R&D Tax Credit Solutions for Construction Companies

When looking around at the buildings, highways, and infrastructure systems that populate our world, one rarely thinks of the complexity behind constructing such a system. While engineering features are easy to marvel at, actually figuring out how to make all of the pieces come together requires extensive research, process development, and engineering. Enter the modern construction company.

Many construction companies are ultimately responsible for the success or failure of the finished product. To figure out how to meet both the technical and budgetary requirements of the scope of work, construction companies will need to develop and evaluate alternative plans and processes. Since most of this work is done under fixed-price contracts, the construction firm faces financial risk should its research fail. This is exactly the type of activity the R&D Credit seeks to reward.

Any construction company that develops alternative bid proposals, alternative construction processes, or workflows and has to overcome uncertainties uncovered in the field may be eligible for the R&D Credit. In recent years, an increasing amount of RFPs have been sent out as design/build, especially in the government sector. As a result, many construction firms are now responsible for developing both the engineering solution and the as-built construction deliverable. This only increases eligibility for the R&D Tax Credit.

The following activities in the construction industry may qualify for the R&D Credit:

• Value engineering
• Analyzing alternative construction processes in the bid phase
• Earthworks or Agtek modeling
• Cut/fill analysis
• Heavy highway/bridge construction
• Support of excavation design
• Design/build project development
• Developing construction methods
• Developing decontamination plans
• Developing dewatering plans
• Takeoff calculations
• Lean construction process analysis
• Developing alternative plans to overcome unforeseen field conditions
• Re-engineering drawings
• Lab testing
• Performing engineering calculations
• Field project management
• Efforts to experiment with new technologies to improve efficiency

For companies that qualify, often the wages of estimators, engineers, project managers, superintendents, and foremen can be attributed (in whole or in part) towards the credit. If the outline in the previous paragraphs sounds familiar to your company, please contact the team at ATS to obtain a free analysis of your credit potential.

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