Framaco International is a U.S.-based construction management and materials procurement services organization that specializes in providing turnkey construction services to the U.S. government. Established in New York in 1992, Framaco is a privately-owned company with offices in New York, Turkey, and Qatar. Business in Focus spoke with Paul Kacha about the extraordinary evolution of his company, some of the unique projects it has undertaken and the company’s future.
Framaco was founded by Paul Kacha and his brother Gilles, and they still run the company today. Originally, the company operated solely in the area of procurement and logistics, but over the years, the Kacha brothers have expanded it to provide construction management and design-build services, primarily on U.S. government contracts overseas.
Gilles and Paul came up with the idea of forming their business while Gilles was finishing his graduate studies at Harvard and Paul was working in a commercial bank. For the first twelve years of its existence, the company was focused on procuring construction material from U.S. manufacturers and selling to overseas contractors that required American-made materials because of the specifications provided by American designers.
“As an example, you take a Ritz Carleton being built in Jamaica. The products are U.S. specifications, so all materials would have to be procured from the U.S. Similarly, a U.S. Embassy project in any part of the world is based on U.S. specs, so the contractors would have to rely on resources such as Framaco to provide the following turnkey services: from engineering and shop drawings, which we do in-house; to submittals packages; to fabrication; and lastly, logistics. So Framaco proved to be a great resource to many leading contractors not to have to expand their own in-house departments, and yet depend on Framaco for the services I’ve described.”
Framaco was able to leverage the fact that most medium and large American manufacturers did not have export divisions, so it would find markets for the products overseas, creating a win-win situation for both the manufacturer and the contractor that needed the material resources.
“A lot of manufacturers in the U.S. do not have engineering and export resources, so they have embraced the relationship with Framaco with exporting their products from the U.S. overseas. Of course, the big Fortune 500 all have export departments, but when you look at small- to medium-sized manufacturers, they are focusing on their [domestic] market. So when they see a company like Framaco that is capable of exporting their product overseas, it was a huge plus for us.
“Our emphasis was on architectural materials. We were very reputable for our relationship with key manufacturers in the U.S. when it came to Division 8 complete doors, windows, curtain walls, hardware, etc. So we had established agreements with those factories, and every time there was a project, we were ‘protected,’ and ultimately became their international distributor,” says Kacha.
“We would package the whole solution for them, and ship it to their project sites. And that is the way Framaco became a leading procurement and logistics division to some of the top U.S. and international contractors around the globe; in the past five years we qualified and successfully completed materials procurement on some of the largest commercial construction projects in Qatar and the region, the size of these construction projects valued at over $10 billion,” says Kacha.
The next phase of the company’s development began in 2004 when it had accomplished a number of Overseas Building Operations (OBO) projects. The OBO is the U.S. Department of State’s (DOS) agency responsible for the construction of Embassies and Diplomatic Missions. OBO’s mission is to provide safe, secure, and functional facilities that represent the U.S. government to the host nation and support U.S. government staff in the achievement of U.S. foreign policy objectives.
Framaco had supplied dozens of projects for contractors working on OBO projects and had developed relationships with key people during the technical meetings at OBO, so people at the agency knew of Framaco’s reputation as a reliable resource. One of the most important milestone projects that put it on the map was obviously its work on the temporary U.S. Embassy in Baghdad. OBO invited Framaco in April 2004 to bid on a project to retrofit an old palace in Baghdad, formerly owned by Saddam Hussein.
“At that point, we had a fully-fledged engineering office in Ankara, Turkey, so we set up an operation and put together a bid for the design-build project for the interim U.S. embassy in Baghdad. We teamed up with a Turkish construction firm, and we bid on the job, and were awarded our first project. And that’s what launched the creation of the general construction management division of Framaco.”
The embassy was completed in nine months, and in 2005, Framaco received the U.S. Department of State’s Small Business Award for the Contractor of the Year. Following this, Framaco bid and won awards on several unclassified projects. However, in 2009, it received the security clearance to bid on classified projects for the U.S. government, and this further catapulted the company to success.
“After [the Baghdad embassy project] I decided to apply for secret clearance and was able to get it in 2008, and that allowed me to have secret clearance for the company, and in 2008 we started bidding on classified projects, so the second milestone was being awarded the U.S. embassy in Belgrade. That was a $125 million project. It was a design-build project, and that was a four-year project, and Framaco was the prime contractor.”
Obtaining clearance to bid on classified projects has been a boon. The number of companies that have such clearance are few, and Paul Kacha believes this clearance has been key to allowing the company to build a strong relationship with the U.S. government and obtain a constant workflow for the company.
“There are a limited amount of companies in that program; most of them are similar to Framaco, but I consider that we are different as our top management is very focused on the execution of the projects we are awarded by OBO. By focused, I mean that we try to offer our client a unique service in the sense that we specialize in the product that they are looking to build. I have a team here in my office that all have clearance, and they are fully dedicated to the [OBO] program. We don’t have an infrastructure division; we don’t have private construction projects; we only focus on the construction of U.S. embassies. So our construction division has remained concentrated on that program since 2004 in order to offer the best possible service to the client at the most reasonable price. And that motto has turned out to be a huge competitive advantage.
Another priority for Framaco is having the right staff for the job and investing in them. It has a process for recruiting talented workers who are interested in a career with the company and then ensuring that they have all the right training and orientation before they leave for an overseas job site.
“We offer them an on-boarding process that is uniquely customized. We love to bring them [to the New York office] before they mobilize, and they spend a month or whatever time is needed to get to know everyone here and then leave for their overseas assignment. And they can very easily communicate with headquarters when they need something, whether it’s technical, procurement, logistics or even personal—whatever it is.
“I just got out of a meeting with four staff who are thirty days into that on-boarding process and will be leaving in two weeks for a U.S. embassy project in Manila. They were so appreciative of the fact that they are able to come here and spend time to really get to know all the staff in New York and learn about the company’s internal procedures before they leave for that country. Whereas in their previous employment, they were just given a job and a visa to go overseas to work for three years without having that advantage. I’m telling you, this creates a team spirit that is different from all our competitors. Our turnover is very low because of the personal investment we make in our people,” says Kacha.
Framaco is currently managing several projects in excess of $250 million in value including a $136 million contract for the renovation and construction of the U.S. Embassy in Manila, Philippines. Additionally Framaco was recently awarded a $10 million project on the U.S. Consulate Compound in Johannesburg, South Africa, and a $104 million contract to construct the new U.S. Embassy in Port Moresby, Papua, New Guinea. This project is to be completed in 2019 and will consist of several new buildings designed by the architectural firm Karns Charuhas Chapman & Twohey (KCCT).
The company’s projects also provide value to the communities in which it works, particularly in providing valuable experience and training to engineers, laborers and other staff who are hired at the local project sites.
“Each time that Framaco wins a project, we must establish a branch in the country we will be constructing; we have to hire local people; we have to train them. We create a training center and on-boarding systems in each country. The project in Manila is an ideal example. We will need four to five hundred people working there, and sixty percent will be from the Philippines. So we will train these people. Although they are very well educated—very good engineers—they are very good craftsmen, but we will still go through an [on-boarding] process and make sure that the locals are capable of learning new skills required by the contract. And by the time we are finished with the project, they’ll get out on the market, and they will have acquired a unique skill, and they will most probably make more money than they have before they joined Framaco in their country. As a U.S. contractor building the embassy, we welcome and embrace the local people that come work with us on our projects.”
For the future, Framaco will continue to focus on projects for the U.S. government overseas and is planning strategic but steady growth.
“We are going to stick with what we know best, and Framaco will maintain its two divisions: the procurement and logistics division that has been the bread and butter of our existence and the division that performs the construction of U.S. embassies. We want to grow Framaco at a conservative pace that allows us to consistently win more projects. We are proud of the amazing portfolio we have accomplished and the bright future ahead of us.”