Wednesday, March 27, 2013

Differences Between Tier 1, 2 Or 3 In Construction Companies

By Jerry Wilson


Every industry has a way to describe the size of its businesses. Some industries use informal classifications like 'boutique' or 'large', while others use official ratings exclusive to the particular field. The construction industry has a specific rating system of 'tiers', with tier 1 being the top rung in the ladder, followed by tier 2 and 3.

What do they mean?

A builder's capacity to carry out a job or to tackle a project is at the root of the tier system. A company's size, resources, capabilities and experience are all taken into account with the type of project that they can tackle. And of courser companies on the lower tiers can move up the tiers as they gain experience, know how.

Tier 1

There a only five tier 1 companies in the building industry in Australia. These are capable and well funded; Leighton Contractors, Theiss, John Holland, Baulderstone, Abigroup.

Example: John Holland's Enoggera Barracks Enhanced Land Force (ELF) Infrastructure. John Holland was contracted for the $1.4 billion construction of the ELF Stage 2 infrastructure at Enoggera Barracks. The development is expected to take over four years and will increase the Barracks' capacity for two more infantry battle groups. Because of their expertise and resources, John Holland was able to take on this large project that would be unsuitable for a tier 2 or tier 3 company.

Tier 2

Tier 2 companies are the middle-sized contractors in the industry that don't have the resources for tier 1 projects but still take on and carry out substantial work.

Hutchinson Builders took on a $82.4 million housing build for aged care and over 50s accommodation with carparks, gymnasium and pool with the Victoria Towers construction to be complete in 2011. These Tier 2 companies usually handle anything budgeted at a range of $10 - $100 million and can include industrial and retail.

Tier 3

These building companies are still big businesses and do take on projects around the million dollar range. There are many of these companies in this sector and all have the opportunity to gain experience and build up their businesses to work their way up the tiers. One example of such work is Brisbane City Council's Teneriffe Ferry Terminal.




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