Engineering Economics, Inc., known familiarly as EEI, is among the first firms in the U.S. to recognize and initiate commissioning as a valued building industry practice. Founded in 1984 as a sole proprietorship by Pete Sabeff, joined by engineer Jeff Nichols, and later joined by Blake Hickok, EEI has grown to become a national engineering consulting, system assessment, planning, and commissioning firm.
We talked with EEI President and CEO Jeff Nichols, CFO Blake Hickok, and EEI Principal/Branch Manager (AZ/NV; National Mission Critical) Russell Feery who shared thoughts about EEI — its projects, recruiting the next generation of CxPs, and its unique transition to a successful new business model.
“Pete was already an entrepreneur and disruptor in the early days,” according to Jeff. “We were disrupting in order to make change in the industry. How fortunate to have been part of that change.”
One sign of a great company is the longevity of its staff. “Many people have been here 15-25 years, some even more,” says Blake. “Our people develop long term relationships among themselves and with our clients. There is more than professional respect — there is a real trust of each other and that the company will do the right thing for us and our clients. We now have about 70 employees, including offices plus project-based profit centers that may or may not have a physical office.”
Three Exemplary Projects
1.Fred Hutchinson Campus, Seattle, WA. As the first-ever project called “commissioning” in the country, the new campus of the Fred Hutchinson Cancer Center in Seattle, WA hired EEI to do the work – and they called it commissioning. At the time Pete, an entrepreneur, was a strong advocate for doing “proof of performance” commissioning. He was tired of fixing brand new buildings.
At the time, Blake Hickok walked into Kent Barber’s office and said, “I’m just a business guy. But it seems outrageous that Hutch is paying us so much to go test other peoples’ work. Kent said, ‘I thought the exact same thing to test all these systems. But we’re already 60% done and we’ve identified a multitude of issues … the client has already told me that this is money well spent!’”
2. Fortune 100 Company, Phoenix, AZ. Russell Feery, who opened the EEI’s Phoenix and Tucson sites, says, “We had a project where we were embedded with the construction firm for the entire project. It was so successful that at hand-off they wanted to hire us to be a permanent member of their delivery team. We still provide services long after to make sure the client gets what they paid for. In turn, they don’t treat us as a ‘transactional’ provider – we have a relationship of willingness and openness.” The Arizona office also gets the lion’s share of jobs from a major university client, which “speaks to our relationship with that university client.”
3. Amazon Rufus 2.0, Seattle, WA. Named for Amazon’s first dog, Rufus 2.0 is Amazon’s West Coast corporate HQ. It is a LEED Gold Certified 3.1 million SF, three-tower campus that spans three city blocks in Seattle’s Denny Triangle neighborhood. EEI commissioned all of the buildings, including the iconic conservatory spheres. One of EEI’s greatest challenges in commissioning the campus MEP systems was the district energy system that uses waste heat from a data center condenser water loop piped under the street to six heat recovery chillers. It creates district heating for five city blocks in the winter, and adjacent buildings use the piping to circulate cooling in those loops in the summer. Each building has TES tanks used to store cold water and act as building pony chillers.
BCxA Founding Member
EEI is a founding member of the BCxA and has been involved since the Association’s infancy. As a commissioning-focused firm, driving the Cx industry is of utmost importance to our personnel, and we firmly believe that the BCxA is the leader in this effort. Eighteen EEI employees are current BCxA members who give back to the industry through membership, volunteer positions, and leadership.
Jeff noted that the BCxA is “becoming more visionary, helping us as professional providers adapt to change, through leadership, training, and continued involvement in places we can influence, good change. That’s happened with ANSI certification and getting the industry to adopt this service as part of the delivery process.”
The Importance of Certification
Having Certified Commissioning Professionals (CCP) on staff is critical to our success as a Certified Commissioning Firm (CCF). The expertise and understanding of these professionals provide our clients with confidence that we will deliver successful Cx on projects of any complexity. Being a CCF with CCPs on staff sets us apart as an experienced and top-tier commissioning provider.
The Next Generation of CxPs
Building analytics and Cx software are growing in popularity to increase efficiency and decrease issues and long-term maintenance costs. EEI expects that these technologies will eventually be used on every Cx project. What’s exciting to me is we have so much opportunity to shape and grow; we still need the personal field hands-on component. We can’t do the work remotely, the industry needs the site presence.
“We are seeing increased staffing challenges for firms seeking Cx providers or tradespeople. The demand for qualified individuals to fill these roles currently outweighs the skilled technical workforce. We believe that firms should prioritize training and developing their talent in-house to address this challenge.”
For current or incoming college students, the firm suggests seeking internships that provide valuable Cx experience and exposure to construction management and processes. For younger students considering a construction career, enrolling in STEM courses that are becoming popular in high schools nationwide is a good idea. These students can then decide whether to pursue further education through college or trades education: Cx benefits tradespeople, CxPs, and facility end-users. Many options and skill sets contribute to Cx and lead to attaining CCP certification.
Someone recently said it’s a complex skillset to understand, both in the field and the technology. They are unicorns in the field. There is so much need and it’s hard to find the necessary level of interest and depth and breadth.
“We’ve tried to hire via many sources, but we also have to grow our own talent,” says Jeff. “This year, we’ll have 12 interns on staff across 5 or more locations across the country. That’s a change. 10-15 years ago, we thought we needed people with 10 years of field experience. Now we have commitment, people in the organization who will invest time, and be a mentor/sponsor, and that’s been successful. Our current staff has 5 interns who then came in right after school, like you see in larger accounting and legal firms.”
New Business Structure
We were a sole proprietorship for decades, which was a good model for earlier years. We examined succession/transition plans over 10 years, looking at different opportunities, but they didn’t seem to fit where we came from. We also looked at trying to do an internal sale. A 100% ESOP seemed like a good idea.
Pete wanted to leave a legacy and maintain EEI’s culture. Usually, when you transfer ownership, you lose culture and consistency. The ESOP model allowed us to maintain roles, which would be a win-win for everyone. You create an employee benefit that looks like a 401k program. We didn’t have to change the structure of the company. coming up on our 5th year. It’s outstanding for employee benefits and additional growth opportunities, for the board of trustees and governance advisory process to set long-term goals.
The ESOP allowed us to do things like developing an EEI training program for in-house staff that enabled everyone to have a career path plan for themselves, where they can see how their plan would grow over time. Challenged us to retain profits that don’t leave EEI, but they go back into the company and are redistributed to the employee stock program. I would recommend that for any company that wants to see continued success.
“When we went to an ESOP,” says Russell, “that got everyone rowing in the same direction – all are successful if one is successful – the value of our stock grows for us all. We all have a sizeable interest in the company.”
Our People Make It Great
“We have grown up over the years,” says Jeff. “We started out thinking that Cx wasn’t provided in the industry, and we called it proof of performance. Through BCxA and PECI when it started out, we were all in the kitchen together. It’s been a great journey — we thought we’d work ourselves out of business (wouldn’t the other people in the industry do it right the first time?) and there’d be no need for us. Commissioning is now a respected service. We can look back and be proud, but there is now so much to do … what’s been so cool with awards like BCxA’s 20 Under 40 is that we can get back to bringing the next generation along. I now feel I can help make that transition to go forward.”