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(Source enr.com - Date 3/23/03)

By Judy Schriener

ContractorHub.com, an online buying and selling service for contractors and subcontractors, ceased operations last week after attempts to find a buyer failed. Karim Khoury, ContractorHub.com co-founder, president and CEO, says he hopes to sell the assets, which mainly consist of the well-documented, incomplete technology for Version 2 of the product and the research that went into its development.

An 11th-hour collapse of negotiations with a prospective buyer led to the closure, Khoury says. He deciined to name the potential acquirer, but Meridian Project Systems was one firm that had looked seriously at ContractorHub.com. What ultimately blew the deal in the last days was the fact that the potential buyer was looking for Version 2 to be 90% completed, whereas it's about 50% completed at this point, says Khoury. "We're a little behind schedule, and they decided they wouldn't take the risk," he says. "It's too bad they couldn't wait another couple of months."

ContractorHub.com's Web site remains open and functional for customers. The site maintains itself; there's very little maintenance required, claims Khoury. "We had whittled [customers]down over time to about 17 core users, and we addressed our situation with them," he adds. Unlike collaboration Web sites on which drawings and other data are stored, only transaction data is stored on ContractorHub.com. "Most customers have been printing out the documents anyway, so they have a record of everything," he adds. Employees-about 20 remained at closing-also were given what Khoury characterizes as the standard severance package. "Nobody got short-changed," he says.

In hindsight, Khoury says he would probably not do anything different, given the spend-spend-spend mentality of the times. "The mindset was that you had to go as fast and hard as you can if youw ant to go anywhere in this sector. If we knew what the financial markets were going to do, we would've all changed" our tactics," he says.

The legacy of Kirkland, WA-based ContractorHub.com is education and enlightenment of the industry, Khoury believes. "We've had a positive impact on the market…in terms of driving awareness of e-commerce and driving what it will become," he says.

Khoury and co-founder Darryl Lewis, who had been the firm's CFO, will probably be partners in a new consulting venture to be called Technology Consolidators. "We've identified another need: Midsize or smaller contractors don't know which technology to implement," says Khoury. Contractors tell him that superintendents and project managers are spending so much time on technology that they are not working on the construction projects. "We'll help get them back to work," he says.

Technology Consolidators also will create a series of seminars in cities throughout the country to educate and guide people in fairly small groups. "We remain unbiased…and we can tell them the way it is," he says. "I don't want to have people pay $40,000 to [co-sponsor] this [as is the case with many national seminars now]; if they can spend $2,000 or $5,000 or $10,000 and get a series of seminars across several cities, that's what we want to do."

Robert Tinstman, chairman of ContractorHub.com and former president and CEO of Morrison Knudsen, will not be joining Khoury and Lewis in their new venture, Khoury says.

ContractorHub.com was a head-to-head competitor with BuildPoint, another online bidding and procurement provider in which the McGraw-Hill Construction Information Group is an investor.

Khoury can be reached at tconsolidators@hotmail.com and on his cell phone at 425-971-8614.

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