The National Service and Maintenance Agreement continues to be an excellent tool used by HVACR and plumbing service contractors around the country to grow market share and remain competitive in this highly competitive market. The current National Agreement is effective through July 31, 2020. The MSCA Labor Committee will be discussing potential changes or modifications with the UA later this year. Although we anticipate very few changes, we would appreciate your input or recommendations on terms and conditions which you feel may be helpful in expanding your service business. Please send all comments to firstname.lastname@example.org by December 6, 2019.
Commercial plumbing service offers a lot of benefits to contractors. Although it can be difficult to begin or optimize, it offers a lot of benefits including higher margins and reliable work flow. This roundtable is a one-day meeting intended for both established plumbing service operations and contractors interested in getting into plumbing service.
Located at the Loews Chicago O’Hare, it offers attendees the ability to fly in and out the same day or minimize the amount of time away from the operations.
In 2018, MCAA sponsored a JBKnowledge Construction Technology Report that surveyed over 2,800 professionals in the construction industry. In the newly released MCAA-Focused Report, the responses given by MCAA members were separated and compared to those of the rest of the construction industry.
While MCAA members are getting heavily involved in VDC and mobile technology, they are behind the rest of the industry when it comes to some aspects of R&D. As the report’s primary researcher, Liz Beechinor from JBKnowledge points out, “Our research is showing that the construction industry as a whole is behind on R&D spending compared to other industries, but when we take a look at MCAA members’ responses and compare that to the construction industry, they are even further behind. Fewer MCAA contractors have dedicated R&D budget and employees dedicated to R&D.”
According to a 2017 McKinsey Report, the construction industry as a whole spends less than 1% of their revenue on R&D. Compared to the auto industry, which spends 3.5%, and the aerospace industry, which spends 4.5%, this can seem relatively underfunded.
What is even more concerning is construction companies’ lack of any R&D budget. The 2018 MCAA-Focused Construction Technology Report showed that 56.8% of those surveyed had no budget for R&D, while 63.5% of MCAA members reported that they didn’t budget for R&D.
The same could be said for having employees dedicated to R&D. In the last few years, we have seen more MCAA and MSCA contractors dedicate manpower to technology research and implementation, but on average, they are still behind the rest of the industry.
Most respondents that identified as MCAA members reported that they had one or two people dedicated to R&D, while 37% do not have employees dedicated to R&D. During a presentation on the topic at MCAA19, MCAA’s Director, Construction Technology Sean McGuire explained, “While we are seeing more members take technology seriously, smaller companies are going to always be more limited on budget and manpower that they can dedicate towards research and implementation. Larger GCs and CMs can absorb these costs a little easier simply as a function of their size.”
Being bigger does not necessarily mean better though. As Sean notes, “While research and staff budgets can be absorbed by larger companies easier, the bigger you are, the harder implementation becomes. Small companies can adopt changes a lot faster because you can get less people pulling in the same direction faster. Large companies have to dedicate more resources to implementation and follow up.”
This lines up with another report question that asked what the most limiting factor was for adopting new technology. Not surprisingly, lack of staff and budget received the highest response rates and were concerns for nearly half of the MCAA respondents. The report provides further insight into these questions as well as BIM productivity and estimation and mobile device and hardware use.
MCAA has released its latest report in its Technology Research Series, focusing on BIM Workstation Configurations. With the integration of Virtual Design and Construction (VDC) into our business, the computer workstations required to run BIM software need to be faster, stronger and more durable, but most executives do not have the computer science degree necessary to fully understand our needs. The MCAA Technology Committee teamed up with JBKnowledge to help MCAA members better understand the needs and value of BIM Workstations.
Put simply, underperforming computers cost MCAA members money. Excessive processing times not only lead to long periods of idleness, but also slow down the design, coordination and communication of projects. This reduces the productivity of some of the most highly paid workers in the company.
This report guides member companies’ IT staff or fractional IT support through the process of performing benchmark tests. It also provides guidance in making hardware purchases.
The latest Construction Technology Report, released this week by JBKnowledge and sponsored by MCAA, revealed new trends for the industry. The survey goes in depth on spending, software use and processes that contractors are taking advantage of.
One notable trend identified involves R&D and having dedicated staff and direction to research new technology. The survey quotes one participant, “We’ve established a Chief Innovation Officer role who oversees R&D and quality. We R&D new products, materials and technology using existing staff (vs. full-time), but we do have a process for identifying and assessing materials & tech.”
MCAA has also seen a rise in the R&D focused staff among its members with a new role emerging called a Construction Technologist, or ConTech for short. Sessions are planned to discuss this at both the upcoming Construction Technology Conference in January and the MCAA Annual Convention in March.
New products can bring change to the industry. This happens in one of two ways – evolutionary or revolutionary. Sometimes it is easy to spot the difference. A new feature in software that can make the user interface easier is an evolutionary design. It makes the next incremental step in the process and while adding value and productivity, does so in a small way.
Revolutionary products can bring exponential change to the industry. These are products that create new processes that eliminate old ones. An example of a revolutionary change would be the robotic total station. Instead of tape measures and T-squares, total stations use BIM, control points and positioning lasers to accurately determine locations in a construction project today. New processes are used entirely, but huge productivity gains are made.
While most evolutionary products that move the process forward are beneficial, revolutionary products that can bring exponential productivity increases are celebrated. During the opening session of the MCAA Tech Conference, James Benham will present multiple products that can be classified as revolutionary. If there is one session that cannot be missed at the conference, it will be this one.
In order to showcase how these new products will impact MCAA members, James Benham will bring in the experts. This will include contractors that have beta tested them, research teams that have evaluated them and the developers themselves who will provide demonstrations of their purpose. Some of these new products will be available immediately, some later in the year, but all will have an impact on our industry.
To learn more or register for the conference, visit the MCAA Technology Conference Website.
Every year, new innovations help leading contractors get a little more effective, productive and profitable. Missing out will not put you out of business right away, but it will gradually widen the gap between your company and the leaders in the market. It is never too late to catch up. Be an innovator. The MCAA Technology Conference is the best resource for learning how members are using the latest tools, software, and processes to thrive in these changing times. Join us January 29 – February 1 in Tampa Bay, Florida at the MCAA Technology Conference.
Written by: Jonathan Marsh, CTO/Division Manager Virtual Design and Construction, William T. Spaeder Company
In my role as a Construction Technologist, I am often accused of hacking. As a result I have a great desire to better communicate what it means to “hack”, since there is a negative connotation tied to cybersecurity or even attacking with blunt force. Not that I don’t hack things—I do—but there is something outside of hacking that I consider artful use. If we’re talking about the Construction Technologist (Con Tech) we need to talk about the idea of hacking, but I think we need to separate what we are being forced to hack or modify and what we simply enhance, develop, or see potential in. The things we are enhancing or developing are really more about artful use.
Artful use is seeing the greater range of usefulness in an existing tool. For example, when watching someone use a paintbrush, artful use is understanding that that brush can be used to paint the wall or paint the Sistine Chapel. To paint the Sistine Chapel, you’ll likely have to hack the brush. Modifying it to your purpose by breaking it down, build it into other brushes with varying bristle lengths, and identify artists capable of seeing what to paint. I think that a big part of what it is to be a Con Tech is looking at someone painting a wall and seeing that potential artful use.
I see hacking as being a little different, and it may or may not include artful use. Hacking is making what you have work and it is definitely a big part of being an effective Con Tech. I think we are always looking for the missing tools in construction. By ‘missing tools’ I mean the specialized tools that are needed by the mechanical trades but do not exist or are not present on the jobsite. An easy way to find a missing tool is to look for something that’s not being used conventionally.
For example, if someone is using the screwdriver to pound a nail, the missing tool might look like a hammer, or nail gun, or adhesives. The point being that the screwdriver is a workaround, but not an artful use. We are not looking for a better potential use of a screwdriver. We are looking for an altogether missing tool.
These missing tools and artful uses are often easy to see on a job site or in the Fab shop. That’s why I think Con Techs should spend a considerable amount of time observing or possibly working with the craftsmen in the field looking for missing tools, materials, methods and potential artful use. Every time I step on a job site I look at what craftsmen do with their tools with an eye to unconventional uses. Some of the best ideas have grown out of watching people use their tools in some absurd way. That can communicate louder than words what is really needed.
Physically being on the jobsite is also important in finding the right people to work with. As we introduce new tools and technologies, we need to identify people that are likely to be able to use the tools and share our vision. Like the artist in the example above, the tool really is nothing without a hand to direct it and a vision to follow. When you’re on the jobsite look for those people that are using their tools in innovative ways, the people that are good at adaptation. They are surprisingly easy to find on most jobsites but are not always the foreman. Finding those people is vital because ultimately, they will become your developers and advocates. They also are the people that are going to tell you when it’s a fail. Pick people that can see what you are shooting for and that you respect enough to believe when they tell you it’s not working.
I really hope as the Con Tech takes on a more conventional role in the industry we can better define and communicate to the teams we work with what we are doing, and how they can take part. In that vein, what are areas where you see the biggest disconnect when communicating what you do to the rest of your teams? And are there simple terms or ideas that would help us clean up some of the muddy thinking about what we do?
Now is a great time to remind your fitters, plumbers, service technicians, and their supervisors about heat illnesses and how to prevent them. The heat illnesses we’re most concerned about include heat stroke, heat exhaustion, heat syncope, and heat cramps.
HEAT STROKE: The body loses its ability to sweat and can’t control its temperature. Heat stroke is a medical emergency.
HEAT EXHAUSTION: The body sweats away too much water and salt.
HEAT SYNCOPE: The body’s blood pressure becomes too low resulting in dizziness or fainting.
HEAT CRAMPS: The body experiences painful muscle spasms.
To help prevent heat illnesses:
- Provide training for all affected workers on heat illnesses and prevention methods.
- On extremely hot days, reduce the physical demands on your workers as much as possible.
- Work tasks that are particularly physically demanding should be performed early in the morning or later in the afternoon avoiding the hottest part of the day.
- Provide a constant supply of cold water.
- Encourage your workers to drink at least a full cup of cold water every 15 to 20 minutes throughout each day.
- Encourage your workers to avoid drinking alcohol, caffeine, and high sugar content drinks during periods of extremely hot temperatures.
- Allow frequent rest periods in cool shaded areas.
- Encourage your workers to wear light-weight, light-colored, loose-fitting clothing made of breathable fabrics that are also designed to filter out harmful UV rays.
- Keep a close watch on workers who are at higher risk for heat illnesses. For example, workers required to wear hot personal protective equipment, such as arc flash gear, welding gear, respirators, etc., and overweight workers may be at higher risk.
This summer, the PCA is beta testing a new seminar on Plumbing Service to its members. The Plumbing Service Roundtable is designed to be an efficient, one-day seminar that will allow attendees to be out of the office as little as possible.
The roundtable is scheduled for June 21st at the Hilton Chicago O’Hare, conveniently attached to the airport. With a program scheduled from 10:00 AM – 4:00 PM, attendees will have the ability to fly in and out the same day to maximize their time out of the office.
Sessions will primarily be led by contractors with the intention to open up dialog between attendees and share best practices. The curriculum will include content on recruiting, training, technology, inventory, sales and truck setup.
With this new session being a beta-test, registration will be limited to 35 attendees and a limit of only one attendee per company. It is also recommended that attendees already be engaged in plumbing service at some level in order to share their experiences.
Registration is open and available on a first-come, first-served basis. For more information, download the brochure or register online.
The MCAA-sponsored 2017 Construction Technology Report by JBKnowledge took an in-depth look at how the construction industry utilizes technology, software and IT. This week, MCAA released an “MCAA Focused” Report that analyzed the responses of MCAA and MSCA members. It looked at how MCAA members use and estimate BIM costs, track productivity, and emerging tech tools.
Part of the report focused on how MCAA members compare to the rest of the construction industry. It showed that MCAA members have a greater adoption of BIM and have higher use rates for BIM with especially with coordination and fabrication.
The MCAA focused report also explored how MCAA members are tracking BIM hours and estimating their costs. It found that far too many contractors do not track their BIM hours per project and as a result cannot use those hours to estimate the amount of time needed to perform BIM on a project.
The report also looked at emerging trends that contractors are currently testing. While the industry at large favors drones by a wide margin, MCAA members are far ahead of the industry on fabrication and modularization.
What was once thought of as science fiction or construction fantasy is starting to make its way on to construction job sites. In late 2016, Microsoft released developer editions of their mixed reality headset, called the HoloLens. It represented the first time that a big tech company had offered a stand-alone headset that could overlay holograms in the real world that would stay in place as you moved around and changed your perspective.
For the construction industry, it offers a new path towards design, collaboration and visualization. The HoloLens allows you to take BIM models and overlay them on job sites or in conference rooms. You can see how your designs exist in the spaces you are building in. It allows you to move around them to check for collisions, plan for installation and visualize in real-space the plans that were once only on paper.
In MCAA’s Technology Research Series seventh installment, the MCAA Technology Committee explored the capabilities and potential of the Microsoft HoloLens for mechanical, plumbing and service contractors. Over the course of a year, the committee tested and proved that these devices are not only capable of making contractors more efficient, they can be seen as an immediate differentiator to your competition.
The report looks at how the HoloLens can be used to perform common processes for contractors. While it offers some extraordinary potential for jobsite planning and marketing, some areas like service had a limited role. These limitations stemmed from a lack of software that was designed for tasks important for service work.
Software plays a very important role in the usefulness of the device. To their credit, Microsoft was very savvy in the rollout of their new product. Right from the beginning, they partnered with leading software developers from multiple industry sectors to create apps designed for the HoloLens. This allowed for access to software applications for a lot of targeted applications, even during the roll-out of their developer editions.
Thankfully, one of the companies they partnered with was Trimble. Through Microsoft’s collaboration, Trimble developed tools for the construction industry to visualize construction models in real space. In the past year, more software developers have created solutions for the construction industry. The committee evaluated these apps in the report and made recommendations for software depending on the workflows that you intend to use the HoloLens for.
Software available today make it possible to pull BIM models into the device and visualize with extremely little training. They also offer capabilities in workflows that are not available on any other device. For contractors that are already working with BIM, this is another tool to increase efficiency and productivity.
The MCAA Research Report goes through five workflows to test the effectiveness of the device. In some cases, although a HoloLens could be used to perform a task, it was not the most efficient way of doing it. For other tasks it presented options and efficiencies that simply were not available using any other tool.
The HoloLens has proven to be an effective tool ready for the industry, the question is, how can your company ready to benefit from its use. To learn more, download the report and watch for updates. Software is in development by leading industry manufacturers that should push the capability of the HoloLens even further. The report is available to MCAA and MSCA members as a complimentary benefit of membership. With the release of new applications scheduled for the HoloLens, the report will be updated throughout the year.
During the negotiation process of the Tax Cuts and Jobs Act at the end of 2017, the tax credit for R&D spending was temporarily removed. Fortunately, MCAA and others worked hard to ensure that the final bill re-inserted the language for the Research Tax Credit (“RTC”) and made changes that potentially increase the credit by more than 20%. With the RTC in place, contractors are able to continue to claim tax credits for qualifying BIM and design work. Unfortunately, many mechanical and plumbing contractors are unaware that they can even claim part of their design and bid work for these tax credits.
This article is intended to offer an overview of the Research Tax Credit for mechanical contracting personnel presented in general non-tax terms, wherever possible. The credit is, however, “tax based”, and as such, the inclusion of all of the applicable rules for every situation is not possible in a brief discussion.
In order to qualify for the research tax credit, activities must pass several tests. Although these tests are fairly specific, “qualifying activities” are generally much broader than many people think. When contractors hear the term “research” they often associate the term with scientists wearing white lab coats who are mixing chemicals in beakers. However, the Internal Revenue Code definition of research, as defined under IRC §41, is much broader than this traditional definition. As a result, many contractors may typically associate a large portion of their research activities as “routine” or “ordinary”, when in fact many of these activities might qualify for the Research Tax Credit.
To successfully build a structure, there may be experimentation or an iterative process on technical design issues and the installation process to properly build it. Although it might seem complicated if you are not claiming these credits, many contractors have been doing so for years. Before you begin, it is recommended that MCAA members contact their tax professionals to ensure that they are properly claiming the appropriate costs and activities under the RTC.
To begin, the Internal Revenue Code states that the activities “must be intended to discover information to eliminate technical uncertainty concerning the capability or method for developing or improving a product or process, or the appropriateness of the product design”. The Code also requires a “process of experimentation” involving the evaluation of alternatives, confirmation of hypotheses through trial and error, testing and/or modeling (this can include iterative steps in evaluating design alternatives, alpha/beta tests, pilot trials, scale-up testing, marketing/field tests directly associated with the R&D efforts, qualification Trials, etc.). Finally, wages, supplies, and contracts associated with qualifying activities qualify. The expenditures can also be either capital or expensed items.
Broadly, this includes any activity where there is some technical uncertainty involved in the development or improvement efforts- i.e., is there a technical problem that needs to be solved before you can effectively launch/implement this equipment design, software, product, process, prototype, etc.? Personnel who are directly engaged in resolving the technical issues will qualify and those individuals who have a support role will also qualify (i.e., performing alpha/beta/unit testing, collecting data or writing programs to collect data, supervision, technical project management, etc.)
Uncertainty exists if the information available to the contractor does not establish the capability or method for developing or improving the product/process or the appropriate design of the product/process. The required level of uncertainty may be established in instances where your work requires the resolution of technical issues when either designing the mechanical and plumbing system or working from a set of drawings that are incomplete or need modification to function.
The definition of activities that qualify for the credit is fairly broad and the driver for the effort can be to produce a new, better or more competitive product/process, to increase reliability/quality, to increase general product/process safety, to respond to new federal/state requirements, to reduce costs or increase speed/efficiency, etc. Furthermore, the success or the degree of technological advancement is not a factor.
Below is a representative sample of activities a taxpayer would typically perform, which often times are misclassified as “routine” or “non R&D” related:
- Evolutionary advancements to the functionality, performance, reliability or quality of an existing product (Change orders for process improvement);
- Development of prototypes or models to prove out conceptual ideas (Including BIM);
- Experimentation to verify if an existing construction technique or process can support a new product with differing characteristics (Testing point loads);
- Experimentation to verify if a new or existing construction technique or process can be implemented in a new or different geographic region, new environment, or different industry/application;
- The design and development of custom equipment, tooling, molds and/or dies;
- The development of microcode used within machinery or robotics;
- The redesign of an existing construction or building process to improve efficiencies, increase safety or reduce operating expense;
- Testing to prove out the use of new materials in existing products;
- Plant and/or Process scale-up activities;
- Qualifying “Bid and Proposal” efforts; and
- The development of custom software that is either intended to be used internally or sold, leased or licensed to third parties as a commercial product offering.
However, simply because some items may be new, unique, customized or involve special problems does not mean that they will automatically qualify for a credit. For instance, there may be options or choices in regard the application of standard engineering techniques, but no uncertainty in regard to the resolution of a technical issue facing the project team. Qualifying activities that are intended to resolve technical uncertainties should also involve some iterative type of testing, experimentation, the consideration of alternatives, trial and error evaluations, prototyping, validation, etc.
Thus, although no qualifying activity might occur for most HVAC systems (even where custom designs are involved), technical uncertainty might arise on mechanical engineering and/or design efforts in instances where there are unusual requirements involving, for example: complex temperature, humidity, pressure, ambient air ratio range controls with differing protocols for numerous chambers/rooms; the need to design for particulate and/or chemical fume control/mitigation where the chemistry might require special construction materials; unusual space limitations, local regulations, cost mandates, etc.; instances where numerous alternative methodologies for technical solutions are necessary; development of technical alternatives to address repeated system failures; etc.
The PATH Act of 2015 made the Research Tax Credit permanent but also broadened the impact of the credit for many small to mid-sized businesses. Starting January 1, 2016, small businesses that meet certain criteria can also use the Research Tax Credit to offset the FICA employer portion of payroll tax, with a credit cap of $250,000 for each eligible year.
– – –
Mike Foley is the Managing Partner at Foley & Smith, LLC, a firm specializes in Research Tax Credits.
Mike D’Allesandro is the Managing Director at Research Tax Credits, LLC
For the third consecutive year, MCAA has sponsored the JBKnowledge Construction Technology Report, offering MCAA members salient insight on the technology habits of today’s contractors. On Tuesday, January 30, James Benham, CEO of JBKnowledge will present a live webinar showcasing the reports findings and providing further insight to its data.
This webinar will be provided as a free benefit to MCAA member. The report is already available for download in advance of the webinar.
JBKnowledge released the year-end Construction Technology Report. Sponsored by MCAA, the survey interviewed nearly 2,700 construction professionals across the industry to research technology, processes, spending and R&D. Not all of the reports’ findings were intuitive. While trends on BIM adaption and mobile devices continued to rise, the number of different applications contractors are using declined. The most surprising finding came from type of software contractors have recently replaced and implemented.
This year, the report specifically asked which workflow software contractors most recently implemented. Nearly 26% of respondents indicated that they had most recently updated their accounting software. Considering the impact on business and the intensity of the training, this is a very surprising result. The report also indicates that part of the reason for the trend was the correlation to new ERP software, indicating that smaller companies maturing into ERP systems could have accounted for a portion of the results.
Two other trends that are important for our industry involved prefabrication and BIM. The two concepts are intertwined as many MCAA members begin using BIM to improve their fabrication productivity and capabilities. Prefabrication use has risen over 12% from 2016 (19.9% total in 2017) making it the second highest trend that all contractors are experimenting with. For MCAA members interested in learning more about maximizing their fabrication operations, register for the 2017 Fabrication Conference on January 15.
In 2017, contractors are becoming more confident in maximizing their BIM capabilities. More companies are reporting that they now have BIM/VDC departments of more than two people. Kelly Doyle, JBK’s SVP of Consulting summarized it, “Based on the responses, the breakpoint for a full VDC team is about $20 million in total revenue. This is similar to the breakpoint for IT departments as well. Once contractors hit that revenue volume, their overhead has the capacity to add more full time staff to productivity improvements.”
A startling trend however is that even with the increased adaption to BIM, 28% of the respondents still said that they do not bid on BIM projects. 52% of respondents have some in-house BIM capability and roughly 20% simply outsource the process.
This fifth webinar in the MSCA original series, Plumbing Service 101, Operations Part 1, will explore the key personnel and organizational structure required to establish, sell, and grow a viable plumbing services division.
There are many similarities between HVACR and plumbing operations. While some of a company’s existing resources can be shared, others are unique to plumbing. Failing to take these exclusive requirements into consideration can spell disaster. This webinar will explore the key personnel and organizational structure required to establish, sell, and grow a viable plumbing services division.
The webinar is scheduled for February 8th at 1:00 pm EST, sign up today!
Plumbing manufacturers have made great efforts to remove as much lead as possible to comply with regulations established under the Safe Drinking Water Act. In order to meet these requirements, most manufacturers have used brass alloys containing small amounts of silicon or bismuth to improve machability. In the following years, most plumbers learned how to effectively make joints with the new alloys, but sometimes it is not apparent how complete the fill is in joints unless they are tested.
A recently released NCPWB technical bulletin demonstrated how joints that appear to be correctly soldered could often be frayed. The bulletin’s author, Walt Sperko, provided examples of incorrect joints and guidance. Pre-heating the tube more than the casting is critical for no lead copper alloys. This is because casting’s thermal conductivity is much lower than copper.
When the plumber does not spend enough time on heating the tube, the solder has a tendency to only partially fill the joint. While silicon-based alloys were found to be more difficult to wet properly, both proved insufficient with poor technique.
NCPWB members can also download the Soldering Procedure Specification resource SPS-107-1 to better understand the welding procedures for brass and lead-free alloys.
Are you planning to solder in a couple of dozen 1-1/2 inch brass control valves in that heating system you are installing in that high-rise building? Brass valves, of course, are castings and all the castings you buy today are lead-free. Does your journeyman who can solder a wrought 1-1/2 inch copper coupling with ease make the same quality joint when one side is a heavy-wall cast valve body? How about if the castings you bought are alloyed with silicon for machinability improvement rather than with bismuth?