An interview with PEG member Kent Danforth, Director of Procurement, S&B Engineers & Constructors
Give us some background on The Procurement Executive Group, better known as PEG.
We just had our 25th anniversary, so we've been around for quite a while. PEG is a group of men and women who are executives from procurement from various engineering, procurement and construction (EPC) companies across the country—quite a few of them from the Houston area. We get together twice a year and talk about things that are working and things that are not working.
What strikes me is that all of the EPCs in this group are basically competitors, and it's interesting to me to see how this group does such a great job of collaborating with one another.
We have a common purpose to understand what’s new in the industry and what we can do to better in the field of EPC procurement. We're not giving away company information, instead we’re looking at the industry as a whole.
What are some of the things that have come out of PEG?
PEG brings in an economist to talk to us twice a year to share market trends. This gives us a little more information that we may not be privy to from let's say the Washington side of things on what's happening globally and what's happening nationwide. We can then make some decisions on what kind of work may be coming, as well as factors that would affect the bidding process overall, like where we think the price of steel pipe will be and in the price of equipment nationwide by buy zone.
How do you use this information?
As a company, if we know prices are going up or prices are going down, we can adjust how we bid work. For instance, the market price for housing and automobiles—believe it or not— transitions downstream for the EPC world.
I'm no economist, but here’s my view: If housing is up, interest rates may be down. People have a few extra dollars to spend. They're buying more vehicles. They need more fuel, so that could mean increased demand for refinery capacity.
Can you give me some insight as to how a company such as S&B makes the decision to bid on a project? What factors come into play?
For S&B, a lot of the factors come into play and a lot of it has to do with risk. You never want to step into an arena that you're not comfortable with. We do a real good job of bidding good work for us that we think fits into our plethora of things we do well.
You know we're a construction company at the end of the day—engineering and construction with the “p” for procurement in the middle and the services that go with that. We have to make sound decisions to make sure that we're bidding work to keep people working, make a little bit of money and feel comfortable doing it with high quality and safety.
How will the PEG panel be organized at Breakbulk Americas and what topics will you cover?
Randy Detinger from Kiewit will moderate the panel. I’ll be talking about the midstream market and energy exports, Carl Newton from Wood will cover renewable energy, and Raj Desai will share PEG’s logistics insights and market forecast.
We have to express to people just how important logistics and the supply chain are to the industry. You can engineer a great product, but if you don't get it from point A to point B, it's a problem. So, we want to explain a little bit about how we operate and other companies will do the same.
Who is PEG?
The Procurement Executives Group (PEG) provides a forum to identify and address procurement related issues which will improve the effectiveness of the engineering and construction industry.
Established in 1994 the Procurement Executive Group has been recognized as an industry authority on procurement, materials management and subcontracting topics. PEG is actively involved in supporting research efforts related to these topics with Construction Industry Institute (CII), CAPS research, and other industry organizations.
Visit peg-eci.org for more information.
RELATED SESSION AT BREAKBULK AMERICAS
Project Cargo Market Outlook from the Procurement Executive Group (PEG)
Wednesday, October 9
11:00 am – 12:15 pm
Breakbulk Main Stage
Moderator: Randy Dentinger, Senior Procurement Manager, Kiewit
Kent Danforth, Director of Procurement, S&B Engineers & Constructors
Raj Desai, Sr. Vice President & Chief Commercial Strategist, Fluor
Carl Newton, Vice President Supply Chain, Wood