North American Microtunneling 2018 Review: Northeast Remsco Construction Celebrates 40 years
Founded in 1978 as Northeast Utilities, Northeast Remsco has grown over the last four decades to become a leader in the utility and transportation markets, surpassing $1 billion worth of construction works completed over its history. In recent years, the company has been rolled into JAG Companies, which includes market segment leaders Huxted Tunneling, Caldwell Marine International and ECI Drilling International.
While much has changed over the past 40 years, the company’s core values – key to its early success – are still apparent. In fact, walking into the office of president and CEO Rolando “Roly” Acosta, one gets the immediate sense of openness that is a hallmark of the company. Northeast Remsco’s growth and acquisitions were possible because the firm was open to opportunity – no matter how unexpected; its dynamic nature is a direct result of an open-door policy between the family, management and staff; and its stability seems due – at least in part – to an openness to introspection and outside input.
A wide receiver from Pop Warner through Princeton University, Acosta attributes his management style to his time on the football field. “The experience you have in a team where one day you need to be a leader, the next day you need to be a follower, but the entire time you need to be a teammate – that is our experience here, and the word team means a lot to me. We operate as a team; we use ‘we’ not ‘I’.”
“My dad’s management style is much different than mine. He commands the room where I tend to work a room. But I understand that I don’t have to be him and vice versa. They’re different companies too,” he adds. “My dad had his own challenges trying to start and run a company, but mine are going to be a bit different as the second generation trying to come in and grow an existing operation.”
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When Juan Gutierrez founded Northeast Remsco – then called Northeast Utilities – he was looking to carve out his own piece of the American Dream, fueling his fledgling company with pure entrepreneurial work ethic and a very supportive family. “The office was downstairs,” Acosta remembers. “The dining room was my dad’s office, in the living room was Julie the receptionist, and Carmine the estimator was in the family room. I had breakfast with them before school every day. “
The firm eventually moved out of the home office, mainly working on central New Jersey sewer projects. By the early 1980s they were taking on increasingly larger projects and expanding into Delaware and Connecticut. In the 1990s, Gutierrez shifted focus toward microtunneling to complete more complicated underground construction, and eventually purchased Remsco Associates, pump station contractors. By the 2000s they were in full swing, separately acquiring Caldwell Marine International, Huxted Tunneling, and ECI International by 2014.
Northeast Remsco has been a leader in microtunneling for many years, and completed a landmark project in 2010 – the first planned, curved microtunnel in the United States. As part of the Homestead Avenue Interceptor Extension in Hartford, Connecticut, Northeast Remsco proposed extending the final 310 lf microtunnel an additional 290 lf and incorporating a curve to accommodate a planned 4-degree horizontal deflection. This eliminated the need to construct an intermediate shaft, resulting in time and cost saving.
“The principal challenge [at that time] was to overcome the liability concerns associated with curved microtunneling,” said Richard Palmer, trenchless division manager for Northeast Remsco. “U.S. engineering firms were reluctant to design a project that required the use of a ‘never been done in the U.S.’ microtunneling technique. Fortunately, the designer engineer and the owner were receptive to the idea and collaborated on the final version of that curved microtunnel. It is interesting to note that the change order authorizing the curved microtunnel included language that shifted all of the risk to the contractor; shedding the risk was paramount to breaking down the barrier.”
Northeast Remsco is a founding member of the North American Microtunneling Association (NAMA), with Palmer serving on the executive board. NAMA played a role in guiding revisions to the recently updated “Standard Design and Construction Guidelines for Microtunneling” published by ASCE, as well as implementing new guidelines in the AREMA standards confirming how microtunneling can be used successfully on railroad properties across the country.
The company continues to set the bar higher for its microtunneling projects. In 2017, the firm broke records for its longest drive as part of the three Broad Creek WWPS Augmentation Projects near Washington, D.C. In fact, Northeast Remsco set the mark three separate times during the course of the projects, with the longest being 1,560 ft of 66-in. casing.
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“Long drive lengths create a new set of challenges,” said Northeast Remsco project manager Pete Sudkamp. “You need to consider 24-hour-a-day operations to keep the pipe string moving, and you have to manage your jacking loads, including proper lubrication techniques and the use of interjack stations.”
Despite the advancements, Acosta remembers the early days of the company as he continues forward. “You don’t forget that early stuff. I did my homework on Carmine’s plan table. I loved that it had the overhead light and there was an electric eraser. The vendors we still work with today, back then they were walking into the house while I was walking out for elementary school.”
Decades later, those early memories provided a visual reminder for a lesson learned by many second-generation owners: your challenges will be your own.
“My dad had trouble making payroll sometimes in the early days because you only have so much money on the books to build, and jobs were stopped. But fast forward to when I walk in, and we’ve built this machine and have to keep feeding it. So we’ll definitely make payroll; the problem now is that we need to build more projects to make profit.”
With 27 active projects across 10 states, 340 employees, five operating equipment yards, and more than 700 pieces of equipment, Northeast Remsco now faces the challenges of a large, national firm. “When you take a class in college, they don’t teach you how to run a $150 million company with growth opportunity,” Acosta jokes.
But it’s a point worth noting. “When my dad started out, he was like, ‘Well what do I have to lose?’ Because you really don’t have a lot to lose starting up. But we have a lot to lose now, and that’s going to play in our decision-making.”
And because there is a lot on the line, the company has addressed an area that sometimes gets overlooked in family businesses – succession planning. The transition of power in a family business is a delicate process that often presents a very specific challenge: how do you seamlessly transition not only ownership, but management style and structure in a mature firm?
For Northeast Remsco, it meant bringing in outside help. Unfortunately, Gutierrez was forced to start planning for succession earlier than intended when he was diagnosed with cancer in 2008. If something were to happen, they needed to be certain that everything was in place. Like all companies, Northeast Remsco provides a livelihood not only for the owner’s family, but for the families of all of their employees. It is a stewardship and a serious responsibility and needs to be as planned as possible.
Fortunately, Gutierrez had a steady recovery, but the ordeal pushed the family to take beginning steps. The family engaged consultants to help move the company into a family trust and began the process of advancing Acosta into a leadership position.
“It allowed us to ask the big questions within the family – where are we going? How do we structure this? How do my brothers fit in? John and Brian work here, Angel doesn’t. Then there’s my sister Patty who has special needs – it’s a lot to account for,” Acosta says. “There are still some big questions to answer, and it’s helpful to have a consultant to help continue that conversation and that process. I mean that was 10 years ago – I was only 34. I remember getting a call from an uncle and he said, ‘We trust you.’ Was I ready? I’ll look you in the eye and tell you yes, but was I really ready? I didn’t know!”
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During the succession planning process Acosta and the family began to work with additional business consultants to help with the overall structure of operations for the organization.
“I’ve learned some things from my dad, I’ve learned some things from the people that work here, I absorb some from seminars and the people I meet, but at the same time I still have to be honest that I don’t know everything. I don’t know all those components and having a third-party consultant – it’s not a bad thing,” he says. “It doesn’t mean you’re not smart enough or that you need to work harder. We’re focused on working smarter – it’s not about working a 16-hour day. It’s about making the most of the time you have without burning out. I think our managers really appreciate that, and they’re really a part of that process.”
Transitioning to the boss role can have its perks too. A few years ago, Huxted Tunneling had a large diameter microtunnel project adjacent to the White House. In order to access the project, Acosta had to be cleared at the entrance.
“I had to walk up Executive Drive to get to the job and I had this moment like, WOW! A Cuban immigrant started this company, I’m second generation American, and I’m in the White House driveway walking to our project! It was unreal,” Acosta says. “I don’t have a favorite project, but that was a favorite moment. For us as a family, and for the company this was a big deal.”
Gutierrez and his wife Marta built a legacy for their family, but part of that involved family members striking out on their own. Two of Acosta’s three brothers work for the company, both taking wide turns before circling back home. John Gutierrez, vice president and equipment manager, started as an operator, became a golf pro, and did a short stint in online book sales before coming back as an operator. He then finished school and came on as equipment manager. Brian Gutierrez is the property manager, and recently graduated college. He started out in architecture school, before attending the Culinary Institute of America to become a chef. He then went on to work as a background actor in Los Angeles before coming home to work in the shop.
After graduating Princeton, Acosta worked in sports marketing for several years before coming home to join the family business and ultimately go to law school. “It was funny because the company was called the Gazelle Group, but the group was my boss and me. So, I was exposed right away to what – for our firm – were some very high-level meetings. I gained a sense of confidence at a meeting table at a very young age – I was asked to lead meetings with executives for NBA, NFL and MLB teams. I can enter a room; I don’t find a corner. I learned to walk into a room and engage people. I learned it at work and I learned it from my dad who always said that a room full of people is a room full of opportunity.”
As for the third generation, it’s too early to tell. “Just like me, they’ll either come to the family business naturally or they won’t. I think it’s the same for my siblings: we’ll expose them to what we can, and they either like it or they don’t. This may not be the business for everybody and that’s okay.”
As the interview winds down, Acosta tells me that he shares a quote with the entire company every Friday. “I’ll quote from a Rocky movie, a book, a bathroom partition…I do it to say, ‘Hey take 5 minutes to reflect on this, even if you don’t like it.’ I think it helps continue our message as a family business.”
This article was written by Zoe Baldwin, Director, Government Affairs & Communications for the Utility & Transportation Contractors Association (UCTA). It originally appeared in Utility & Transportation Contractor magazine and is being reprinted with permission.