary stuff maybe two years before the job was even awarded, and the architect got involved, and the stress it puts on a GC or CM when there are all kinds of things changing and it's going above budget and beyond schedule — just so much. And yeah, I mean, we've never been one to hold off on the work because we didn't

22:11get a signed piece of paper. You have to have some trust. That's what I love about Atlantic Canada — people will look you in the eye, give you a handshake, and say, "Don't worry about it, keep trucking, the money will come, we'll look after the paperwork." It keeps the job on schedule and gets things open. I do think we're good at the paperwork, yeah, but at the same token we don't live and die by it. No. And that's the

22:32mentality you have to have, I think, to be successful in construction. Things have to keep moving, you have to have optimism in construction — pessimists don't usually last very long in construction. That probably speaks true to most industries, if not all. What about Prince Edward Island? Have you guys done anything there lately? You said you did some stuff on the UPEI campus over the years? Yeah, we did a couple of nice projects for UPEI.

22:58We did a job early on for Maritime Electric, which is another interesting story. Their headquarter buildings — no, we actually — I think it was one of the first jobs MARCO did off of Newfoundland. I had done some industrial work when I was working for an industrial contractor and had some connections in that world. There was a consortium that wanted to do a modified P3 — it was a design-build, gas-fired LM6000

23:26turbine plant. They came to me and said, "Look, would you give us a price on all the foundations and civil work?" We have this designer on board and we're going to give you all the designs — sounds great. So we signed up, and then the designer kind of didn't do a very good job — didn't give us drawings. They needed a price, so I had to go back and say, well, I kind of built one in

23:46Tufts Cove that was kind of like that. I know they had this foundation, they had that foundation, they had this foundation. So I kind of made up my own design — I'm not a designer, but we had to give them a price on something. And we gave them a price that was, I don't know, four or five million dollars or something like that. Then I thought, well, we may get it, we may not, and I remember I was on vacation and my

24:10business partner called me up and said, "We just got an award letter — what's this about? Can you send me the drawings and what we bid on?" I would if we had them. But anyhow, then the designer actually went to work and we designed it efficiently, and the job went well. We actually made some money. But I look back at that — kind of doing what you had to do. Eighteen years ago, we were surviving. I look back at that now

24:34and go, like, wow, that probably wasn't the smartest thing I ever did, but we got through it and it worked out. Sometimes you've got to have that optimism, trust your gut. There was enough knowledge that I had to be able to push forward on. And now we kind of use that in different ways as we go through design-build — we'll come back and say, look, okay, we did a wall like this, we did a room

24:56like this, we did an atrium like this or whatever, and I kind of remember those costs and how we did it. I'll plug costs in and say, look, that's good enough. We're not going to get a sub price on this, but we'll have to carry this number and hope for the best later on. We take the risk in that. Yeah, I'm kind of picturing someone like yourself, put under pressure — you've got to do this thing,

25:16like you said, design, which you're not — but you've been around it for years, and it just kind of forced you to pull from that library of all the different jobs you've been through. And actually, maybe you know more than you think about that certain part of the design, or whatever you remember from different jobs that were similar. Absolutely. And I think the younger guy is going to get a charge out of that, you know — I'm in the room and we're talking about that, and I'm saying,

25:39I remember this job, or whatever. Now, some of the square foot prices I remember are not applicable, but how you built it is applicable. So what might have been two bucks a square foot back in 2003 is probably 14 bucks a square foot now — that's the only adjustment I really need to make. Yeah. Can we — are you — when we talked about this prior, when you arrived here at the studio, the Adult Mental Health and Addictions Facility in St. John's —

26:08that's a major, major project and you guys are just coming out of the ground now with the foundation. Yeah, we are. We've got a P3 — we're with Plenary, who is, I would say, the premier P3 provider in Canada. And we're with a great design firm in B+H, and Smith and Anderson who's our mechanical-electrical designer, Intuitive as structural designer. So it's a two-part process:

26:40you have to — there's technical scoring, there's a bit of a beauty contest on the technical scoring — what have you done, and what have you? So we want to make sure we've got good design partners that have done this before, and good P3 providers that have done this before. Then our piece comes in, which is basically putting the price on it, working with these great designers and what have you. So that process probably took us three and a half months to respond to

27:08the RFQ. Then you get pre-qualified, and then you've got probably about another six months to respond to the RFP and put a price on it. And then you wait probably two or three months for them to evaluate it, and then there's usually a big announcement — and hopefully you're on the right side of the announcement. So that's about a year-long tender by the time it's announced and you get an award, or don't get an award. Hopefully — we've been very fortunate. I

27:33think out of the five P3s that we bid, we won four out of five, which is an outstanding track record. Because it does cost a lot of money — we have to pay designers to design it. There's a stipend that we do get paid, but the stipend only covers a fraction of the cost. So if you don't win them, it can be very, very expensive. That must be a frustrating day after a year-long process if you miss it, especially

28:02just by, you know — yeah, well, I guess you take some solace in the fact that you're four out of five, so it's like, well, you can't win them all. So I go back to Tom Hickman — I remember when I met Chris and Tom for the first time, and up on his wall there's a picture of two guys sitting in a cartoon, and they're in rags and neither one of them looks like they have any money.

28:26And one turns to the other and says, "I was low on every bid." So you don't want to be low on every bid, right? You only want to be low on the ones you can make money at. Yeah, that makes 100% sense. Is that a Gold Seal project? Is that a LEED project? It's a LEED project — it's a LEED Gold project. Not many of those, right? There isn't. That was the first one for the CCA and the Gold Seal

28:52project. And then the second one that we did was the Berkeley in Nova Scotia for Diane Campbell — that was the one we did in Nova Scotia. That was Gold — so it was LEED Gold. So there's Gold Seal — the MUN science project was the Gold Seal project — and the other project is LEED. So yes, one job was a LEED Gold project. Right, right. And the Adult

29:22Mental Health and Addictions Facility — that one certainly has sustainable elements that we have to meet. Like, 35% above the National Building Code, things like that. And there is — I believe it's LEED Gold on that project. And if you don't meet it — I think we have a two million dollar bond that we have to put up, and if we don't meet LEED Gold on that, then you forfeit two million. So

29:54yeah, there's a little bit of an incentive — there's an incentive to do it. There's risk and reward. But you've got to be a certain kind of corporation in order to pursue these P3 projects. With that situation in the P3 and the LEED Gold — what's your process to ensure that you do maintain that standard? Is it all paperwork, tracking

30:24all the materials that come onto the site? What extra governance does that involve? Well, we certainly have about 19 LEED professionals in our organization that we've got trained. And obviously we would have a LEED designer as part of the team that would sort of give us the roadmap. Then it's up to us to follow that roadmap. But you're right — all the tracking, all the paperwork, all that stuff has to happen at the same time. And the

30:51other thing that has to happen is you have to have good subcontractors that understand the process and follow it as well. So we pre-qualify our trades and we make sure they're doing what they say they're going to do. We tie that to our contract, so they would have certain penalties as well if they failed. Yeah. So maybe we can go back to — let's talk a little bit about the team at MARCO and kind of who makes up the

31:20team, and then sort of jump into the way that the industry is shifting — so much more collaboration and owner involvement and stuff like that. But maybe just run us through your team members and the guys you work with every day. Yeah, I would say the majority of the team members we have are MARCO team members who have made the majority of their career at MARCO. Obviously the Hickman family, Chris born into it, myself there for 18

31:47years. Rod Ackerman has been there longer than myself. He came over to Nova Scotia to assist me getting Nova Scotia up and running — he was our division manager in Moncton for a while when we had that, and then went back to Newfoundland to run that operation. Jeremy Stewart's been with us a long time — he runs all our major projects. Corey Taylor is our operations manager, he's been with MARCO longer than myself. Don Allen's our financial guy, Jada Ruckus our HR person, Neil Pittman

32:23helps with counsel, Kirk Sutherland who just recently joined us as our manager of pre-construction services. So we've got a pretty good group of people. And I would say, in order to maintain and hold on to good talent, you've got to be able to compensate them well, treat them well, give them autonomy, and allow them to do what they're good at. About a year and a half ago, Chris and myself and Rod — who was a

32:56partner at the time — got together and said, "Look, we need to do something more than what we're currently doing." So we reorganized our business, we changed the share structure, we brought in more partners. Rod's now a significant shareholder, Don Allen, Jeremy Stewart, and Corey Taylor are as well. And we've gone from a bonus structure with our staff to a pure profit-sharing with all of our staff. Something tangible that the staff can see and touch and feel, and

33:33based on obviously profits and performance reviews and things like that. So we give them a roadmap on how they earn more. When we have a good year, they have a good year — it's connected. So that's been a real game changer for us, from an engagement point of view, from a recruitment point of view, from a retention point of view. The people that are engaged in what we do and how we work bleed blue with us, and

34:07it helps us grow. So it's been transformational for us, and it's been great not only for our senior managers and our owners, but I think also for our staff. What about the direction that you see, Al, the industry heading in? As President of MARCO, a large company like that, just what you're seeing currently and where you see it heading — you were talking earlier about collaboration and

34:36how owners are wanting to be far more involved with a seat at the table and things like that. Yeah, they definitely now want a seat at the table — whether that's the real table or the virtual table. They want to be part of it. And if you're not collaborative with owners and designers now, it doesn't matter what contractual model you have — whether it's P3 or design-build or CM or lump sum — they still expect to have some level of

35:04involvement. So we've adopted a collaborative project management software platform that allows them to see what we see — they see all the correspondence, they see all the pictures, they see everything — and it allows them to help make decisions a lot quicker if they're informed. And we've embraced that. Moving forward, although maybe in Atlantic Canada we haven't seen it yet, you may start to see certain things like Integrated Project Delivery, where you're now bringing in

35:45subcontractors as a risk partner to that project as well. As opposed to just the GC taking the risk, and the designer and the owner — you're now going to start to see major subcontractors, mechanical, electrical, steel, drywall guys that can make a real impact on the job, taking a seat at that risk table with us and being more collaborative as we move forward. I think that's coming as well. And if anybody doesn't believe it's coming, I think they're naive, because I do think it's coming. How soon?

36:13I think the Nova Scotia government's starting to dabble in it now. I wouldn't be surprised that the next school or two might come out as an IPD process, and then that'll start it. So we're training our people now — we're doing coursework, going to seminars, getting ready for it — so that we are, I guess, ahead of the curve, or at least not behind. Not all subtrades might share the risk, but the

36:37driving force is — like drywall that drives the schedule, yeah, mechanical and those — those trades really need to understand the process as well and get on board with an IPD process, and be open to taking that risk on. And the model is basically everybody comes from a profit pool. So if there's a profit pool of a million dollars in this job and we meet the budget, everybody shares in some percentage in that profit pool together. So

37:04everybody knows what everybody's profit is at the end of the day. It's a good model — it's a difficult model — but it'll be again one of those other types of delivery models that will make your portfolio look a little bit more diversified. Sure, spread the risk around a little bit. And I think in IPD, the only thing about that is you cannot lose money, but you could make zero money, which is like losing money, because you do a lot of work for nothing if it goes badly.

37:31Yeah, and I think some of the other things you've got to be open to is the technology that's out there, and you've got to be able to embrace that. When I talk about collaborative software or other types of technology — we've just started one called StructionSite, where we're going in with a camera, walking the site, taking multiple pictures. You can look at it on a PDF, and you can click on that like you would on Google Earth, and it'll

37:54pop up a picture. And the beauty about it is, as you're building this project out, if you walk through the same space multiple times over a number of visits, you'll start to see an X-ray of that wall. So day one you might see studs, day two you might see some electrical in there, and then some plumbing and some insulation and then drywall. So when you finish, you can overlay these and you can see the X-ray of the wall, to be able to hand back to the

38:18owner and say, "We know exactly what's in the wall — here's the virtual X-ray of it." Interference drawings, yeah. It works out rather well. It's just another tool in the toolbox. Yeah. I see on one of your notes here — influencers — Velocity Advisory Group and things like coaching, both corporate and individual, and personality tests like Myers-Briggs. Yeah, hierarchies and stuff like that. So that's sort of the psychology that you bring into — you know what I mean? For a long time I

38:50think construction companies were closed to that, right? We were — put your boots on, do your work, and go home at five o'clock. But owners trying to be more collaborative and what have you — we actually had to learn how to do that in a better way. Obviously there's a lot more education in construction as a career right now — we're seeing more CETs, more professional engineers, more professional people coming into the

39:20business, which is great. They have a different expectation of how to be treated and what they want to accomplish as a career. So we started down that path. We have a terrific partner in Travelers, which is our bonding and surety company, and they have an organization called the Family Business Institute, where they pair you with peer groups that are not in your market. So we're paired with peers from Winnipeg, Texas, and California businesses as well,

39:55because you're the second-generation family. Yeah. And I would say they call it the Family Business Institute, but it's probably an older term — I don't think all of the guys we're partnered with are family businesses, but they're all about the same size and they all do sort of the same kind of work. So we meet on a bi-annual basis with them and really take a deep dive on their business, and in turn they come up and take a deep dive on our business, and look at everything —

40:22interview our people and what have you — and then they give you a roadmap from a peer perspective and say, "Here's what you need to do." Out of that, we met this company called Velocity Advisory Group, which is a coaching — yeah, coaches. And when you talk about Myers-Briggs — not really Myers-Briggs, but they do a personality test and they kind of make it fun. We had all kinds of those — I mean, StrengthsFinder — there's all kinds of

40:51different ones. But they do it in a unique way where — I can't remember what colour I was or if I'm an introvert or extrovert, I kind of know I'm an extrovert probably — but they worked it out in a very cool way where they give you a bird. So I'm an eagle, and then there could be a dove, or a parrot, or an owl — the owl would obviously be very studious. And they just sort of explained — eagle sounds way better. Yeah, well, yeah, but eagles die early, they

41:17say, because there's so much stress in an eagle's life. And then we went through and sort of covered the pros and cons of everything — like, the most successful parrot in the world is Richard Branson. Who wouldn't want to be Richard Branson? So that allows us to start connecting with other people. Our staff now can walk into a room and see who the eagles are, who the doves are, and what have you. So you might

41:44talk to a dove in a different way. And not that it's that warm and fuzzy, but it just gives them the ability to connect with people and treat them the way they want to be treated. As opposed to — if you are an eagle, you walk in and you take it in a certain manner, and you might really offend people that don't live your way. So anyhow, it's unique.

42:11We've kind of evolved and grown from that. And then we've given some of our senior leadership team some professional coaching, which is confidential, just to help them grow. We figure if they're going to grow, it'll be better for our company. So it's been a shift, it's been good. We've taken good advice. I think we've given good advice to our peer group — we've helped them and they've certainly helped us. They've pointed out our blind spots that we

42:36didn't know we had, and we were able to add staff to fill those blind spots. HR, legal — things that we didn't know we needed, but now that we've got them, we don't know how we'd live without them. Yeah. Anytime I have — we get on the show here with presidents like yourself, we had Doug Ducett last week — yeah, I know Doug well — a few others, and I always find it interesting. I like to

43:02ask personally — what would a day look like for you? Where do you spend most of your time? Is it in the tender processes, is it front end with clients, is it the vision and those big meetings and things like that? I think it's interesting for our listeners to hear about a president like yourself and what a day looks like, or where your time gets allocated and where you

43:30find it's most valuable. Well, it's evolved over time. When we were a very small shop, I did everything — I went out and ran job sites, helped pour concrete, delivered coffee, estimated, worked at night. I remember my business partner Christopher coming over and we had a lot of pizza, we worked until 11, 12 o'clock at night, didn't sleep, and the next day had to get up and actually go and do the work. Over time, you grow — you have to give up some things by hiring some smart

44:01people and allowing them to grow: project managers, superintendents, operations managers, accounting people, estimators, managers of pre-construction. And then through the Family Business Institute and Velocity, we did some strategic planning. We looked at that as a leadership group, because I was doing what Rod was doing, Rod was doing what I was doing, and Corey was doing what Jeremy was doing — and we were all doing very well, but we were kind of

44:32getting in each other's way. So we kind of looked at that and said, "Look, what are you good at? Where are your strengths?" My strength — you started out in estimating — it's on the pursuit side of the business. Rod's business is on the construction side of the business, and Chris and Don's is on the financial side. So I kind of look at the construction company as a three-headed monster: you've got to get the

44:54work, you've got to do the work, and you've got to pay for the work. So that's kind of how we started to streamline our senior management. And then we started to streamline that second-tier staff down from there — the next leaders of MARCO — and get them aligned to where we're thinking as well. Was that journey difficult for you? Like, coming from the background you did, when you say "delegate" — is it hard for you, was it hard for you through those

45:18phases to take your hands off things? Yeah, it still hurts, and it's still — I think anybody that tells you any different — you've got to trust people, right? But I find when you do trust them and give them autonomy, it comes back and rewards you and allows you to grow the business. I don't think most people understand the battle it would be for someone like yourself, that you have to have all this delegating and

45:46then trust them — it's hard mental work. Well, you can either work in the business or work on the business. You're never going to grow a business if you work in the business — you have to work on it. So in order to work on it, you have to have other people working in it. So yeah, my day has evolved — it's more on the pursuit side now, business client development, relationship, still the day-to-day business of MARCO in Nova Scotia, New Brunswick, PEI,

46:11and somewhat Calgary. But now I have people I can point to and say, "Hey, Jeremy, hey Corey, hey Rod, hey Kirk — this is in your domain." I can be the connector, the linking piece, whatever. And then I work more closely with the pursuit side of the business, the estimating side, the client relationship side. Every once in a while, if there's a fire to be put out on the

46:35construction side, I'll jump into that as well. Or I'll draw these guys into the pursuit side if I need operational help and support — to help us put a massive schedule together on a big pursuit we're doing or what have you. It's a teamwork thing. But yeah, you've got to — if you try to do everything every day, your day will never end, especially the size we are. Yeah. I wanted to ask you about

47:03negotiating. I mean negotiating whether it be with your colleagues or people working under you or with you, but especially in construction, when you're dealing with so many big contracts all the time — subcontracts — negotiation is a big part of your job, I would have to think. If you could speak to whether that's a learned skill or you're born with it — is it inherent, or can you learn and get better at that?

47:37It comes down to boundaries, and those kinds of things. Negotiation — fear of failure is a good motivator. If you fail, it could mean massive penalties, so it keeps you engaged. I've gotten a couple of pieces of advice from people smarter and wiser than me. They said, "Make sure when you go to the meeting, you know more about what you're talking about than the person you're meeting with." Never go into a meeting trying to wing it. Be

48:00prepared — make sure that you've got your ducks in a row and you know what you're talking about when you walk in, otherwise you'll get eaten alive by somebody who knows more than you do. I remember a member of YPO, and our platform is education. We brought a lady in by the name of Victoria Medvek — she is a professional negotiator and she teaches how to negotiate. One of the stories she told was she wanted a pool and her husband never wanted a pool, and

48:29for 20 years they never had a pool. So she walked in one day and the excavator's in the backyard, and the husband said, "What are you going to do?" She said, "Well, we've had no pool for 20 years — now we're going to have a pool for 20, and after that we'll decide if we want a pool or not." So that's one way. Yeah, right. You know, they do say that if you're negotiating on price,

48:54the person who puts the number on the table first normally gets what they want, because the other side might have an expectation that's very different. So there are some techniques to it. But I think it's more about — you've got to look the guy in the eye and be fair. Look, I need to get something out of this and you need to get something out of this. You have to have a win, and I have to have a win. And there's always a

49:17middle ground somewhere. That needle may shift a little bit, but if you think it's going to be 100 and 0, you'll never have a successful outcome. You've got to allow the person across the table to have a win. So you find out what's important to them — what's important to them may not be what's important to me, and what's important to me may not be what's important to them. So if you sit down and have an honest conversation, you can find out what's important to

49:42them, and you normally can find a middle ground. Allan, you're the winner of the Atlantic Business Top 50 CEO Hall of Fame. Is that — yeah, yeah. So when was this? This year? I think I finished up a couple of years ago, yeah, just before COVID hit. They're doing galas now, which is unfortunate — hopefully they'll get back to that. But it's a great program. I went through it for five years and met a lot of great people, and it was

50:10a lot of fun to go through. That must be satisfying. Yeah, I mean, I did it more corporately — I know it's an individual award, but honestly, without MARCO and what we've accomplished together, Al MacIntosh doesn't win anything. I think the only reason I win it is because I'm representing the team that we all built together. And sometimes somebody has to take the accolades for that, which is

50:35different than maybe some of the other awards we've won corporately. I want to touch on some of those other awards — I'll just list them off and you can maybe touch on a few and the meaning behind them for you and for MARCO. Halifax Chamber of Commerce Business of the Year finalist — bronze — that was a personal award, and you were bronze, third behind two wonderful ladies. Well, when I saw the list of

51:00finalists, I figured third place was about the best I was going to do when I saw I was up against Jennifer Gillivin and Starr Dobson, who are two tremendous leaders in Halifax. I was pretty happy just to be in their company. It was a great opportunity to meet some wonderful people, support the community, and I was happy to be involved in that. Thanks for mentioning that. So Deloitte's Best Managed Company for multiple years, Progress Magazine Top 101

51:33Atlantic Canadian companies multiple times. Yeah, Progress Magazine is obviously no longer around, but when it was there, it was good. That was for every business, including public businesses as well — you're up against the Empires and the Nova Scotia Powers and what have you. So that was kind of cool. We got a chance to meet a lot of interesting people through that. And then the Deloitte Best Managed — that's a national award, and we're very proud as an

52:02organization to win that a number of times. And of course, with the major milestone projects you've done in Newfoundland-Labrador, you've got the Newfoundland and Labrador Construction Association Rock Awards. Yeah, absolutely. We won a few of those. And we won some Nova Scotia safety awards as well. Look, you can't be in construction without safety being one of your pillars — what's important to you — and making sure everybody is home at night. We have full-time

52:27safety professionals who work with us, and every person goes through mandatory training. We all look after each other, and that's extremely important to us. Do you want to touch on your Calgary office, Al? That's kind of a newer thing, kind of pre-COVID. Yeah, we can talk about that. So we went out to Calgary with Mike Novak first of all.

52:57I didn't know much about the Calgary market, although I did work for a Calgary construction company as an arm of them in Nova Scotia a number of years ago. I knew the city enough to move around it, but didn't already know the subs out there. Mike Novak said, "Look, we want to put an addition on the casino, very much like we did in Moncton — would you be interested?" And I said yes, but I think we need a strategic partner.

53:19So we went out there and found a strategic partner, went through and put some pricing together, gave Mike a budget and a plan. And I said to the strategic partner, "Look, we're bringing something to you, so you really need to bring something to us. Here's how I see our strategic alliance working — on anything of a certain size and in different geographic regions, we'll bring you in, and likewise if you have a client, you'll

53:50bring us in." They'd gone through some leadership changes at the time and they just signed off on the pro forma that I put in front of them. I remember Chris calling me one day and saying, "What are we doing with this?" And I said, "Look, I'm very uncomfortable just giving a project away that I think we can do on our own." And he said, "Do you really think we can do this on our own?" I said, "Absolutely, and we have some people who are willing to

54:14go out there." So we did that, and the project was an amazing success. We really liked working in Calgary — the subcontractors were very, very good, they treated us well, the designers treated us well. And we said, "Look, we'd always open up an office in Calgary if the opportunity came up." We did another hotel out there — we did one for Germain Hotels — and then we were embarking on a second one for the Germain Group in Calgary. We thought this was the right timing,

54:41so we hired a gentleman and opened up a very small office there. We were very excited about this, and that was probably up and running in November of 2019. And lo and behold, in February and March of 2020, COVID was in full bloom, and the oil prices dropped and everything tanked. So despite our best efforts to keep getting work out there, there was no work really to bid. The project that we did have got

55:16shuttered because it was a hotel, and the hotel industry took a beating. So we ended up putting that office on pause. Whether we head back out there or not, we still have a shingle — the office, cell phone lines and what have you. We still have some staff. But whether or not we will continue and bring that forward — the opportunities here in Atlantic Canada, we don't think we're done with yet. We still think there's room to grow

55:45in Atlantic Canada. Yeah. Our focus is — we're able to compete here. It's not as if things aren't busy here either. No, things are busy enough. And with the resources we have and what we can accomplish here in Atlantic Canada, that's where our focus is. Do you want to just touch on MARCO's annual giving — certain things you're tied to with some of the things that go

56:12on here — the IWK and those kinds of things? Yeah, I mean, at the last count we're probably into above 30 charities that we're giving back to on an annual basis, obviously at different levels of contribution. The construction industry has taken up the torch on the Great Big Dig, and we've had our leadership team on the committee for that — I sat on the committee for a while myself.

56:42I think that's an important one. And we do it in a couple of ways — we support our clients when they reach out to us, we'll step up in a big way to support them. We'll support our staff when they have some wishes on things they want to accomplish. And then we look at ways to give back to the community where we can get involved and make a difference — whether it's Habitat for Humanity, for example, where we

57:11got our staff actually swinging hammers and hanging drywall and things like that. So it was kind of cool. But you'll never see MARCO patting ourselves on the back in the social media circles for that — we do it very, very quietly. We do give back, but we don't do it for the accolades of, "Look at what we gave here, look at what we did there." We're very conscious of the

57:37fact that we don't really like to go out and ask our supplier base or subcontractor base to support our initiatives. We do it in-house, we do it quietly, and we do earmark a certain amount of our profits to give back to the community. We do it in a softer, more understated way, but I still think it's very impactful. Anything else you want to mention, Allan, before we wrap up? Just anything current, or future plans, vision — anything to sum things up or that's on your mind that we haven't talked about for MARCO?

58:02Nothing really comes to mind to me — it's very exciting times for us. And I think in Atlantic Canada as a whole, there's been a lens put on Atlantic Canada with our Atlantic Canadian bubble. We've been the envy of not only Canada but a lot of the world, and how we protected

58:31each other. And I think this is going to be looked at as a unique place to live and to do business. People don't need to be downtown Toronto to do their business now — with things that are going to be remote, hopefully when the borders open we'll see immigration kick back in. And I think that's going to be good for everybody. I think that'll grow the industry and bring people into the construction industry as well. So I think we're in pretty good shape

59:00here for the next five or ten years in Atlantic Canada, and that'll be good for everybody in our community. We just have to get everybody immunized — go and get your shot if you haven't done it, get your second shot. Let's just — got your second one? Second one's coming on Tuesday, I can't wait. And then let's get back to business. Look forward to that. Absolutely, 100%. Well listen, Allan, I really appreciate you coming in. I know you're

59:26meeting some colleagues for a cold one around the corner. Really appreciate your time — it's an honour for me to sit with you, it's an honour for us at the podcast team here to have someone like you on here. To hear about your stories, to hear about a major player like MARCO, to have you here is a real honour. It helps us and it just promotes the industry for the great industry that it is and the professionals that are involved. So I

59:49really want to thank you for coming. Well, you're too kind, and I applaud you for what you're doing in the industry. You're shining a light on what we're trying to do, and hopefully people will look at the construction industry in a different light — a more professional light — and realize that this can be a career, and a great career. There are lots of different avenues: if you like mud on your boots, you can have that; if you like sitting behind a desk

60:16every day in the office, you can have that; if you like going out and meeting clients, you can have that. We've got an industry to attract people, and what you guys are doing is opening that lens up for people to see what the construction industry is all about. My way of coming here is to sort of let everybody know — look at construction as a career, get involved in the community. I sit

60:43on the CANS board as well. Make a jump in, give back a little bit, volunteer your time if you can, and help us grow our industry and make it professional. Make it compete against maybe some other industries that university kids are looking in different directions at — and maybe they should be looking here to help us grow the industry. So thank you for what you're doing to support that. Well said. Thanks a lot, Allan. Thank you. Cheers. Thanks for tuning in to

61:13this episode of the Atlantic Construction Podcast. Be sure to follow us on any podcast platform you use. You can also find us on LinkedIn and Instagram — Atlantic Construction Podcast. Be sure to send us a comment or a review — we'd love to engage with you.