An Interview With: Jim Bognet and Jeff Kaiser

St. Patricks Day of 1998 was a lucky one for Jim Bognet and Jeff Kaiser; that’s when they resigned from their jobs at The Leapley Company to start Bognet Construction—which has since grown to over 40 employees and revenues exceeding $36 million a year. They say their logo is green to commemorate that date.

Bognet grew up in coal mining country in Pennsylvania, but his father was a plumbing contractor, then a general contractor. “I went on weekend jobs with my little toolbox when I was 7 years old,” Jim says. Eventually he spent summers as a laborer, estimator, and operator of heavy equipment, then studied mechanical engineering at Penn State (class of ’88). One of his professors was an ex-Hyman VP who got him an interview in DC with Tiber Construction, then affiliated with Tompkins. In the process of doing project management for them at Ballston Plaza, an Oliver Carr project, Carr offered him a job as a landlord construction manager in 1991. Later he went to Leapley, where he was promoted to GM of the DC office and met Jeff Kaiser, who worked in estimating. The two left together to co-found Bognet. (And since they seem so much on the same wavelength still, we have not identified them separately as speakers in this interview!)

Things were going well for you guys in 1998. Why would you be so foolish to start your own company?The market was very strong, and we were working with a lot of clients. We wanted to do more with our careers and had a real passion for construction. We had some great relationships with customers and believed we could do it on our own. We were careful not to take any specific, existing projects away from Leapley, but we thought if we had our own company we could get new business from them and others.

Why did you think that? We were doing a lot of work for AOL at Leapley, such as the interior of their building on Westwood Center drive, behind Moore Cadillac, before they moved out to Loudoun. Then, when they moved to Loudon, we did that work, too. Their new building was about 175,000 square feet, which we gutted and re-built in just four months—five months if you count moving in the furniture. Also we had each spent between 10 and 20 years in the Washington market and saw the growth coming with companies like AOL, General Dynamics, Northrop and many of the dot com firms. We believed it was the right time to go on our own.

You were out there with Steve Case? Saw him a lot. Always dressed in jeans.

Hmm, you’re in construction. How do you dress? Actually, I look at my Blackberry every morning to see where I’m going, and I try to fit in. As a compromise, I sometimes wear khakis and a golf shirt, but most of the time we’re in ties.

How did you make the final jump to your own firm? For two or three months we would meet for dinner to talk about it, sometimes at Murphy’s Irish bar across from the Shoreham, sometimes at Kilroy’s in Annandale. Finally, we went into talk to Dennis Leapley. At the end of the discussion he wished us luck and said, “When you make it big you owe me around of golf.”

Have you paid up? Not yet. He moved to Atlanta.

How’d you get your first projects? We were invited by AOL to bid on various ones in July and August, and that gave us 30% of our work the first year and a lot of service work over the next couple years. But we realized we needed more than AOL, so we used our existing relationships to get other projects: Lincoln Property Co., BF Saul, Scheer Partners, and on the tenant side General Dynamics, Chemonics, and Northrop. And we became a certified LSDBE and Union contractor.

Did you just keep growing the size of individual projects? Yes, and Chemonics would be an example of that. It’s an international consulting firm. When we started with them, we were doing small tenant and service jobs, maybe 2000 to 5000 square feet. We’ve done 20 projects for them over last six years, but this year they decided to consolidate into 150,000 square feet on five floors at 1717 H Street. We couldn’t start demolition until July 1, and they want to finish by October. So on that first day, a Saturday, we manned the job with 100 people, and by July 15 we were framing walls for the build out. As of today, we’ve painted two of the floors, and have the drywall complete on all five.

And it’s not just Chemonics? Same with General Dynamics, where we were renovating 20,000 square feet a while back, and we have since completed 50,000 square foot and 100,000 square foot projects. And back in 2001, when we had only been in business three years, Cafritz Company asked us to renovate the old Secret Service building at 1310 L Street, so we got a $10 million project to complete an entire base building renovation which included a new façade as well as a new building core infrastructure.

What’s your style of operating? We love the fast pace, we see ourselves continuing to grow, and we’re involved in every project. We attend project meetings on biweekly basis, and we try hard to keep a close relationship with clients. They know we’ll either be at the meetings or are just a phone call away. We don’t want to get too corporate.

What’s the biggest challenge? Don’t grow too fast. Get proper people in place. Like everyone, we’ve had some growing pains and not all employees work out. We’re only as good as our employees. That’s the biggest challenge in this market. Finding experienced project managers and superintendents. They’re hard to find because the market is so strong. Now that the residential market is slowing down, we’re getting a lot of resumes, but that’s a whole different culture. Often they know the technical skills but not all the means and methods. For example, they may know lumber construction, but we do everything with metal studs. On the other hand, we have a couple of superintendents who came from the residential side, we trained them, and they’re doing well. You also have to keep good relationships with the subs. There are only so many skilled tradesmen out there, and we’re all pulling from the same pool, so you really have to take care of them.

In what way? Make sure you’re processing their payments, and that you’re scheduling them on your job when you need them, not wasting their time. Subcontractors want to work for the companies who are helping them make the most money.

Are you amazed to see where you are today? Yes, in how fast we’ve grown. But no, in terms of what we do. We both came from construction backgrounds. Jeff was from Bethesda and his father was an architectural engineer for Sport Fisheries and Wildlife, and Jeff worked summers as a carpenter. My father was a general contractor. We didn’t go into construction just because it looked like a good market, or it was some whim. It’s in our blood. :)