Brandon Kephart, president and CEO of Better Building Performance, says that if it hadn’t been for the DOE’s Weatherization Assistance Program, “we would’ve dissolved [BBP’s sister company, Better Buildings Systems] three years ago.” Not only did
BBS flourish, it spun off BBP to specialize in home performance upgrades. The WAP program proved to be a lifesaver when the commercial construction industry in Las Vegas all but dried up about five years ago.
BBS started working on residential upgrades when the commercial construction economy in Las Vegas was, as Kephart puts it, “the worst on the planet.” The company didn’t just suddenly sign up with WAP and the phone started ringing; Kephart relied on his connections within the industry and the contacts he made working with DOE’s Building America. BBS was a part of a team of contracting resources who all had a part in funding the Building America projects with the DOE.
The projects were facilitated via a 50/50 partnership where the other partners were essentially investors in a residential project and Building America provided matching funds. In terms of his company’s investment, Kephart says it was the normal 30- to 45-day labor and material float, consistent with the industry. “I have been presented with other Build America opportunities where the model requires the initial purchase of the subject property in addition to the labor and material float,” he says. “The program is extremely flexible.”
It was the company’s Building America experience that caught the eye of HELP of Southern Nevada, the community action program that administers the local WAP initiative. According to Kephart, the Building America projects provided the opportunity his company needed to move to the front of the line to become a preferred WAP contractor. He stresses that, all things being equal, BBS could have gotten onboard with WAP without the Building America connections, but it was the experience the company and crew gained while working on those projects that made them more appealing.
To qualify, BBS had to meet standard state certification guidelines as well as financial capacity. “Because they are federal dollars, the pay cycle is lengthy,” he says. “Sometimes it gets up to 60 or 90 days, and some have made it over 200 days. They pay, but the big question is when.”
WAP has proven to be “profitable on a large scale.” Not only that, but BBS employees are putting the skills they learned on WAP jobs to use on retail projects and other private-sector jobs. The result has been about 200 retail retrofits, which Kephart says are extremely profitable. “Out of the projects that we did, we’re netting about 4.5% to 5% net profit in weatherization alone,” he says. “Overall, we have about 7% profitability on all projects, which is completely different from about five years ago. But 7% is better than what I get at the bank in the long term. And I have an office to come sit in because of it.”