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Every industry has a way to describe the size of its businesses. Some industries use informal classifications like 'boutique' or 'large', while others use official ratings exclusive to the particular field. The construction industry has a specific rating system of 'tiers', with tier 1 being the top rung in the ladder, followed by tier 2 and 3.
What do these tiers mean?
Essentially, a builder's tier rating comes down to its capacity to take on a project. Size, resources, experience and money all play a part in defining the types of project a company can take on, and therefore the tier the company is rated in. Companies can move up the tiers as they grow in size and capability.
Tier 1
There a only five tier 1 companies in the building industry in Australia. These are capable and well funded; Leighton Contractors, Theiss, John Holland, Baulderstone, Abigroup.
Example: John Holland's Enoggera Barracks Enhanced Land Force (ELF) Infrastructure. John Holland was contracted for the $1.4 billion construction of the ELF Stage 2 infrastructure at Enoggera Barracks. The development is expected to take over four years and will increase the Barracks' capacity for two more infantry battle groups. Because of their expertise and resources, John Holland was able to take on this large project that would be unsuitable for a tier 2 or tier 3 company.
Tier 2
Tier 2 companies, the middle size companies in the industries, don't have enough funds and experience for the Tier 1 constructions but still do some big builds.
Example: Hutchinson Builders' Victoria Towers construction. Hutchinson builders undertook the $82.4 million construction of Victoria Towers, which was completed in April 2011. The 35-storey tower provided aged care, over-50s residential apartments, and a range of facilities including car parks, pools and a gymnasium. This is a typical example of a tier 2 project, which are usually in the $10 million to $100 million range and include work in the retail and industrial sectors.
Tier 3
These building companies are still big businesses and do take on projects around the million dollar range. There are many of these companies in this sector and all have the opportunity to gain experience and build up their businesses to work their way up the tiers. One example of such work is Brisbane City Council's Teneriffe Ferry Terminal.
What do these tiers mean?
Essentially, a builder's tier rating comes down to its capacity to take on a project. Size, resources, experience and money all play a part in defining the types of project a company can take on, and therefore the tier the company is rated in. Companies can move up the tiers as they grow in size and capability.
Tier 1
There a only five tier 1 companies in the building industry in Australia. These are capable and well funded; Leighton Contractors, Theiss, John Holland, Baulderstone, Abigroup.
Example: John Holland's Enoggera Barracks Enhanced Land Force (ELF) Infrastructure. John Holland was contracted for the $1.4 billion construction of the ELF Stage 2 infrastructure at Enoggera Barracks. The development is expected to take over four years and will increase the Barracks' capacity for two more infantry battle groups. Because of their expertise and resources, John Holland was able to take on this large project that would be unsuitable for a tier 2 or tier 3 company.
Tier 2
Tier 2 companies, the middle size companies in the industries, don't have enough funds and experience for the Tier 1 constructions but still do some big builds.
Example: Hutchinson Builders' Victoria Towers construction. Hutchinson builders undertook the $82.4 million construction of Victoria Towers, which was completed in April 2011. The 35-storey tower provided aged care, over-50s residential apartments, and a range of facilities including car parks, pools and a gymnasium. This is a typical example of a tier 2 project, which are usually in the $10 million to $100 million range and include work in the retail and industrial sectors.
Tier 3
These building companies are still big businesses and do take on projects around the million dollar range. There are many of these companies in this sector and all have the opportunity to gain experience and build up their businesses to work their way up the tiers. One example of such work is Brisbane City Council's Teneriffe Ferry Terminal.
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