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

By Judy Schriener

Szabo

ContractorHub.com, a construction e-business site that went down the tubes this past January, has come back from the dead. Istvan "Steve" Szabo, the co-founder of software maker WinEstimator Inc., Kent, Wash., has formed a company called Cost Core Technologies LLC, which has purchased ContractorHub's name, Web address, technology and customer list. But even though the look is the same as that of the old ContractorHub, Szabo is taking a completely different approach to the site from that of its previous owners.

Szabo says that ContractorHub initially will be primarily a facilitator for users of WinEst software rather than a stand-alone e-procurement site. He also wants to partner with other software makers that want to add Web-based procurement to their array of services. Plus, he may also make the technology available for other users.

Szabo and Karim Khoury, co-founder of the original ContractorHub site, declined to reveal specifics of the assets acquisition. Khoury and partner Darryl Lewis have formed Technology Consolidators, a consultancy. Szabo says theTechnology Consolidators firm is providing consulting services for his new firm. ContractorHub is in the process of setting up offices and hiring staff, Szabo says. "I'm funding it myself—so far," he says. He is in negotiations with other software companies to be potential partners, and hopes to announce three or four alliances by the end of June. He also is looking for "one major partner...with cash" to join him.

Las Vegas-based e-business technology firm PurchasePro was supposed to create a "skin portal" for WinEst—using PurchasePro's technology on WinEst's site—but PurchasePro's recent financial and managerial woes came along just as they were in the negotiation process, so Szabo began looking at ContractorHub, he says. He is not sure where things stand with PurchasePro, he adds.

WinEst is an estimating software firm that Szabo started in 1992. He remains a major stockholder, as well as president and CEO. The firm sells estimating software suites in 45 countries, and has a German version that instantaneously translates back and forth between English and German, generates reports on the fly in either language with any database (metric or inches, different currencies, etc.). WinEst currently employs 23 people. The new 6.0 version of WinEstimator will have the properties to seamlessly link from the estimating software to ContractorHub.com, Szabo says. "People familiar with the (WinEst) software will be able to do most of the work in the software they are familiar with," he adds.

"Our model [of ContractorHub] is quite different from the original model," Szabo says. "We're going to market the services to our customers and make it available to large customers or companies that want the technology." He wanted to keep the name because "they spent about $7 million to make it familiar to everybody. It's a recognized trade name."

Szabo says, "We are not counting on [standalone] customers," as did the original ContractorHub. "We are counting on WinEst customers to come and sign up." WinEst has about 7,000 current customers. Szabo is hoping that the majority of WinEst users will sign up for the e-procurement service, plus about 400 or 500 new ones per year. He also hopes that many of the 1,500 customers who registered on the old site—about 17 of which were actually doing transactions through the site—will sign up again.

The service costs buyers (contractors) a membership fee of $125/month. Sellers pay a transaction fee of between .5% and 1%, depending on the amount of the transaction. Szabo hopes that ContractorHub will be profitable within the first year, hopefully near the end of the year.

Szabo sees competitors of the new ContractorHub.com now as fellow software companies such as Timberline Software Corp., Beaverton, Ore., and MC², Memphis, rather than Internet procurement sites such as BuildPoint.com, a partner of the McGraw-Hill Construction Information Group, parent of construction.com.

ContractorHub was in the process of developing its version 2 when it went under. The current site is still version 1, says Szabo. "Version 2 is in different stages of development and completion. We're trying to use the expertise they have developed." Khoury and Lewis are helping Szabo move the site into Version 2. Szabo also wants to add.

Khoury thinks the new ContractorHub has a good chance of succeeding. He has always been convinced that the e-procurement service was essential, even if it is taking people awhile to come around to using it. And he is happy that half of the buyers-and-sellers population necessary for an e-procurement community—in this case the buyers—will be ready-made from WinEst's customer base. "We're just glad that ContractorHub.com has survived," he adds.

Photo courtesy of WinEstimator Inc.

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