Category: Managing Your Business

Register Today for Coffee with Koontz Episode 3: Multiple Offices, Common Culture: Talent Needs Challenge

Episode 3: Multiple Offices, Common Culture: Talent Needs Challenge
Friday, June 12 at 2:00 p.m. EDT

Everyone wants to work with great talent. And those who have built their businesses around it know that talent thrives on challenge. This week, John will chat with current MCAA President Brian Helm (CEO, the Helm Group) about one way to provide opportunity for challenge: expansion. Join Brian and John as they discuss balancing the growth of a business with the importance of maintaining company culture, across both departmental and geographical divides.

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Register for Coffee with Koontz Episode 2: This Project Is On Fire!

Episode 2: This Project Is On Fire!
Friday, June 5 at 2:00 p.m. EDT

Have you ever had a nightmare project that just won’t end? Join John as he chats with his old friend from the City of Angels, Shaabini Alford (VP of Southern California Operations, Murray Company) about the practices and pitfalls of “crisis” project management. Tune in to hear Shaabini’s advice and lessons learned about surviving horrible projects, based on her ongoing real-life experience!

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Register for Coffee with Koontz Episode 1: Finding and Keeping Talent, and The Advent of Remote Work

Episode 1: Finding and Keeping Talent, and The Advent of Remote Work
Friday, May 29 at 2:00 p.m. EDT

All the way from beautiful balmy Buffalo NY, Robert Beck (CEO of J.W. Danforth Company) joins the show as our very first guest! Among the many changes brought about by COVID-19 is the normalization of working from home. John and Robert will discuss how this may permanently impact the way we work, how we find and keep our talent, and will explore the idea of adapting to balance remote work with a traditional office environment.

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Register for Coffee with Koontz and guests, Robert Beck and Shaabini Alford

Join host John Koontz on Friday afternoons, as he welcomes a different guest each week to talk about what’s new and interesting in the world of Mechanical Contracting. Sit back and learn how industry leaders are innovating and adapting to challenges, enjoy a laugh or two, and meet members of the MCAA community from all across the country.

Episode 1: Finding and Keeping Talent, and The Advent of Remote Work
Friday, May 29 at 2:00 p.m. EDT

All the way from beautiful balmy Buffalo NY, Robert Beck (CEO of J.W. Danforth Company) joins the show as our very first guest! Among the many changes brought about by COVID-19 is the normalization of working from home. John and Robert will discuss how this may permanently impact the way we work, how we find and keep our talent, and will explore the idea of adapting to balance remote work with a traditional office environment.

Episode 2: This Project Is On Fire!
Friday, June 5 at 2:00 p.m. EDT

Have you ever had a nightmare project that just won’t end? Join John as he chats with his old friend from the City of Angels, Shaabini Alford (VP of Southern California Operations, Murray Company) about the practices and pitfalls of “crisis” project management. Tune in to hear Shaabini’s advice and lessons learned about surviving horrible projects, based on her ongoing real-life experience!

REGISTER TODAY

New MCAA Change Order Publication Update Provides Valuable Guidance During COVID Crisis

MCAA members can now download the 2020 edition of MCAA’s Change Orders, Productivity, Overtime—A Primer for the Construction Industry. The revamped resource provides guidance to contractors that are looking to measure the impact that delays, PPE and manpower limitations have on the construction sites that they are working on. The guide helps contractors identify and quantify activities before and after the start of the pandemic in order to build change orders correctly.

As the guide’s lead author, Paul L. Stynchcomb, CCM, PSP, CFCC of Vero Construction Consultants Corp. puts it, “One way that you are going to have to address this issue is measuring time impacts. So the starting point is to measure any schedule time impacts as of the commencement of the impacts of the pandemic on your project site. That means you need to identify any pre-existing delay conditions.”

As an additional resource, Paul Stynchcomb was joined by Douglas Patin and William Ibbs from the Ibbs Consulting Group on April 15, 2020 to address the Construction Management Consequences of the Coronavirus and Legal Responses. MCAA members can review the webinar for free at any time.

New Chapter Highlights Benefits of Sharing Native CPM Schedule Files

As some of the most labor-intensive trades on any project, mechanical, plumbing, electrical and sheet metal contractors are intently interested in project planning, activity sequencing, timing of the work and efficient crew flows. In a new chapter for the 2020 edition of MCAA’s Change Orders, Productivity, Overtime—A Primer for the Construction Industry, lead author Paul L. Stynchcomb, CCM, PSP, CFCC of Vero Construction Consultants Corp. discusses the essential concept of sharing the critical path method (CPM) schedule in its native form between all of the major trades on a construction project as a tool for enhancing cooperation, profitability and timeliness.

Only the prime or construction manager’s CPM schedule for the entire project scope of work provides the full picture that will enable these contractors to deliver projects to the benefit of all parties, Stynchcomb posits. He notes that printouts, bar chart graphics and PDF files of the CPM schedule are a poor substitute since they provide only a snapshot of the plan at a specific point in time.

Shared access to the native CPM schedule files adds transparency to the construction management and scheduling process, which is key to effectiveness on today’s complex and challenging construction projects. In most cases, projects that have a cooperative and interactive management style are more profitable and timely, and efficiently, completed. This means bottom line benefits for all involved.

Lawrence M. Prosen, Esquire of Kilpatrick Townsend & Stockton, LLP provided the case citations and some general commentary contained in some sections of the chapter.

Peer Reviewers Add Industry Expertise

This latest chapter, like the others in the publication, was peer reviewed by a panel of industry professionals. Peer review was performed by Robert Beck, President/CEO of John W. Danforth Company in Tonawanda, NY; Rick Freeman, Executive Vice President, Southern Insulation, Inc. in Hyattsville, MD; Brian Helm, President of The Helm Group in Freeport, IL; and Denis St. Pierre, Executive Vice President & COO of Alterman in Austin, TX.

Endorsing/Supporting Organizations

The publication’s full contents have once again received the endorsements of the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA) and the National Electrical Contractors Association (NECA).

The American Subcontractors Association (ASA) has also renewed its full support for the contents of this publication as applicable to their particular trades.

Other Topics Addressed

In addition to the new chapter, the publication assists labor intensive contractors and subcontractors in concepts of proactive project management such as CPM scheduling, labor planning and productivity tracking, change management and settlement negotiations, dispute resolution, claims avoidance and, if necessary, claims preparation and presentation.

The object of this publication is to sensitize construction professionals of all trades to enable the early identification of obstacles to a successful project, and to proactively manage such obstacles to mitigate or eliminate their impact to the bottom line, to the benefit of all of the project participants.

MCAA Members – Download Your Free Copy!

MCAA members can download the publication free as a benefit of membership. Printed books are also available for purchase at a discounted rate.

If you have questions about the book, contact Adrienne Breedlove.

Advanced Leadership Institute Course 20 Now Accepting Applications

MCAA is currently accepting applications for its flagship executive education program, the Advanced Leadership Institute. Designed specifically for mechanical contracting executives, the ALI is focused on developing the talents and business networks of leaders in the industry.

The intensive, team-oriented, two-week residential program includes lecture, individual coaching sessions, and the development and presentation of final a team project.

The ALI is offered annually at Babson College in Wellesley, MA. The dates for ALI Course 20 are September 13-17, 2020 and November 1-6, 2020.

The application process is competitive, and applicants must provide the endorsement of their CEO/President. While the deadline is May 29, 2020, the course fills up quickly, so early submission is recommended.

For additional program details and application criteria, download the application form.

With New Tax Legislation, MCAA Contractors are Still Able to Claim R&D Tax Credits for BIM and Design

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.

 

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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

 

 

Your Business is the Best…Tell the World!

Your business provides the highest quality mechanical, service and plumbing services to all commercial establishments in your market area…but are you getting the word out? With help from MCAA’s Management Methods Bulletins, your company could be the first one called when a project or service is needed.

Public Relations: An Important Marketing Tool for the Mechanical Contractor offers a wide variety of ideas to help you reach out to existing and potential customers about the range of services your company provides. Direct advertising ideas range from television and radio ads to fliers, circulars and newspaper inserts. Your involvement in the community through civic groups, sponsorships of special events and contributions to local charities increases your company’s name recognition and broadens your prospects for new business.

Social media has added to the possible avenues for business marketing.  Facebook, Twitter, LinkedIn, YouTube and others have become popular venues for advertising because they reach a huge audience. Guidelines to Using Social Media in Your Business helps you sort out the best options for your company and issues you should consider when choosing them.

Another tried and true way to connect with your customers is with a newsletter.  A well-written and designed company newsletter keeps your customers—old and new—up to date on project developments, changes to your services, staff, equipment and much more. Creating a Readable Corporate Newsletter provides valuable tips on how to produce an attractive, informative publication that your customers will want to read.

Less tangible but equally important marketing tips suggest ways for you and your staff to promote your company’s name as a service- and people-oriented business. Listening to Our Customers and Why Mechanical Contractors Should Furnish Equipment will help you build your company’s positive reputation and spread the word about its “customer first” culture.

These and many more valuable Management Methods Bulletins, designed to help your company address and overcome a myriad of business challenges, are available for download at no charge as an MCAA member benefit.

And, for complete information about branding, advertising and how to design your own promotions, take a look at Guide Marketing Your Business. It’s also available as a free download to MCAA members.

Looking for Another Management Methods Bulletin?

You can find them on our Management Methods Bulletins page. There, you’ll find the bulletins listed by category with links to help you get what you need quickly.

GO THERE NOW

Or, find them in the Resource Center, where you can use the blue Refine Your Search bar to pinpoint exactly what you’re looking for.

VISIT THE RESOURCE CENTER

Need Help Managing Your Business Finances? Check Out These Bulletins!

Staying on top of your company’s finances can be challenging, especially during periods of economic volatility. With that in mind, MCAA’s Management Methods Committee produced bulletins that address the most critical accounting and financial issues facing your business.

The bulletins cover a wide range of topics from general guidelines—Tips to Help Contractors Manage Through an Economic Downturn, Guide to Financial Statements and Credit Policy Criteria—to more specific issues, such as Cash FlowService Mark-ups vs. Construction Mark-ups and Other Direct Job Costs (ODJC’s) and Indirect Job Costs. Each bulletin provides detailed, current information that will not only help you keep your finances in balance but may also streamline your company’s accounting processes and improve your business relationships with your customers, project associates and equipment suppliers.

Want to See All of the Management Methods Bulletins?

You can find them on our Management Methods Bulletins page, where they’re listed by category with links.

GO THERE NOW

Or in the Resource Center, where you can use the blue Refine Your Search bar to pinpoint exactly what you’re looking for.

VISIT THE RESOURCE CENTER

Get Your Copy of the New Tool and Equipment Rental Guide

MCAA has released the 2016-2017 edition of its Tool and Equipment Rental Guide. The guide puts the latest comprehensive cost recovery information for commonly used tools and equipment at your fingertips. The single download includes both a PDF version and an Excel spreadsheet. The guide is free as a member benefit.

The rental rates are based on ownership and operating costs for contractor-owned equipment and are derived from formulas and data developed by the experts at EquipmentWatch and from analytic methods used in the construction industry.

Generally, these methods consider the purchase price, depreciation, maintenance and overhaul costs, indirect equipment costs and average annual use hours.

Profit, project overhead and general company overhead costs such as office facilities and supplies are not included in the rates.

Download your copy here.

It’s Not too Late to Find an Intern, and Get a Grant

MCAA_GREAT_FUTURESIf you are considering hiring an intern for this summer and you haven’t yet lined up candidates, go to MCAA’s website, MCAAGreatFutures.org.

Over 200 resumes of well-qualified students from across the U.S. and Canada are posted and they’re eager to work for a mechanical, mechanical service or plumbing contractor to learn the business.

And, once you’ve hired someone, you can apply for a Student Internship Grant from the Mechanical Contracting Education & Research Foundation (MCERF). The grants are $1,200 each and you may apply for up two grants (if you hire two interns).

View Resumes

Apply for a Grant