Category: Construction Technology Inititiative

Report Shows MCAA Members Don’t Invest Enough in Tech Budget and Manpower

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.

BIM Workstations Are Expensive, But Report Shows Investing in the Right System Can Be Valuable

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.

PHC News Names J.C. Cannistraro Contractor of the Year

Congratulations to everyone at J.C. Cannistraro, LLC for being named PHC News magazine’s Contractor of the Year! The company, which is a member of MCAA and the New England MCA, was selected for its reputation as a leader in modular prefabrication and a very early adopter of construction technology.

Mechanical Inc. Featured at Autodesk’s Connect & Construct Summit

Each year, as part of Autodesk’s annual education conference, Autodesk University, there is an optional session the first day that is geared towards the AEC industry called Connect & Construct. It features Autodesk’s corporate leaders like the new Autodesk President and CEO Andrew Anagnost talking about products designed for the construction industry as well as some of the industry’s leading innovators.

One such innovator featured this year was Travis Voss, Mechanical Inc’s Director of Technology.  Mr. Voss was part of the keynote address that included Dr. Peter Diamandis, a recent speaker at the MSCA Conference and MCAA Convention, and Lorien Barlow, the Documentary filmmaker behind a movie titled, Hard Hatted Woman.

During his keynote address, Travis spoke about Mechanical Inc.’s path to technology leadership, what his role as a Construction Technologist means and how collaboration and cooperation with other MCAA members through the Technology Committee has helped their company.

The video is available through Autodesk’s Online University through this link. Travis begins his presentation at the 45 minute mark.

Travis Voss will also be speaking at the MCAA Technology Conference in Tampa Bay, Florida on January 30- February 1.  His presentation will be part of a session titled, Next Generation Workflows, in which he will demonstrate how Mechanical Inc. has begun using augmented reality on the job site.

How Are Field Leaders Reacting to Technology?

Whenever a new process, tool or technology is introduced to a company, there is always concern about how it will be used by the people in the field every day. At the Indianapolis Field Leaders Conference, UA Director of Training Chris Haslinger made a presentation about construction technology. His presentation included a survey which yielded some very interesting results from 175 end users.

A balance must always be made in technology training. You don’t want to spend so much time on the training process that it keeps people from doing their jobs. You also want to make sure that people understand how to use it and follow up with added training if required. The good news from these results is that it seems like most field users are getting the right amount of time, regardless of the duration, and very few respondents appear to be getting new technology handed to them with little time to practice with it.

The next question focused more on the tools needed to use new technology on the job site. As mobile devices are frequently seen as required tools by foreman and field supervisors, the need for internet connectivity has risen significantly.

Two thirds of field leaders answered that it is not only very important, but almost all of the time. This speaks to how essential communication and data flow is becoming between the field and the office. Today, field employees are using their mobile devices for more processes and a good internet connection is becoming a necessity. A poor internet connection slows down the processes and can waste field time. This makes usage of mobile devices counter-productive when the time it takes for files to load or transfer make it slower than other methods.

The usage of mobile devices is increasing. Much of this has to do with better software applications on the market and more companies making it part of the process. When asked which software applications they used most frequently, they responded:

  • 85% – Jobsite Documentation
  • 75% – Blueprint Rendering
  • 67% – Time Cards
  • 19% – Tool Management
  • 46% – Safety Related Purposes

This demonstrates heavy usage of applications across a diverse set of processes. With a higher rate of application usage, the industry is likely to modify its processes to compensate. The last survey focused on this issue.

The top two responses both involved improved communication. Coordination with other trades is a process that has a high need for improvement, but involves a process improvement for communication. The same could be said of delivery of blueprints, change orders and design documents – a process that can grind a project to a halt and add significant cost if not organized correctly.

Mobile devices and job site software have become normal for modern contractors. To keep up on technology impacting MCAA members, MCAA’s Technology Initiative will continue to provide research, articles and guidance.

New Report Looks at How MCAA Members Use Technology

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.

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

 

 

Webinar Offers the Latest in Tech Trends

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.

Construction Technology Report Reveals Interesting Insights

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.

On January 30, James Benham, the CEO of JBKnowledge joined Sean McGuire to present a webinar to MCAA members of findings from the study.  Watch the webinar below:

Last Chance to Register for MCAA’s Technology Conference

This week is your last chance to register for the MCAA Technology Conference. The conference provides insight on new tools, processes and software that even the most established contractors are having a hard time keeping up with.

This year’s event addresses challenges for your entire team. It was designed for all areas of your company that work with technology. General sessions are combined with in-depth breakout and roundtables to allow for a dive deep for specific users:

  • For BIM experts, we have sessions on keeping BIM costs in check, optimizing productivity and learning about the next generation of tools.
  • For service contractors, we have a full slate of breakout sessions on the hardware and software being used today by service contractors.
  • IT managers will find incredible insight from Nick Espinosa on cyber security threats from a hacker’s point of view. (Check out his video interview with BuiltWorlds)
  • Operations and management will learn how to sell technology to customers, hear about software designed for their use and understand what their IT team is asking them.

There are a lot of events each year, but this conference is the only one that is MEP focused with peers sharing ideas on the latest technology. Don’t miss this opportunity. Register now and I hope to see you in Austin this November 8-10.

MCAA Tech Conference Brings Big Ideas Down to Earth

Small ideas can make a big difference to your company. The MCAA Technology Conference is an event that doesn’t just provide a few small takeaways, but a wealth of ideas that can be applied across your business. Technology is providing so many new tools, processes and software that even the most established contractors are having a hard time keeping up. The MCAA Tech Conference is your crash course on the latest tech trends in the industry and how other contractors are taking advantage of them.

This year’s conference addresses challenges for your entire team. MCAA fields a lot of questions on who should attend. This conference is designed for all areas of your company that work with technology. General sessions are combined with in-depth breakouts and roundtables to dive deep for specific users:

  • For BIM experts, we have sessions on keeping BIM costs in check, optimizing productivity and learning about the next generation of tools.
  • For service contractors, we have a full slate of breakout sessions on the hardware and software being used today by service contractors.
  • IT managers will find incredible insight from Nick Espinosa on cyber security threats from a hacker’s point of view. (Check out his video interview with BuiltWorlds)
  • Operations and management will learn how to sell technology to customers, hear about software designed for their use and understand what their IT team is asking them.

MCAA and MSCA host many educational events each year, but this conference is the only one that is MEP-focused with peers sharing ideas on the latest technologies. Don’t miss this terrific learning opportunity. Register now!

Tech Conference to Feature White Hat Hacker

Hacking is becoming a big business these days.  It is not just limited to big companies like Equifax, Target and Home Depot, but small to medium sized businesses as well.  While most contractors do not store credit card data or store valuable information, they can be seen as the gateway to larger companies because of their access to their networks.

Recently, we interviewed Nick Espinosa, a “white-hat” hacker that specializes in finding weaknesses in companies’ computer networks and protecting them before criminals can exploit them.  Nick is a featured speaker for the MCAA Technology Conference in Austin, Texas this November 8-10. There he will share case studies of ways that hackers are sneaking in to companies and what they have done once inside.

Watch his interview to get a preview of his session at the Tech Conference.  If you are interested in attending, check out the conference website to learn more about all of the conference sessions that will help contractors compete in the new age of technology.

Do You Want to Start Your MCAA.org Experience on a Particular Page?

If you have an iPad or iPhone, it’s easy. Follow these simple steps to customize your MCAA.org experience by making, for example, our Safety Excellence Initiative or MSCA.org or any other page an app on your home screen!

  1. Open Safari and navigate to MCAA.org.
  2. Use the menu to find the page you use most often.
  3. Touch the “share” button in the Safari menu bar to see the options (it looks like a box with an upward arrow coming out of it).
  4. Check out the lowest row of options, and scroll until you see the plus sign icon “Add to Home Screen.”
  5. Select it and rename the page if you choose to something shorter, “Safety” or “MSCA”.
  6. And there you have it! Hit the home button to leave Safari and you should see the new “App” on your home screen.
  7. You can even make as many as you need. Calendar? Resource Center? NCPWB? Virtual Trade Show?

It’s that easy!

Are Tablets Replacing Phones on Jobsites?

Six years ago, when I looked at my friend’s brand new first generation iPad, I was skeptical.  I thought that this new tablet was going to be a big version of the iPhone that came out a year or two earlier. At that point, I still hadn’t bought into the usefulness of the iPhone that everyone was so crazy about and I was still plugging my way through a two-year contract on my existing “smart phone” from Verizon. I wasn’t about to pay a few hundred dollars to get out of my cell phone contract just to hop on this new fad.

iPadOriginalWhen he handed it to me to just try out, my skepticism vanished immediately. Unlike the touchscreen on my “smart phone”, it was responsive. I could touch and zoom and interact with a computer in ways that I could never do before. I could see the immediate potential. After getting my first iPad, I realized it could do about 85% of what my computer did in something that was drastically lighter and more portable.  It changed the way I worked.  I ditched the laptop when I traveled and always spent some time on the couch at night checking on work.

I also thought about how contractors could immediately find the benefit. This new device had the potential to extend computers to the jobsite like never before.  It would be able to store project files, drawings, and document conditions. Information from the office could reach the field and empower field supervisors.

It just couldn’t do it yet. In 2010, most field foremen, safety supervisors, and project managers were heavily reliant on cell phones and most didn’t have a smart phone yet. Some were still annoying their coworkers and family with the infamous Nextel chirp. It took some time for the software to catch up with the hardware potential of tablets, but we are far beyond that point now.

Six years later, mobile phones are more or less texting devices while tablets are able to do so much more. In a recently released research study, the research team from JB Knowledge took an extensive look at the software that has is connecting the office to the field.  They evaluated over 20 mobile tools that contractors are already using and put simply, the software that they looked at is doing things that was unimaginable six years ago.

In the companion webinar, the study’s lead researcher, Josh Bone, said, “We are entering a really exciting time here. Getting BIM in more hands and more people, and carrying that communication all the way out to the field is helping to democratize BIM.”

It is also changing the skillset and the mindset of field personnel. For many foremen, getting a tablet is almost considered a perk. It is not anywhere near a “buck and a truck”, but more like a prestige item. This is due to the design and positive perception created around the product. A lot of this has to do with Apple’s marketing and design efforts.  People begin loving their tablets even before they know how to use them.

What most field supervisors don’t realize is that a new tablet should be thought of as the latest tool.  It is a phone and computer all wrapped up in one with more features and potential than any power tool. Tablets hide the conceit of productivity in the glitz and polish of a new toy. When fully enabled, field supervisors can use tablets in ways that they could never use their phones.

Some of the software evaluated in the BIM to Field Research report unlocks the potential of mobile devices in ways that were never thought of six years ago with the first tablet came out. There are programs that can overlay BIM designs in an augmented reality.  Programs can track work in the fab shop.   Apps that can let field foremen reshuffle the fabrication queue. Software that can get the latest designs, revisions, RFI’s, specs, and labor hours to the field and back so that design and communication is two-ways without picking up a phone.

The days of the mobile phone on the jobsite are not over yet, but what is becoming clear is that their importance is diminishing. Today, if contractors had to choose between providing either mobile phones or tablets to their field supervisors, the choice is not as clear-cut as it used to be. One argument is that nobody would bring his or her personal tablet to the job site while everyone would bring their personal phone.  The other main argument is that making the investment in tablets has greater value right now.  With a six-month payback period, some contractors are choosing to deploy tablets while subsidizing personal phones.  They are making that choice because tablets can increase their productivity in ways that mobile phones just can’t.  In a few years, you might stop seeing phones on construction sites at all.  R.I.P. chirp.

Sean McGuire is the Director of Construction Technology at the Mechanical Contractors Association of America.  Follow him on twitter at @mcaageek for regular tech updates.

MCAA Geek

Related Resources:

Please check out the Research Report and our recorded webinar, free as a benefit of MCAA/MSCA membership.

MCAA Construction Technology Research Series Report on BIM Software

Companion webinar featuring Josh Bone, lead author of the report with JB Knowledge.

BuiltWorlds Recaps Highlights of MCAA Construction Technology Conference

Disruptive technology, robotics, drones, 3D printing, cloud computing and storage, BIM and much more were the hot topics at the MCAA Construction Technology Conference in June in Indianapolis. BuiltWorlds, MCAA’s technology partner that presented the exhibit of new construction devices and products at the conference, captured all the speakers and their presentations in a detailed article that not only described the technologies but also how contractors are using them in operations, such as fabrication shops, and projects to improve productivity, efficiency and profits. Read the article.

Did you Miss our Webinar on the BIM Software Analysis Report?

JBKnowledge’s latest research report in the MCAA Construction Technology Research Series – BIM Software Analysis – was featured in a webinar on June 23.

Josh Bone, the report’s principal author, led the webinar and offered insights into the study findings, explained the differences in the software tested and answered questions about BIM and virtual design and construction processes and systems.

If you missed this chance to learn more about the software available for these technologies and how they can help improve your business operations and projects, and you’re an MCAA or MSCA member, you can listen to the archived webinar as a benefit of membership.

You can listen to the webinar here and download the BIM Software Analysis Report here in our Resource Center. Questions about the study? Contact Sean McGuire.