Fort Fairfield, Maine contractor “fine-Tunes” bidding process to stay competitive.

Fred “J.R.” McGillan, Jr., owner of McGillan, Inc., knows he’s working in a tight market right now. But he relies upon a “finely tuned” bidding process and quality work to keep his Fort Fairfield, Maine, contracting business competitive.

“It’s becoming harder to stay competitive, especially in northern Maine where bigger jobs are few and far between,” said McGillan, who founded his company in 1988. “So you have to fine-tune your bidding process. And you really have to be right on with your estimate, because there’s not a lot of margin for mistakes.”

To maintain his profit margins, McGillan stresses quality work, an ethic he learned from his father, Fred McGillan, Sr. “Dad’s always been a promoter that if you’re going to do a job, you want to go the extra mile and do it right the first time,” he stated. “It’s a lot cheaper than having to go back.”

Broad Capabilities

McGillan, Inc.’s  work includes residential site work, utility projects, road reconstruction, landscaping and retaining walls, and environmental cleanup in a 65- to 70-mile radius of Fort Fairfield.

The company employs 11 people full time and from 25 to 50 during the height of the season, depending on the work load. Janet McGillan is office manager, and key employees include Foremen Mike Enman, Steve Burtt and George Obar and Engineer Harold Grass. 

McGillan grew up working for his father’s construction business, Fred McGillan Company. In turn, Fred learned his craft from his father, Lemuel McGillan, who immigrated to Maine in 1946 from Canada where Lemuel did agricultural earthmoving. 

“He had an Allis Chalmers HD7 and my first job was running it up at Loring Air Force Base in 1948” said Fred. When the rest of his family moved to New Jersey in 1962, Fred stayed in Maine and started his own contracting company. J.R. joined him, working summers until he graduated from college. “He told me that if I still wanted to do this work when I was finished with school, he would help me get going,” said J.R.

McGillan earned an engineering degree from the University of Maine in 1987. Then he decided he did want to come home and take the business “to the next level.”

“I came back in the spring of 1987, and we got the site work for the housing project here in town,” he said. “We complemented each other — I estimated the jobs and Dad worked at getting them done. The next year there was a $230,000 sewer job here, and we were the low bidder. That was our first big job and we just went on from there.”

Slow but steady growth

J.R. McGillan slowly built his company during the 1990s as he landed bigger jobs and increased the firm’s bonding capacity. “In 1992 we were finishing a $1 million water line project for Loring Air Force Base and then we got a $1.5 million Wal-Mart job in Presque Isle. That job proved to our critics that we could get the work done.”

The Wal-Mart project included all the site and utility work for the 95,000-square-foot building, including storm drainage. “We also reconstructed part of Maine Street, adding a lane on each side,” recalled McGillan. “We put in about 75,000 to 80,000 yards of material to bring the site up to grade about 15 feet underneath the store.”

McGillan, Inc. continued it’s steady growth, bidding on site work or utility projects in the area as they came up. Three years ago the company won the contract for expansion of the Wal-Mart store. 

“Wal-Mart extended the store in two directions, so we brought in another 75,000 to 80,000 yards of fill and gravel to make the new parking lots and the fill expansions for the store,” said McGillan. “In the process, we built 16-foot-tall retaining walls to hold the parking lots.”

Other memorable jobs include two landfill project — one for Houlton, Maine in 1995 and the Tri-Community Landfill in Fort Fairfield in 1997-’98.

McGillan crews are currently handling the site work for two additions to the Aroostook Medical Center, part of the hospital  complex in Presque Isle. “We had all new utilities to put in, all new storm drainage and water service,” listed McGillan. “We’re building new parking lots with curb island and lights. Our part of the entire $10 million expansions is just over $1 million.”

McGillan, Inc. is also performing the site work for a new restaurant and banquet facility in Presque Isle as well  as ditching and culvert work for a paving company, and a utility and storm drain project. 

About 20 percent of McGillan’s jobs are private residential projects. The company’s peak season runs from May 1 until Thanksgiving — or later if the weather cooperates. “We do commercial snow removal during the winter, and that’s when we do our maintenance.” said McGillan.

Tough equipment

J.R. McGillan relies on tough Komatsu equipment from R. C. Hazelton Company, Inc. to increase his profit margins. The company’s Komatsu fleet includes a WA320-3 wheel loader, a W250 loader, a PC150 excavator and a D21 utility dozer from Hazelton, purchased with the assistance of Sales Representative Ron Ouellette. McGillan also bought a Rammer E66 hammer from Hazelton. 

He purchased his first Komatsu loader, a 1987 WA320, in 1992 from Ron Ouellette when Ron worked for another dealer. “We had very good luck with it,” McGillan commented. “It’s tough, and the men like it. So when Ron went to work for R. C. Hazelton in 1998, he got back in contact with me to see if I was looking for anything else. I said, “Well, maybe another 320 loader.’ ”

McGillan comparison-shopped the Komatsu loader against its competitors. “The 320 spec-ed out better, the price was better, and the meant like it,” he said. “It was a business decision to go with the Komatsu WA320, but it was a decision based on the preference of the employees. The same thing happened with the WA250 and the PC 150.

“I went to trade our 20-year-old excavator and again, I got prices from four competitors,” he added. “The PC150 was the best buy for the dollar based on the specifications. We’re happy with it. And this year we bought a 2003 D21 dozer.”

McGillan had visited Komatsu’s Chattanooga facility in 2000 and saw the Lincoln auto-lube system on a PC400. He liked it so much he made special arrangements with the factory to have it installed on his PC150. “The man who runs that machine is over 70, so the auto-lube system makes it very user-friendly for hime, he noted.

McGillan’s wheel loaders are equipped with JRB quick couplers. “They make the machines multi-purpose,” he said. “You can do so much more with them. They save a lot of time changing buckets in addition to saving on grease, seals and pins.”

Since J.R. McGillan started buying Komatsu equipment again from Hazelton, he says he has been very happy with the partnership. “Over the past four years, Hazelton has been a big supporter, and vice versa, we’ve supported them,” he commented. “They’ve hired us to do jobs for them and haul machinery, which has helped us, too. I’m very happy to be working with them.”

“Generation gap” a challenge

McGillan sees a generation gap in his labor pool that is going to make it more difficulty to find qualified and experienced people. “Many of the good operators are at retirement age or well over,’ he noted. “We have men in their 70s working for us, but we know eventually we’re going to need to replace them, and that’s where we have a problem. We have a generation gap. We have a younger group coming in, and then the older group, and we don’t have many in between because they’ve moved away.”

In addition to doing quality work right the first time, J.R. McGillan credits his father for teaching him how to work hard “sever days a week if need be,” he said. “I’ve tried to instill that in our people. We have such a short season up here, so you have to work hard. We have a lot of good people who have been a big part of our success.”

McGillan does not see his company growing much larger, mostly because the local economy will not support it. “I don’t see that the work will allow us to expand,” he said. “And I don’t think I want to take on the responsibility of getting bigger. We’re pretty loaded right now with what we have going. So if we can sustain what we have now and keep our customers happy, I think we’ll be content to be in a similar position five years from now.”

He is also looking toward the next generation of McGillans in the construction business. “Our oldest son, Shane, is 10 and he plows snow in the yard,” said McGillan. “He runs the roller and he’s run the excavator. My dad takes Shane with him in the summer and he is learning to operate the grader.”

Developing that work ethic is part of Fred McGillan’s plan. “When you’re between 10 and 15 years old is when you get your best experience and it doesn’t leave you,” he stated. “It stays with you.”

“If you don’t develop that good work ethic at a young age, you’re not going to develop it when you’re older,” added J.R. “We’ve been fortunate to work together as a family, even though there have been a few bumps in the road. We needed each other to get to this level. You need a good support staff, and by that I mean the employees and Janet in the office. A family business can grow and expand, working together and working hard.”

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Phone: (207) 473-4097
5 McGillan Drive
Fort Fairfield, Maine 04742