Black & Veatch LLP History

Company Perspectives:

From St. Louis to Singapore, Black & Veatch is there. As an expert in engineering, procurement, and construction, we provide quality work on a fast track schedule for utilities, commerce, industry, and government agencies in more than 65 countries. And, we ensure that our clients receive the best possible value for their investment. Black & Veatch has a staff of more than 6,000 in offices worldwide. Our professionals apply leading edge technology to study, design, construction, procurement, and management services for projects in the power, environmental, process, and buildings markets throughout the globe. We have the scope of capabilities and worldwide presence to perform any project, anywhere.

Company History:

Black & Veatch LLP is a leading global engineering and construction firm. With more than 3,000 current projects underway in 1997, the company projected 1997 revenues to be $2 billion for the year, up from $1.4 billion in 1996. Following a reorganization in 1996, Black & Veatch defined its major businesses as power, infrastructure, process, and buildings. The company also offered a number of related services. The Power Group, with five divisions, enjoyed a dominant position in the worldwide power generation industry. It was known for building reliable, cost-effective power plants on time and within budget, while also providing expertise in the field of power delivery. The Infrastructure Group, with eight divisions, provided a complete range of planning, design, construction management, and related services for environmental and civil engineering projects in areas such as water supply, treatment, and distribution; wastewater collection, treatment, and reuse; solid waste recycling and disposal; and hazardous and toxic waste management, among others. The Process Group consisted of the newly named Black & Veatch Pritchard, Inc. (formerly the Pritchard Corporation). With more than 70 years of experience in natural gas processing, petroleum refining, chemical synthesis, cryogenics, and energy-related services, Black & Veatch Pritchard offered a full range of services from feasibility studies to plant start-up and operator training. The Buildings Group provided a complete range of project delivery services for many different markets as well as architecture, planning, interior and graphic design, engineering, and program management services. In addition to the four above-mentioned groups, Black & Veatch offered such related services as management consulting, procurement and construction for all types of telecommunications infrastructures, engineering and design services for various transportation industries, and airport services including airport planning, facilities design, engineering, and management services.

Company Origin As a Partnership Between E.B. Black and N.T. Veatch in 1915

The multi-billion-dollar construction and engineering firm that is Black & Veatch was formed as a partnership in 1915 in Kansas City, Missouri, between two men, Ernest Bateman Black and Nathan Thomas Veatch, Jr. According to the company's 75th anniversary annual report, the company's founders were "astute, careful businessmen who established and demanded exacting professional standards."

Veatch and Black were engineers who worked for the J.S. Worley Company, founded in 1908 by John Worley from Toledo, Ohio. When he started the company, Worley had invited Black, a former associate, to join him. Working out of a one-room office in Kansas City, which was then a bustling town full of opportunities, the two began designing and building water works, road paving, sewer systems, and electric lighting projects. The firm expanded in 1911 to a three-room office. It numbered some 32 communities among its clients. During the expansion N.T. Veatch ]was hired as a resident engineer to work on the construction of electric light and water plants. In 1912 the firm changed its named to Worley & Black, with Worley as president and Black as vice-president. Two years later the firm expanded into a nine-room office, with Veatch listed as the principal engineer. By the end of 1914 the firm had completed projects for more than 100 communities and private companies.

After Worley left the firm in 1915 to pursue other interests, the partnership was reorganized in August 1915 under the name of Black & Veatch. The two men shared similar backgrounds: both were from Illinois but had grown up in Kansas and both were graduates of the University of Kansas. Shortly after the partnership was formed, the United States became involved in World War I. The newly formed partnership's struggle to survive was helped by obtaining its first federal contract from the War Department, to design and supervise the construction of Camp Pike in Little Rock, Arkansas.

Sustained Moderate Growth Throughout the 1920s and 1930s

Several factors helped Black & Veatch survive the tough times of the Great Depression that followed the stock market crash of 1929. One was the company's association with the Jackson County road project. Veatch, a Republican, was appointed by Harry S. Truman, then a county judge and later President of the United States, to a bipartisan team charged with designing and supervising the road system's construction. After Truman became President, Veatch was often invited to the White House.

Another factor that brought business to Black & Veatch was the passage of the Public Utilities Holding Company Act in 1935, which forced the breakup of large utility companies. With ownership in the companies being transferred, there was an increased need for appraisals and rate studies, many of which were conducted by Black & Veatch during the 1930s. In 1935 the firm was able to move to a larger office in Kansas City's Country Club Plaza, considered to be the first suburban shopping center in the country.

Federal Contracts During World War II

With the United States' involvement in World War II, Black & Veatch obtained federal contracts to manage the construction and engineering of numerous Army camps as well as several Army and Navy air bases. Toward the end of the war, Black & Veatch was hired by the Atomic Energy Commission to provide design work and engineering services for highly secret activities at Los Alamos, New Mexico, where the atomic bomb was being developed. In 1946 Black & Veatch created its Federal Division to handle these projects.

Following the end of World War II in 1945, Black & Veatch expanded into other new fields, including that of electric power. From early design projects for small systems, the firm soon began to be selected to work on major design assignments for large power companies.

Reorganization in the 1950s

Following Black's death in 1949, Veatch kept the firm's name and carried on as sole owner. The firm was later reorganized into a new partnership effective January 1, 1956, with Veatch as managing partner. In addition, the new organization included six executive partners and 23 general partners. By giving away these first partnerships, with the stipulation that retiring partners take nothing away from the firm, Veatch provided for the perpetuation of the organization and guaranteed orderly management transitions for the future.

In 1956 the growing firm designed and managed the construction of its new headquarters in Kansas City. The new two-story building was featured on the cover of Engineering News-Record, in part because it was unusual for a consulting engineering firm to design its own office building at that time. With 37,500 square feet, there was enough room for 350 employees and a 200-car parking lot. In 1963 the firm expanded the building to 53,000 square feet by adding a third floor.

After exploring the possibility of taking on overseas projects, Black & Veatch International was established as a subsidiary corporation in 1962 under the direction of Thomas B. Robinson, who would become Black & Veatch's managing partner upon Veatch's retirement in 1973. The first international project undertaken by Black & Veatch International was to design electric distribution system improvements for Dacca and Chittagong in East Pakistan (now Bangladesh).

Rapid Growth in the 1970s

With the company doubling in size between 1971 and 1975, Black & Veatch completed construction of a new six-story building for its offices in Overland Park, Kansas, in 1976. Located near College Boulevard and Lamar, the Power Building, as it was named, had more than 276,000 square feet. The area was primarily pasture land at the time, but the College Boulevard site would later become the center of a major commercial district for the greater Kansas City metropolitan area.

In the late 1970s Black & Veatch continued to grow and diversify through acquisitions. In 1977 it acquired Trotter-Yoder & Associates, a consulting engineering firm located in San Francisco, California, that would become the basis for Black & Veatch's West Coast division. That same year it also acquired Southern Science Applications, Inc., of Dunedin, Florida, which specialized in nuclear engineering consulting.

Two major acquisitions were made in the 1980s. The first, in 1982, was Moore Gardner & Associates, which became Black & Veatch's Asheboro, North Carolina, office. The second, in 1985, was the Pritchard Corporation, a petrochemical engineering company. Pritchard would become a key element of Black & Veatch's Process Group, which specialized in petroleum refining, natural gas processing, chemical synthesis, and other energy-related services to the process industry. In 1996, The Pritchard Corporation announced plans to change its name to Black & Veatch, and for 1997 adopted the transitional name of Black & Veatch Pritchard, Inc.

At a time when new development in the power field slumped as utilities relied on surplus generating capacity, Black & Veatch took a chance and allocated $30 million for the development of POWRTRAK, an automated power plant design and project management system. As POWRTRAK proved it could reduce costs while ensuring high levels of performance and operation, it became a key factor in Black & Veatch's leadership in the power plant design industry. By 1996 Black & Veatch had applied the POWRTRAK concepts to its own business systems and appointed John Voeller, the chief architect of POWRTRAK, to the new position of chief technology officer.

The passage of the Safe Drinking Water Act also brought a substantial amount of new business to Black & Veatch in the 1980s. The firm became heavily involved in the modification, upgrading, and expansion of municipal water plants to bring them into compliance with the new guidelines. Black & Veatch opened approximately thirty new offices during the decade to serve the growing municipal market.

International Growth in the 1990s

Black & Veatch began the 1990s with a new organization and new headquarters. At the beginning of 1989 the firm's executive partners, under the leadership of managing partner John H. Robinson, who had succeeded Thomas B. Robinson in 1983, reorganized the company into four operating groups: Energy, Environmental, Facilities, and Resources. The Energy Group was focused on power generation, transmission, and distribution. The Environmental Group covered a variety of environmental, infrastructure, and civil engineering projects, from water and wastewater treatment and distribution to dams and tunnels. The Facilities Group provided a range of architectural services to clients in different industries. The Resources Group offered a variety of support services in an expanding number of fields.

Black & Veatch also moved into new corporate headquarters at 8400 Ward Parkway in 1989. The company designed the 120,000-square-foot building to accommodate 500 employees in executive administration and other business units. In 1996 the company completed construction and began moving into a seven-story, 300,000-square-foot addition to the building. By the end of the 1980s, Black & Veatch had some 4,000 employees in offices worldwide and had completed more than 16,000 projects.

During the 1990s Black & Veatch saw more of its major projects coming from overseas than from the United States. As a result, the company took about a year longer than previous to complete approvals and obtain financing. Overall, revenues grew to $985 million in 1994. In May 1995 Black & Veatch merged with the British firm Binnie & Partners to form what the New York Times called "the biggest company in the world that engages in improving waste-water treatment and the supply of drinking water in developing countries." Binnie & Partners, "one of the longest established and most respected consulting partnerships in the United Kingdom," according to Water Briefing, added about 1,200 employees to Black & Veatch and approximately $65 million in annual revenues. The British firm became a separate division within Black & Veatch's Environmental Group.

Black & Veatch continued to grow its international business, with the stated goal of having at least half of its business come from overseas by the year 2000, with the acquisition in 1996 from Thames Water, Plc, of its Paterson Candy Ltd. (formerly, PWT Projects Ltd.), a British-based water treatment process contractor, and PROWA, a German engineering firm specializing in wastewater treatment, river engineering and hydraulics, water treatment, and hazardous waste management. In addition to acquiring those design and construction units from Thames Water, Black & Veatch entered into a strategic alliance with the firm to pursue large water and wastewater concessions in Eastern Europe, Asia, Africa, and South America. Thames Water was known as one of the world's leading water companies serving the city of London, England, and surrounding areas.

In 1996 Black & Veatch also completed a further reorganization and named new leaders to several business units. The four operating groups were realigned under power, infra-structure, process, and buildings. In addition, managing partner John H. Robinson, Jr., was named to the new position of chief development officer. At this time Black & Veatch was run by a management committee consisting of five managing partners, under the leadership of Chairman and Chief Executive Officer P.J. Adam. With the help of an outside consulting firm, Black & Veatch also streamlined the processes by which it delivered support services to its projects and business units.

Black & Veatch also aggressively diversified into new fields, such as telecommunications, in the mid-1990s, building more than 1,100 Personal Communications Services (PCS) antenna sites in the United States in 1996. The company expected its telecommunications division to contribute approximately 20 percent of overall revenues in 1996.

The theme of Black & Veatch's 1996 annual report was "Expect Success." With more than 3,000 projects underway in 1997 and a long list of awards to its credit, the company's clients could count on Black & Veatch for the engineering services they needed for successful projects. The company's plans for global expansion were given a boost in mid-1996 when the General Electric-led consortium that included Black & Veatch won a highly competitive $1.8 billion contract to build two nuclear reactors for the Taiwan Power Company. Together with the 1995 merger with Binnie & Partners and the 1996 acquisitions of PWT Projects Ltd. and PROWA Consulting, Black & Veatch appeared to have the resources and organizational skills to become an international leader in its field.

Principal Operating Units: Power Group; Infrastructure Group; Process Group; Buildings Group; Development Group.

Further Reading:

• "Black & Veatch Buys into Europe," Process Engineering, June 1997, p. 10.
• "Black & Veatch Merges with Top British Consulting Firm," Water Briefing, May 17, 1995, p. 5.
• "Black & Veatch Prepares to Build Out PCS Market," RCR: Radio Communications Report, November 11, 1996, p. 13.
• "British Firm Merges with Black & Veatch," New York Times, May 9, 1995, p. 9C.
• "G.E. Wins Hotly-Contested $1.8bn Nuclear Contract," Power in Asia, June 10, 1996, p. 25.
• "General Electric Is Leading a Consortium That Won a $1.8 Bil Pact to Build 2 Nuclear Reactors at Taiwan's 'No. 4' Plant," Business Week, June 10, 1996, p. 56.
• "Thames Water in Disposal," Financial Times, October 3, 1996, p. 22.

Source: International Directory of Company Histories, Vol. 22. St. James Press, 1998.

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