Directional Drilling Contractor Builds Company by Building Strong Employees

Combination of hard work, employee-training protocols and investments in equipment bring growth for California’s J. Moraga Construction.

Directional Drilling Contractor Builds Company by Building Strong Employees
Jose Moraga, owner, J. Moraga Construction

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Jose Moraga has traveled far since he started his underground-construction and excavating business, J. Moraga Construction, in 2006 with just one truck and one employee: himself.

Yet despite operating as a one-man band, Moraga still managed to generate revenue of $1 million in his first year in business. And in 2017, after years of carving out a profitable niche by focusing on small- to medium-size directional-drilling projects, the company — based in Merced, California — reached nearly $9 million in sales. Moreover, it now employs 27 people and owns a fleet of equipment worth approximately $3.5 million.

“It’s pretty wild when you stop and think about it,” says Moraga, 46. His secret sauce? A strong emphasis on safety and customer service. Stringent employee-training protocols. Investments in productivity-enhancing technology — particularly Ditch Witch horizontal directional drilling (HDD) and hydroexcavating units. A willingness to tackle tough jobs. And a bit of a motivational chip on his shoulder from being teased as a young immigrant to America.

“My family moved to America from Mexico in 1980,” Moraga recalls. “I went straight to work in the fields picking apricots. I got teased a lot by other kids because I didn’t speak a lick of English when we moved here. It wasn’t easy, but you get up every morning and go at it. Now, I look back and I thank them for it. They drove me to achieve this.”


“This” turned out to be a 24-year career in the underground-construction industry. Moraga’s foray into the industry began in 1994 at age 22 when he responded to a want ad for construction workers at Can-Am Construction in California. He started as a laborer and followed a classic field worker-to-foreman-to-supervisor-to-project manager career path before being named a director, responsible for 900 employees.

But in a totally counterintuitive move, he left Can-Am Construction in 2006 to start his own business, even though he knew construction work was slowing down — a precursor to one of the worst economic downturns in American history. “My wife thought I was crazy,” he says. “I was making good money. But I always wanted to own my own company and wanted to do it while I was still young enough to rock ’n’ roll.

“I figured things would be more manageable if I started out during a slowdown and figured I could always get another job if things didn’t work out,” he adds. “I told myself that if there ever was a time to strike out on my own, this was it. The industry was slowing down so I could start out small. It’s hard to learn a business when it’s really busy, and I wanted to go in and do it right. If you go into an industry that’s booming, you get thrown into the fire very fast. Still, taking that first step and putting all my eggs in one basket was tough,” he notes.

Moraga’s bold move was aided by the many business contacts he’d developed after years in the industry. And he knew he’d made the right decision when his former employer went through a major reorganization in 2006, laying off many employees and selling numerous assets. In fact, while driving through Southern California, Moraga saw and purchased one of the company’s bright-orange trucks from a used-equipment outfit he passed along a highway. “They actually had three of my old company’s trucks, and I bought them all, one at a time,” Moraga says.

A key turning point occurred about two months after Moraga incorporated his business in 2006. A Southern California construction company heard he was “the rock-saw king,” cutting street pavement and then digging narrow trenches. The firm hired Moraga to do trenching for a couple miles of communication lines for a telecommunications company. “That marked my turnaround,” he says. “This was a big company. I had to go out and hire 30 guys for that job and ended up working as a subcontractor. It helped us get stable as far as consistent work goes. For the next five years, that company just kept feeding me work, every day.”


Today, excavating trenches for large telecommunications companies generates about 60 percent of the company’s revenue, while directional drilling accounts for the remainder. Most drilling jobs are between 500 to 800 feet long, on average.

Part of the company’s growth stemmed from its ability to complete difficult projects. One such job, completed in 2016, required drilling a 730-foot long 22-inch-diameter bore under Interstate 880 in Oakland. The bore was needed to carry four 6-inch-diameter steel conduits for telecommunications lines, Moraga says.

Not only was the bore long, it also had to go as deep as 52 feet and travel in an S-shaped curve to get around deeply sunk columns required to support an overpass. “We’re very proud of that job,” Moraga says. “You only get one chance on a bore like that. The easement was only 50 feet wide, so if we did it wrong, there wouldn’t be enough room to do it again without violating the easement.”

The job required more than two months of planning and “walking out,” he says. The actual drilling took about two weeks. Plotting the bore’s path required extreme precisions because the steel conduit can only bend so far before the welds holding it together snap. “Those welds had to be pretty dang good,” he notes. In addition, the project required blocking a road that had to remain open at night, so crews could only work from 9 a.m. to 4 p.m.

“I didn’t sleep very good for a while there,” Moraga says. “We had to hit that bore on the money — and we did. Mark one down for J. Moraga, baby.”


Of course, complex jobs require good equipment. The heart of the company’s fleet of machines is three horizontal directional boring machines made by Ditch Witch. The company also owns four FX60 trailer-mounted vacuum/hydroexcavating machines made by Ditch Witch, each equipped with an 800-gallon debris tank and a 300-gallon water tank.

Moraga says Mike Anderson, president of Ditch Witch, provided lenient purchasing terms for Ditch Witch machines — arrangements that helped J. Moraga Construction grow. “He told me go make some money and then pay me back,” Moraga recalls. “I paid the first one off in six months.”

The company also owns four mini-excavators and two skid-steers, all built by Bobcat; a John Deere backhoe; 11 Ford flatbed trucks (F-350s, F-450s and F-550s); four dump trucks featuring Ford F-650 chassis and 5-cubic-yard dump bodies made by Royal Truck Body; six tilt-bed trailers made by PJ Trailers; jackhammers made by Ingersoll Rand; locating machines manufactured by Subsite Electronics; and an asphalt-rolling machine made by BOMAG Americas. “We’re a turnkey company,” he says of the asphalt-rolling machine. “We do everything from start to finish.”


One of the biggest keys to success is the company’s emphasis on safety. “Someone told me years ago that if you operate a safe company, you have a successful company,” Moraga explains. “I don’t shortcut anything — there’s too much at stake.

“There are a lot of J. Moragas out there (companies the same size) that do things on a funky basis — do what they need to do in order to get jobs done — but I’m not going to put myself out there,” he continues. “It’s just not going to happen. No matter how much money someone offers to pay me, it’s not worth the risk.”

Moraga also says that a very structured and deliberate process for handling customers and projects has been critical to the company’s growth. “If the office operates correctly, the field operates correctly,” he explains. “It’s all about putting the right people in place here in the office.”

The company handles all jobs in a very systematic fashion, from first receiving a job and building files for it to arranging and tracking all preconstruction meetings, filing completed paperwork on time, and prompt invoicing. The bottom line: It’s too easy for details such as meetings with city inspectors to fall through the cracks. But they’re critical to completing projects on time, so a comprehensive and methodical system is essential, he notes.

“They have to look at the plans to make sure there aren’t any conflicts ... requires any parking or road closures,” Moraga says. “You’d be surprised at how many construction companies don’t set up a meeting to check on those things. They’d rather risk getting a slap on the hand. But we’re very methodical. The whole wheel has to happen. Then guess what — you get paid.”


For the time being, Moraga says he’s comfortable with the company’s current size. He points out that the company was slightly larger a couple of years ago in terms of work volume, but that made it difficult to find the right personnel to get jobs completed smoothly. The upshot? “We’d rather stay this size and be sure we can be successful,” he says. “We’ll go with what we’ve got — won’t stick our necks out too far.”

That may sound like an odd stance, given that the underground construction industry is booming right now, especially in San Francisco, San Jose, and Oakland where the company does most of its business. But Moraga says his experience with being responsible for 900 employees, coupled with his concern for customer relationships, keeps his ambitions in check.

“Sure, there’s a lot of work out there,” he acknowledges. “But it’s OK (to not go after all of it). We just want to do things right and keep things moving, just like when I first started out. My concept is a little different for us. Success is keeping our customers satisfied and our employees safe every day. More is not always better.”

Power, durability spur contractor to invest in Ditch Witch machines

Ask Jose Moraga, the owner of J. Moraga Construction, to pick his MVMs — Most Valuable Machines — and he answers without hesitation: the company’s three horizontal directional drilling machines built by Ditch Witch.

The units range in size from a smaller JT922 (with thrust and pullback force of 9,000 pounds and carriage thrust and pullback speeds of 188 fpm) up to a larger JT25 (27,000 pounds of thrust and pullback force and carriage thrust speed of 182 fpm and carriage pullback speed of 190 fpm).

“With those machines, we can cover everything, from little shots to bigger shots,” Moraga explains. “We can drill anything from 4-inch-diameter holes to 24-inch-diameter holes.”

Moraga already was familiar with Ditch Witch equipment from his prior job as both a project manager and director of underground operations for a large underground-construction company in Southern California. He also had established a strong business relationship with Ditch Witch executives, having already purchased numerous machines. As such, he was completely sold on Ditch Witch equipment, primarily for one reason: durability.

“You want something that lasts, not just gets the job done,” he says. “I love the fact that they don’t break down very often and they’re very easy to use. The newer technology is great — like the automatic rod installation, which is so much safer because you’re not installing the rods by hand.

“And with the new displays, the operator can see right where the rod is going — left or right, up or down — on a display.” he continues. “For example, you know that you’re 300 feet out and 10 feet deep and at a 2 percent grade. Before that, we used hand signals and walkie-talkies. Now, you can punch in GPS coordinates and the machine goes by itself.”

The machines’ onboard software also keeps a meticulous record of each bore that’s drilled and compiles a full report for customers. “A lot of people now want to have a record of what you did,” he explains. “The report will show an actual track of your line underground, where you went up and down and what utilities you crossed and where it exited.”   

For more on J. Moraga Construction, check out this video.


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