Welcome New SMACNA Members Advanced Air Service Group, Aston, PennsylvaniaF.D. Ramsey & Co. Inc., La Porte, IndianaIndustrial Contracting & Engineering, Angola, IndianaPayne Mechanical Inc., Flushing, MichiganU.S. Engineering Service, LLC, Wichita, KansasYork Plumbing & Mechanical, Tulsa, Oklahoma
The Majority of SMACNAMembers Need a CTO Yet many companies still lack something critical: an executive dedicated to technology strategy.In most industries, that role is the Chief Technology Officer (CTO). The CTO ensures technology decisions align with business goals, but in construction the path to that seat looks different.In my experience, most construction technologists don’t come from big named MBA programs. They tend to start in VDC, BIM, estimating or project management, hands-on roles where they quietly shape the tech stack, usually attacking one problem at a time. They troubleshoot software, smooth workflows and help jobs run safer and more efficiently. Over time, someone notices: “You’re basically the CTO already.”These emerging leaders have succeeded not because of a business degree, but because they deeply understand industry workflows and where technology creates impact. Finance, budgeting and forecasting can be learned. What can’t be taught is the passion for building smarter. As one colleague put it, it’s easier to teach finance to a field-driven technologist than to teach construction to a business generalist.This role needs to evolve, and it is crucial that it grows beyond this stage. The informal “accidental technologist” model eventually breaks down. A BIM manager or project coordinator juggling tech decisions alongside other duties can’t drive long-term strategy. Adoption falters, implementations stall and opportunities are lost.Technology today is operational, not support. Choosing software and structuring data flows directly influences performance and profitability. Systems are interconnected: an ERP decision affects field operations; a fabrication tool influences estimating. Only a leader with a cross-functional view can make sustainable choices.As younger professionals enter the industry, they expect modern tools and efficient systems. Appointing a CTO signals that your company values innovation and is investing for the future. Not only is this important for operational success, but it also differentiates your company and becomes a strategic move.For technologists in the room aspiring to the role, the path starts with visibility. You must build your case. Map your digital workforce like an org chart: systems, contracts, training, support and innovation. Identify gaps and inefficiencies. Document wins, show ROI (even if I contend that they can be vague) and demonstrate how your work drives company-wide value. Don’t assume executives see it; prove it.Succession planning is another marker of readiness. If you’re wearing 12 hats, identify who will take over your day-to-day when you step into leadership. Build your case like a project: scope, budget, timeline and backfill. Then present the vision: “Here’s what we could accomplish if I had the authority to lead these changes.”A common pushback is, “You’re already acting like the CTO; why change anything?” The answer is simple: authority matters. It needs to be made official. Without the title, you lack the power to make decisions, establish policies or hold others accountable across departments. The company expects leadership without granting the mandate or support structure.When formalized, the CTO role unites departments, accelerates decisions and maximizes the value of digital investments. It’s not about a title; it’s about building a future-ready business.It’s important to remember that the best CTOs aren’t isolated in corner offices. They’re out with teams, listening, adjusting and ensuring the tech program works. Done right, the role becomes the athletic director of your digital ecosystem; coordinating coaches, players and equipment to keep everyone moving in the same direction. Travis Voss is the Director of Innovative Technology and Fabrication at SMACNA. He leverages his background in the tech field to explore, adapt and potentially develop technologies and workflows for the construction industry, particularly as it undergoes its digital transformation.
Construction Tax PlanningUnder the One Big Beautiful Bill The legislation introduces targeted opportunities to strengthen cash flow, accelerate growth and reinforce long-term financial strategy, especially with early and informed planning.While it does not resolve current industry headwinds, OBBBA introduces tools that can improve financial resilience. Many provisions extend or make permanent key incentives, including depreciation, deductions and rate structures.Bonus Depreciation and Section 179OBBBA permanently reinstates 100% bonus depreciation for qualifying property placed in service on or after Jan. 19, 2025, and expands Section 179 expensing to $2.5 million, with a phase-out beginning at $4 million. These deductions offer powerful incentives to preserve liquidity and reinvest in operations. Capitol-intensive businesses should: align capital investment schedules with property placement timelines, account for tariff-driven cost increases and analyze state-level conformity rules to avoid missed benefits. Construction Income RecognitionOBBBA now allows residential construction contracts to utilize an exempt method, deferring income recognition until substantially complete. Eligibility highlights: residential construction contracts automatically qualify,and other contracts may qualify if the contractor’s average annual gross receipts are under $31 million and the contract is expected to be completed within three years. Research and Development (R&D) Credits Some construction activities may qualify as R&D. For tax years beginning after Dec. 31, 2024, domestic research and development costs may be immediately deductible. Companies with average gross receipts of under $31 million may amend prior year returns for 2022 through 2024. Larger businesses may not amend prior year returns but may elect to accelerate unamortized costs in 2025 or split them over 2025–2026. Qualifying activities may include: design innovation, engineering refinement and material testing; prefabrication modeling or alternative waterproofing techniques; and process improvements with variable outcomes or technical uncertainty.Interest Expense DeductionOBBBA reinstates the EBITDA-based limitation under IRC §163(j), restoring the ability to include depreciation, depletion and amortization when calculating adjusted taxable income. Qualified Production Property (QPP) A 100% deduction is now available for Qualified Production Property (QPP), which is a nonresidential building used primarily for domestic manufacturing or fabrication. SALT Cap and PTET Relief OBBBA increases the federal SALT deduction cap to $40,000 for individuals who itemize and maintains the federal deductibility of taxes paid under elective Pass-Through Entity Tax (PTET) regimes.For contractors structured as partnerships or S corporations in high-tax states, this ensures continued access to valuable deductions. Strategic actions include reviewing current PTET election status, reassessing quarterly estimates considering updated caps and coordinating across entities and jurisdictions to maximize benefits. Estate and Gift Tax Planning OBBBA makes the $15 million individual ($30 million joint) estate and gift tax exemption permanent, with indexing beginning in 2026. While this provides federal certainty, state-level differences persist.Recommended planning moves:Reevaluate estate plans and ownership structure. Align gifting strategies with current valuations. Coordinate with counsel to address state-level nuances. Exemptions may be fixed, but market conditions and state law require regular review. For more information, contact Ronald J. Eagar, CPA, CCIFP Partner at Grassi, at reagar@grassiadvisors.com, through www.grassiadvisors.com or at 516-336-2460.
Fifth Circuit Finds NLRB Structure Likely Unconstitutional The Fifth Circuit concluded that the removal protections for NLRB Members and Administrative Law Judges (ALJs) likely violate the U.S. Constitution.The Fifth Circuit’s ruling does not shut down the NLRB. The decision is binding only in Louisiana, Mississippi and Texas — the states covered by the Fifth Circuit. But it marks another setback for the NLRB, which is already facing litigation over President Trump’s firing of NLRB Member Gwen Wilcox and is hampered by a lack of “quorum” that prevents the Board from taking official action.Removal Protections Likely Unconstitutional, Fifth Circuit SaysThe Fifth Circuit focused on how, under the NLRA, decision makers are shielded from termination by the President. Specifically, Board Members may be removed only “for cause,” and ALJs are doubly protected: they may be removed only for cause and only through another board.The court concluded that these removal protections for NLRB Members and ALJs likely violate the U.S. Constitution. It further held that being subjected to unconstitutional proceedings constitutes irreparable harm, granting the employers’ requests for an injunction to halt their NLRB proceedings.The NLRB is expected to appeal to the U.S. Supreme Court, which will ultimately decide whether the NLRA’s removal protections are constitutional.The NLRB’s “Quorum” CrisisAdding to the uncertainty, the NLRB currently lacks a quorum. According to a 2010 U.S. Supreme Court decision, the NLRB must have at least three members to exercise its authority. After President Trump fired NLRB Member Gwen Wilcox in February 2025, the Board was reduced to two members: David Prouty and Marvin Kaplan. Kaplan’s term expired on Aug. 27, leaving the NLRB with only one member. Without a quorum, the Board cannot issue decisions, leaving hundreds of cases in limbo.There is some hope that the quorum crisis may end. In July 2025, the White House nominated Scott Mayer, who is currently Chief Labor Counsel for Boeing Co., and James Murphy, a longtime NLRB attorney and counsel to multiple Republican members, to fill the vacancies. If confirmed by the Senate, the Board would have the three members needed for quorum. However, the Senate has not yet scheduled hearings on either nomination.States Attempt to Step into the FrayIn response to the NLRB’s paralysis, several states are moving to fill the gap by proposing “mini-NLRAs.”New York — Legislators in New York have passed Assembly Bill A8590/Senate Bill S8034A, which would empower the state’s Public Employment Relations Board to handle private-sector labor disputes when the NLRB cannot act. It has passed both houses and awaits Governor Kathy Hochul’s signature.California — Legislators in California are currently considering Assembly Bill 288, which would authorize the state’s Public Employment Relations Board (PERB) to handle private-sector labor disputes if the NLRB fails to act in a timely manner.These efforts may clash with federal law, which normally preempts state regulation of private-sector labor relations, but legislators say they are necessary backups.The NLRB Fires BackOn Aug. 15, Acting NLRB General Counsel William Cowen issued a memo warning that any state attempt to assert jurisdiction over matters governed by the NLRA would be preempted. The memo cited San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959), which held that states may not regulate conduct “that the NLRA protects, prohibits, or arguably protects or prohibits.” Cowen says legislation like that in New York and California “cannot be reconciled with the Supremacy Clause, found in Article VI, Clause 2 of the U.S. Constitution.” The message was clear: the NLRB intends to continue operating and defending its authority, despite the Fifth Circuit ruling and its current lack of quorum. Grant Collins is a specialist in labor and employment law at Felhaber Larson. Reach him at gcollins@felhaber.com.
ARCHITECTURAL: Crafting a Custom Vision in Steel Plan Architecture tapped Thompson Solutions Group (TSG) of Sioux City, Nebraska, to create the exterior of the new Lab and Students Center at the Winnebago Nation’s Little Priest Tribal College, about 30 minutes south of Sioux City. “We have a great relationship with Nathan Kalaher of Plan Architecture in Sioux City,” says James Olson, TSG’s Executive Vice President and SMC-Iowa Chapter President. “He’ll bring us into some of these projects early on to help select a product that’s going to hit his budget as well as be functional and give the look that he’s after.” This project incorporated a unique look that combined a wood-grained texture and prefinished steel. Olson relishes the creative opportunities of starting a project during the design phase. “It’s listening to the architect and figuring out how we can help create the vision that he has for this building, to make it look as beautiful as the initial renderings and bring it to life.” Thompson Solutions Group fabricated and installed 10,000 square feet of custom wall panels on this project.TSG keeps SMACNA Standards handy while making design decisions. “We use the Architectural Sheet Metal Manual often when we’re giving advice on how to build these and make them perform with the intent that the architect wants,” Olson says. “We reference the appropriate gauges and heights of these panels before we put in expansion joints so that they will perform and stay flat and not oil can.For the Lab and Students Center, Plan Architecture chose a one-of-a-kind look that translates a wood-grain texture into prefinished steel. “These are really unique materials that we’re working with,” Olson says. “We probably won’t ever use this color of material again. It’s going to be its own, unique project, and then we’ll move on to the next one.” A custom coil manufacturer printed the wood grain finish onto the steel, then TSG bought the steel from them and fabricated the panels in their Sioux City shop. “This was a product that we were able to fabricate in our own facility, without having to work with a major manufacturer,” Olson says. “We can coordinate that much, much faster and control the schedule, bringing it in at a lower price point than if we had been dealing with a national manufacturer for metal panels.”TSG hit an unplanned obstacle when the supplier took longer than expected to produce the custom coil. “It was a very detailed process to get it manufactured the way that the architect and owner wanted for the building,” Olson says. Multiple runs delayed the work by about six months. “We bid this project in July of 2023, and completed it March 1, 2025,” though the actual fabrication and installation only took about four weeks. “It compressed our schedule toward the end of the project, so we were finishing this up as they were looking to occupy the building. The biggest challenge was working in a compressed schedule to get this building open while still maintaining the quality. We never would have been able to hit the schedule had we not had total control of the fabrication.”Fortunately, TSG has the expertise they needed to meet their high standards while coping with delays. “Our architectural sheet metal crew is roughly 16 to 18 people, which is a good size for our area of the country, and our people have significant experience in doing this sort of work,” Olson says. “We get to an installation standpoint of maybe modifying a detail so that it can functionally work the way that the architect and owner wanted it to.” The shop foreman and the foreman who led the Little Priest Tribal College installation each have over 20 years of experience. “These specific foremen understand how to get these panels to perform, to be weather tight, and to be as flat as possible.” They used all the tricks of the trade and successfully aligned the panels from top to bottom across the three-story walls, as if they were actual boards.TSG fabricated and installed about 10,000 square feet of custom flush wall panels and trim for the three-story, 135,000 square foot building. The 22-gauge prefinished steel panels are 12 inches wide with V grooves at 4 inches and were printed with a Siamese Quarter Sawn wood grain pattern. The fabrication took two men about 300 hours in the shop, and on-site installation took a crew of four about 900 more hours, for a total of 1,200 work hours.
AI in Construction: Navigating Opportunities and Risks for SMACNA Contractors For SMACNA members, this technological shift presents both opportunities and challenges. As AI adoption accelerates across the industry, understanding its implications will be essential for growth and increasing margins, while keeping a firm grasp on the risks AI can present.The rapid emergence of AI technologies — from machine learning algorithms that optimize ductwork design to natural language processing systems that automate documentation, is beginning to fundamentally reshape how contractors bid, build and deliver projects. This transformation brings complexities that require thoughtful consideration and strategic planning.First, the OpportunitiesAI tools are accessible to anyone with a keyboard, and more and more people are getting used to using chatbots and other tools in their day to day. This fluency promises to spill over into the workplace, giving teams new tools and skillsets they can use to drive efficiency and control risk, as well as elevating the most critical skills by automating repetitive, time-wasting tasks.Here are some ways AI promises to improve the lives and work of contractors:Revolutionizing Document ManagementAI offers transformative benefits for document-heavy construction processes. AI technology can eliminate up to 90% of PO processing time while automatically identifying billing errors, which can save contractors 5% to 10% in material costs. For SMACNA contractors managing dozens, hundreds, even thousands of purchase orders, specifications, submittals and compliance documents, AI-powered systems can dramatically reduce administrative burden while improving accuracy.These systems go beyond simple automation. They can identify patterns in vendor pricing, flag unusual charges, and even predict potential supply chain disruptions based on historical data. Mitigating Field RisksAI’s predictive capabilities shine in field safety applications. Computer vision systems can monitor job sites 24/7, identifying safety violations that human supervisors might miss. These systems can detect workers without hard hats, identify improper ladder usage and even recognize fatigue patterns that precede accidents. Real-time alerts can enable immediate intervention, preventing injuries before they occur.Environmental monitoring represents another frontier. AI systems can continuously analyze air quality data during renovation projects, ensuring worker safety and regulatory compliance. They can predict when conditions might exceed exposure limits and automatically trigger ventilation adjustments or work stoppages.Productivity Gains That MatterConstruction professionals currently spend way too much of their time searching for information on projects. AI-powered search and retrieval systems can slash this waste, connecting workers with the exact specifications, drawings or procedures they need instantly. Natural language queries like “show me the rooftop unit specifications for the third floor” can instantly retrieve relevant documents from thousands of project files.Beyond search, AI enables entirely new workflows. Generative design tools can explore thousands of ductwork configurations overnight, optimizing for multiple parameters simultaneously, airflow efficiency, material usage, installation accessibility and cost. What once required weeks of manual iteration can now happen in hours, with AI presenting ranked options that meet all project constraints.Transforming RecruitmentAI is reshaping how contractors identify and attract talent in a tight labor market. Advanced algorithms can scan thousands of resumes to identify candidates with the specific certifications and experience SMACNA contractors need, from certified welders to TAB technicians. But the technology can go deeper, analyzing patterns to predict candidate success and cultural fit based on historical hiring data.Chatbots handle initial screening questions around the clock, ensuring no promising candidate is lost due to delayed response. They can answer questions about benefits, schedule preliminary interviews, and even conduct basic skills assessments. This frees HR teams to focus on high-value interactions with qualified candidates, improving both efficiency and candidate experience.Enabling Process InnovationPerhaps AI’s greatest promise lies in enabling entirely new ways of working. Machine-learning algorithms analyzing historical project data can identify patterns that predict delays or cost overruns with remarkable accuracy. By examining factors like weather patterns, material lead times, and crew productivity across hundreds of projects, AI can flag risks that human planners might miss.Integration with Building Information Modeling (BIM) opens even more possibilities. AI can automatically check designs for code compliance, identify clashes before installation begins, and even suggest optimal installation sequences based on site conditions and crew availability. Some contractors report 30% reductions in coordination time through AI-powered clash detection and resolution.Many of these opportunities will take some time, as managers become more comfortable with AI and begin to explore its capabilities. In fact, what we’ve seen already is that once construction leaders and field professionals get to a certain level of capability with AI, they start to find ways it can help both large and small companies. The true power of AI is giving teams the ability to adapt software to exactly what they need.The Double-Edged Sword: Risks AI PosesJust like any software, AI involves some risks. Here’s a good introduction to some of the bigger challenges:Data Access Policy VulnerabilitiesThe foundation of AI systems rests on data, documents and knowledge. For construction companies, this creates immediate concerns about data access and governance. AI systems require access to sensitive information, including infrastructure blueprints, cost estimates, client specifications and resource management plans, making them attractive targets for malicious actors. Without proper data access policies, contractors risk exposing proprietary fabrication methods, client details and competitive advantages that took decades to develop.The challenge extends beyond external threats. Internal data access policies must address how AI systems interact with different levels of sensitive information. What historical project information can be fed into third-party AI tools? Can subcontractor data be included in AI training sets? These questions require clear, enforceable policies that balance innovation with security.Consider a scenario where a well-meaning project manager uploads years of bid data to an AI tool for analysis. Without proper controls, this action could inadvertently expose pricing strategies, material sourcing relationships and proprietary installation methodologies to competitors if the AI platform experiences a breach or inappropriately uses the data for training public models.Accuracy Concerns and Meeting DocumentationAI’s promise of automated meeting transcription and documentation has captivated many contractors, but accuracy remains a persistent concern. When AI misinterprets technical discussions about HVAC specifications, refrigerant requirements or fabrication tolerances, the consequences can cascade through entire projects. The nuanced nature of construction conversations, with their mix of technical jargon, regional terminology and project-specific abbreviations, poses unique challenges for AI systems trained on general datasets. When a superintendent mentions “fishmouth” or “Pittsburgh lock,” will the AI accurately capture these industry-specific terms and their implications for the project?The Erosion of Critical SkillsPerhaps most concerning is AI’s potential to erode fundamental skills within the workforce. As contractors increasingly rely on AI for load calculations, psychrometric analysis and ductwork optimization, there’s a risk that essential technical expertise may atrophy. Young professionals entering the field might bypass the foundational learning that comes from manual calculations and hands-on problem-solving.This dependency creates vulnerabilities when AI systems fail or produce questionable results. Without the underlying knowledge to verify AI outputs, contractors may blindly follow flawed recommendations, potentially compromising project safety and quality. Imagine a scenario where an AI system recommends a duct size based on incomplete data, and no one on the team possesses the experience to recognize that the recommendation violates basic airflow principles.The risk extends to field personnel as well. As AI-powered tools handle increasingly complex tasks, from automated layout to robotic fabrication, the craftspeople who built their careers on these skills may find their expertise devalued. This could create a dangerous knowledge gap where the industry loses the very expertise needed to train and validate AI systems.Cybersecurity ThreatsThe cybersecurity landscape for construction AI presents unique challenges. AI systems face risks from attackers who “shift focus from stealing data to poisoning the AI models themselves.” For construction companies, this represents a new frontier of cyber risk. Compromised AI models could provide access to customer information, or lead to incorrect answers.The interconnected nature of modern construction projects amplifies these risks. IoT devices monitoring equipment performance, sensors tracking environmental conditions and integrated project management platforms all represent potential entry points for attackers. A breach in one system can cascade through integrated platforms, affecting everything from BIM models to financial systems.The “Bring Your Own AI” DilemmaAs AI tools proliferate, contractors face the challenge of employees using personal or unapproved AI applications for work tasks. This “shadow AI” phenomenon creates multiple risks: data leakage through consumer-grade tools, inconsistent outputs across teams and potential intellectual property violations. Without clear policies, sensitive project information could end up training public AI models, benefiting competitors.A foreman might use a free AI app to quickly generate a materials list, unknowingly uploading proprietary assembly details. An estimator could rely on an AI chatbot for code interpretations, receiving guidance that hasn’t been verified for local jurisdictions. These individual actions, while well-intentioned, can create liability exposure and competitive disadvantages that compound over time.Crafting Effective AI PoliciesEarly Stage: Foundation BuildingFor contractors just beginning their AI journey, success starts with solid foundations:Governance Structure: Create an AI steering committee combining IT, operations, field personnel and leadership perspectives. This group should meet regularly to evaluate tools, assess risks and guide implementation. Include both AI enthusiasts and skeptics to ensure balanced decision-making.Data Classification: Develop clear schemes identifying what information can be used with AI tools. Create categories like “Public” (marketing materials), “Internal” (general procedures), “Confidential” (project specifics) and “Restricted” (client data, pricing strategies). Each category should have clear handling requirements and approved use cases.Tool Approval Process: Establish a formal process for evaluating and approving AI tools. Consider factors like data security, vendor stability, integration capabilities and total cost of ownership. Start with pilot programs on non-critical projects before widespread deployment.Training Foundation: Implement basic training on AI capabilities and limitations. Every employee should understand what AI can and cannot do, recognizing both its potential and its pitfalls. Include real-world examples relevant to their daily work.Mid Stage: Systemic IntegrationAs AI adoption matures, policies must evolve to address more complex scenarios:Verification Protocols: Develop specific procedures for verifying AI outputs in critical applications. For example, any AI-generated load calculation must be spot-checked by a qualified engineer. Establish clear thresholds for when human verification is mandatory versus optional. A critical point here is to make sure someone “owns” every output from the AI system.Vendor Management: Create comprehensive assessment criteria for AI solution providers. Evaluate not just functionality but also data handling practices, model transparency and update procedures. Require vendors to provide regular reports on model performance and any identified biases or errors.Performance Metrics: Establish KPIs for AI initiatives. Track not just efficiency gains but also error rates, user adoption and impact on project outcomes. Regular reviews ensure AI investments deliver promised value while identifying areas for improvement.Conclusion: Balancing Innovation with PrudenceThe construction industry’s AI transformation is not a question of if, but how. SMACNA works to be one step ahead to ensure members have the resources and education to align with the growth curve. Success requires balancing aggressive innovation with prudent risk management.The path forward demands a thoughtful approach. Contractors must embrace AI’s potential while maintaining healthy skepticism about its limitations. They must invest in technology while preserving the human expertise that remains irreplaceable. Most critically, they must view AI as a tool to augment human capabilities rather than replace them.For SMACNA contractors, this means developing comprehensive strategies that address both opportunities and risks. It means creating policies that enable innovation while protecting against emerging threats. It means investing in both technology and training, ensuring teams can leverage AI effectively while maintaining the skills to work without it.The future belongs to those who can harness AI’s power while preserving the craftsmanship, judgment and expertise that define excellence in sheet metal and HVAC construction. By sharing experiences, best practices and lessons learned within the SMACNA community, contractors can collectively navigate this transformation, emerging stronger and more capable than ever before.As we stand at this technological crossroads, one truth remains clear: the contractors who thrive will be those who approach AI with both ambition and wisdom, leveraging its capabilities to enhance their work while never forgetting that construction remains, at its core, a human endeavor built on skill, experience and dedication to quality.
