That strategy worked well for Underground Eyes, an Alabama outfit that revitalized its revenues by narrowing its focus on a more profitable niche market and simultaneously establishing a mutually beneficial relationship with another local contractor. 

Based in West Blocton, Alabama, about 45 miles southwest of Birmingham, Underground Eyes switched gears about two years ago, shifting from inspecting and cleaning large mainline sewers to inspecting and cleaning much smaller residential lateral lines. The move was bolstered by a close working relationship with the lateral lining division of BLD Services, a municipal infrastructure and heavy construction firm based in Kenner, Louisiana. 

The result? About a 110 percent increase in gross revenues since 2013, says Ron Robichaux, project manager for Underground Eyes. About 80 percent of the company’s work centers on laterals; the rest comes from video inspections of mainline sewers to ensure installations/pipe relinings were performed correctly. About 70 percent of the company’s lateral work revolves around inspections, with the balance coming from post-inspection cleanings, he says. 

“There was a lot more competition in mainline work and not many contractors cleaning and cameraing laterals,” Robichaux says, explaining the company’s switch to a new market. “With more contractors bidding on mainline jobs, our margins were getting squeezed. We still got our fair share of work, but there wasn’t as much opportunity for growth. Our sales became stagnant.” 

Another factor in the company’s growth: The growing realization among municipalities that aging, leaking laterals are responsible for much of the inflow and infiltration problems that plague their sewers.

Informal partnership

Underground Eyes and BLD weren’t strangers before the two companies started working together more closely; the owners of Underground Eyes, Donna Jo and Jerry Deerman, occasionally worked as a subcontractor for BLD when mainline projects were the company’s primary focus. Right around the time that Underground Eyes decided to make a market U-turn, Robichaux — who joined the company at that juncture — recognized an opportunity to dovetail services with BLD. 

“I talked to them and suggested that maybe we could help by doing all the prep work on laterals so all BLD had to do was concentrate on lining them,” Robichaux explains. “They invested in crews to install liners in laterals, but were using the same guys to do the prepping and the cleaning, and there’s not as much money in the prepping and cleaning work as there is in installations. 

“I figured that we could save them the time and energy of prepping, which, in turn, would allow them to make more money by focusing on higher-margin installation work — that’s how we started off. Now they’re one of our biggest customers. About 50 percent of our work comes from working as a subcontractor for BLD.

“I wouldn’t say it’s an unusual arrangement — every contractor has favorite subs that they like to use,” he adds. “I’m sure there are other guys doing the same thing, and I know that BLD uses other guys, too. But they sure keep us busy.” 

Why didn’t Underground Eyes just start doing lateral lining and grab a bigger piece of the local revenue pie? Two things: the high cost of market entry and the special set of skills required, says Robichaux. “We did not want to get into the lining business. It requires a considerable investment and the required skill set is tenfold more [than inspections/cleanings].” 

BLD initially was cautious about Robichaux’s proposal because the firm had tried an informal arrangement before and it didn’t work out very well. But both parties agreed to give it a try on one job and take it from there. “We started out with one camera truck and now have five,” Robichaux points out. “We wouldn’t have five trucks without this relationship. They’re a big part of our success.”

Changing equipment needs

Of course, a business makeover isn’t cheap, especially when it requires entirely different equipment. Robichaux estimates that the company has invested approximately $2 million in five camera trucks (built on Ford and International chassis) and five water jetters made by the Sewer Equipment Co. of America. 

Four of the camera trucks are equipped with IBAK LISY lateral-launch tractors made by RapidView. Each tractor carries a RapidView Orion-L lateral inspection camera. The remaining truck carries a LETS 2165 tractor-mounted lateral-launch camera, manufactured by Aries Industries Inc. 

The trailer-mounted water jetters feature dual hose reels that carry 800 feet of 3/4-inch hose and 800 feet of 1/2-inch hose, a 98 hp CAT engine, a 650-gallon water tank and a pump (40 gpm at 3,000 psi) made by F. E. Myers (owned by Pentair Ltd.). The company also depends on two different kinds of nozzles: StoneAge Warthogs, which are used to remove small roots and heavy grease, and Turbo chain-cutters made by USB Sewer Equipment Corp., used to remove larger roots.

“We had to get into tractors with lateral launches and smaller jetters that used smaller nozzles,” Robichaux says of the transition from one market to another. “And we also had to learn how to launch those lateral cameras … it’s a much more specialized inspection.” 

Technicians received training from manufacturers at the Water & Wastewater Equipment, Treatment & Transport Show and through demonstrations at manufacturers’ headquarters. 

Underground Eyes now runs two-man crews, with a back-end operator working outside the truck and a superintendent running the robot and recording inspection information from inside the truck. After a lateral is inspected, whoever hired Underground Eyes or BLD decides if the line needs just a cleaning or lining/repair. Underground Eyes typically inspects the lateral from the mainline to the transition point, where the 6-inch-diameter pipes that tie into the mainline meet the 4-inch-diameter pipes that run to the homes. 

“A lot of times, there’s a clean-out at the transition, right on the property line, and we inspect up to that point,” Robichaux explains. “Other times we inspect the line all the way to the house.”

Keys to success

Robichaux says staying abreast of new technology and keeping employees properly trained and certified have been critical to the company’s success. “We’re always willing to try cutting-edge equipment — new nozzles and cameras, for example. If a company introduces a new product that can save us money and make it easier for our employees, I’m willing to buy it and try it. 

“We also have great employees — people who do their jobs and do them right,” he adds. “We keep them trained and educated about what’s going on in the market.” 

Because more and more customers require it, technicians are required to obtain pipeline and lateral assessment certifications, which cost about $700 per employee and must be renewed every three years. “But it’s well worth the money,” Robichaux says. 

Looking ahead, Robichaux envisions more growth for Underground Eyes, though he prefers slower growth to avoid overextending company finances and resources. “We have enough work to keep adding [camera] trucks,” he says. “But if we run into bad weather, then we have a lot of trucks sitting around. It would be different if all our work was in the South. We don’t want to overgrow — I’d rather be so busy that the guys are working more hours than normal before we can justify adding another truck. 

“But the outlook is very good,” he adds. “Municipalities are spending more money on lateral rehabilitation. Cities are seeing that it makes a big difference in terms of reducing I&I.”