• CMMC is now required for DoD contractors handling FCI or CUI — non-compliance can result in contract loss and disqualification from future awards.

• Prime contractors are liable if subcontractors are non-compliant — your entire supply chain must meet CMMC standards to maintain eligibility.

• The window to achieve certification is closing fast — readiness can take 6–12 months, so starting now is critical to avoid lost revenue or missed opportunities.

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What Is CMMC and Why Does It Matter to My Business?

The Cybersecurity Maturity Model Certification (CMMC) is a Department of Defense (DoD) framework that requires contractors and subcontractors to implement specific cybersecurity practices and standards. If your business processes, stores, or transmits federal contract information (FCI) or controlled unclassified information (CUI), compliance is mandatory to continue working with the DoD.

Who Does CMMC Apply To?

CMMC applies to:

• Prime contractors

• Subcontractors

• IT and service providers that handle FCI or CUI

If you’re part of the estimated 300,000 organizations within the DoD supply chain — even indirectly — you’ll need to comply. And if you’re a prime contractor, you’re responsible for ensuring your subcontractors comply as well.

What Are the Levels of CMMC, and Which One Applies to Me?

CMMC is broken into three maturity levels. Most middle-market contractors will fall into Level 1 or 2:

• Level 1 – Foundational: Basic cybersecurity hygiene practices (for handling FCI)

• Level 2 – Advanced: Security requirements of full NIST SP 800-171 (for handling CUI)

• Level 3 – Expert: Protecting high value CUI, compliance with NIST SP 800-172

The level of certification required depends on the type of information your organization touches during contract performance.

What Happens if We Don’t Follow CMMC?

The risk is significant. Non-compliance may result in:

• Loss of current contracts

• Ineligibility for future DoD work

• Legal or reputational risk

• Disqualification due to a non-compliant subcontractor

CMMC will soon be a “gatekeeper” for DoD eligibility — no certification, no contract.

When Will CMMC Go Into Effect?

With the final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) issued, the DoD will officially begin implementing CMMC compliance on November 10, 2025. The program will phase in over three years: initial self-assessments for Levels 1 and 2 in year one, third-party reviews for Level 2 in year two, and Level 3 assessments in year three.

Now is the time to start readiness — waiting could mean lost revenue or missed opportunities.

How Do We Prepare for CMMC?

Here’s a quick roadmap:

1. Define your scope: Identify the systems, people, and processes that interact with FCI/CUI. This will guide which level of certification you should target (Level 1, 2, or 3).

2. Perform a gap analysis: Understand where you are and where you need to be.

3. Close compliance gaps: Implement missing controls, policies, processes, and documentation, including NIST 800-171 controls and a system security plan (SSP)

4. Train your team: Staff education is a requirement, especially around cyber hygiene. Support your subcontractors — you’re accountable for their compliance too.

5. Prepare for the assessment: Level 1 certification requires an annual self-assessment. Levels 2 and 3 require third-party assessments conducted every three years.

6. Receive certification

How Long Does CMMC Readiness Take?

The timeline varies depending on your current cybersecurity maturity. With focused support, many organizations can reduce the estimated 6-12 month timeline by 50% — especially at Levels 1 and 2.

Can MGO Help With CMMC Compliance?

Yes. MGO supports companies at every stage of the CMMC journey — with a clear focus on readiness, not attestation. Our services include:

• CMMC gap assessments

• Scope and level planning, including boundary definition and data flows

• Policy and documentation development

• Employee training

• Subcontractor support

• Remediation guidance

We help you prepare efficiently and confidently for certification without overbuilding your controls or delaying your timeline.

How MGO Can Help

We help government contractors and their supply chains get CMMC-ready quickly and efficiently. Our Cybersecurity team includes Registered Practitioners (RPs) with extensive experience in DoD compliance, technical accounting, and IT infrastructure.

We serve a wide range of industries affected by CMMC: technology, manufacturing, life sciences, professional services, and more. Whether you’re a small subcontractor or a large prime, we tailor our services to your environment.

Our end-to-end support helps you get prepared for attestation, keep long-term compliance, and protect your DoD revenue. Reach out to our team today to learn how we can support your CMMC compliance efforts.

The post How Your Government Contracting Firm Can Get CMMC-Ready Fast appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Tariffs and global uncertainty are driving up construction hard costs and disrupting material sourcing and timelines. 

• Developers and contractors are responding by rethinking supplier relationships, stockpiling inputs, and tightening contract language. 

• Legal and accounting professionals play a key role in helping you manage financial risk, secure financing, and monitor vendor compliance. 

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In today’s construction market, tariffs change fast — and so do your costs, contracts, and supply chain risks. One week, your project inputs are tariffed at 25%; the next week, that rate drops to 10%. This type of volatility is no longer the exception, it’s the new norm.

As of mid-2025, tariff policy remains in flux. While electrical components, steel, and Canadian lumber remain hot-button items, the broader concern is uncertainty.

“Uncertainty causes a hold or freeze in decision making,” said Eric Paulsen, chief operating officer of commercial real estate firm Kidder Mathews. “With the fluctuation in pricing, contractors used to provide a quote that was good for months, now it’s only good for a week … if not days.”

So, what does this mean for your bottom line — and how can you adapt your contracts, purchasing, and financial planning to respond?

How Tariffs Are Hitting You on the Developer Side

Tariffs are directly affecting hard costs and disrupting the procurement process, especially when it comes to internationally sourced materials like steel and electrical equipment. According to Paulsen, delivery delays for items like electrical transformers and panels have become more severe. Even before recent escalations, delays were stretching out to 12 months or greater — meaning materials had to be ordered before final plans were approved just to stay on schedule.

Paulsen added that uncertainty is now adding “an extra layer of scrutiny” to every purchasing decision.

Practical Steps Developers Are Taking

To mitigate the risk of tariffs, some developers are taking proactive steps, such as:

• Buying in advance or keeping materials on hand: While this can be “brutal for smaller shops,” it’s a practical move to hedge against volatility.

• Seeking out new sourcing options: Paulsen noted that smaller countries like Cambodia are trying to modernize and enter the manufacturing game, though that’s still a longer-term shift.

• Preparing to shift suppliers: “Long-time relationships between contractor and supplier are now at risk,” he said. For some firms, the current environment is “a great time to usurp a previous relationship.”

Ultimately, Paulsen warned that “development at its core has to pencil or the development won’t happen.” Unless it’s a government or public-use project or a user-driven build-to-suit, many speculative projects are currently on hold.

Best-Case Versus Worst-Case Scenario

Moving forward, Paulsen describes the best-case scenario as “stability or at least a sense that the worst is over, so people can make some decisions.” The worst-case scenario? Basically, more of the same: “Flip flopping, start/stop, or anything that causes uncertainty.”

For developers to fully participate in the market, they need to have a sense of where things stand.

“We need the rules of the road,” Paulsen said. “With some final stability, people will figure out the new market measures and re-engage. Until then people who can wait, will.”

On the Legal Side: Modernizing Your Contracts

If you haven’t revisited your contracts in the last few years, now’s the time.

Derek Weisbender, a construction partner at Allen Matkins, a law firm with deep roots in real estate, noted that it’s typical for certain contracts to allow contractors to request more money when there’s an unanticipated change in law (such as a new tariff) that makes performance more expensive. The burden is on vendors to support their claims.

He said there is an “obligation on vendors [to] show baseline costs as of the contract date.” That serves as support to validate future price fluctuations. Without that transparency, disputes are more likely. But if the backup is built in, you’re better positioned to make your case — whether costs go up or down. But what’s newer, and not often considered, is a reciprocal clause that protects an owner or developer when the opposite occurs (such as when a tariff is rescinded).

“Sophisticated owners are using the baseline tariff cost to claw back savings when tariffs are avoided,” Weisbender noted. In other words, if tariff costs are ultimately avoided, the owner or developer can negotiate a partial refund or cost adjustment. Some contractors may disagree. But, as Weisbender explained, “it seems fair that if an owner should bear the burden of a tariff increase, they should likewise enjoy the savings of a tariff decrease.”

The Role of Your Accounting and Finance Team

Adapting to volatility isn’t just a legal or operational issue. It’s a financial one, too.

If you’re considering strategies like prepayment, early ordering, or warehousing materials, you may need short-term capital — and that requires careful planning and documentation. Accountants can help you:

• Model out cash flow scenarios to support big-ticket pre-buys

• Prepare the financial reporting needed for loan applications, especially if you’re approaching lenders outside your primary bank

• Support compliance monitoring for tariff-related contract provisions, validating vendor costs and identifying irregularities

While accountants can’t give legal advice, they can offer critical support when it comes to making your financial strategy align with your contract protections.

Your Next Move: Reassess Your Risk and Recheck Your Language

Tariff policy is beyond your control. But how you plan, purchase, and protect your interests isn’t.

If you’re a developer or general contractor:

• Talk to your lawyer about updating your contracts to include cost claw-back provisions 

• Evaluate whether you need to shift suppliers or purchase materials in advance 

• Engage your accounting team to model cash flow, validate vendor inputs, and support financing conversations 

If you’re relying on old contract templates or handshakes, you could be leaving money on the table, or absorbing unnecessary risks.

In today’s market, your success depends on staying agile, informed, and well-supported.

How MGO Can Help

Our Professional Services team works closely with developers and contractors to provide financial clarity in uncertain markets. From cash flow modeling and budgeting for material pre-purchasing to preparing financial reports for lenders. We help you make confident, informed decisions. We also assist with ongoing compliance support tied to contract terms and vendor costs.

Reach out to our team today to build a financial strategy that keeps your business moving forward.

The post How to Manage Your Construction Costs in a Tariff-Turbulent Year appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• AI adoption will accelerate across both the real estate and the construction industries, helping companies reduce costs, improve efficiency, and manage labor shortages, so if you’re lagging behind, you’ll want to catch up quickly.
• New regulations around biometric data are expected to emerge, especially at the state level, so construction companies will need to proactively safeguard their employee information.
• High-impact projects like data centers, infrastructure builds, and adaptive reuse conversions are expected to drive demand throughout 2025, with smaller commercial developments taking a backseat.

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Across industries, the last year has been challenging for U.S. companies. Uncertainty around the election, steep inflation, and high interest rates have introduced instability and financial pressures that have taken their toll on the business landscape.

As 2025 nears, things appear to be changing: Interest rate cuts are on the horizon, while the end of the election cycle may introduce greater market stability heading into the new year.

Forecasted market stability doesn’t mean the new year will be without its challenges. A new administration and shifting market pressures mean real estate and construction leaders must act now to take advantage of new opportunities and confront persistent obstacles.

Looking for the right information to prepare yourself for the year ahead? Read on to uncover our predictions for real estate and construction in 2025.

Prediction 1: AI use will drastically increase in real estate and construction

AI use has become widespread in the business community, but not every industry is using it equally. While many real estate firms have started adopting AI, the construction industry is largely still in the exploratory stage.

We expect to see both industries drastically increase their use of AI in the next year, driven by the accessibility of generative AI and the opportunity for substantial cost savings, especially as companies seek to combat inflation. AI can also be used to improve safety, streamline project management, and address labor shortages. Already we’ve seen the benefits a company may achieve by leveraging AI. Now is an ideal time for slower adopters, like the construction industry, to make their move.

While both the construction and real estate industries will increase AI usage in the next year, the paths taken may be different. Construction companies will likely prioritize applying AI to project management areas, such as monitoring budget spend, scheduling tasks, suggesting resource allocations, and flagging unexpected delays. Real estate firms, meanwhile, may see the greatest immediate benefit by using AI to streamline communication. For example, using chatbots to answer renters’ simple questions and route more complex questions to appropriate professionals can lower costs while saving time and effort.

Prediction 2: More legislation will be introduced to protect biometric data

As AI makes it easier to collect and analyze biometric data, more construction companies will likely adopt AI to apply to their own biometrics use cases, such an enhancing security and tracking time. At the same time, we expect to see the introduction of more legislation governing how employers use, manage, store, and protect biometric data.

Biometric Data: Unique physical or behavioral characteristics that can be used to verify a person’s identity, such as fingerprints.

Biometric data has serious privacy implications and employees may have concerns around how their private information is being used, stored, and protected. If a construction company experiences a data breach, for example, employees could have their biometric data stolen, putting them at risk of identity theft.

Legislation like this already exists in some states — most notably Illinois — and more state-level regulations will likely pass before federal regulations are enacted. Construction companies should monitor the evolution of biometric regulation in their state and take proactive measures to secure their employees’ data.

Prediction 3: Data center construction will be robust

As tech companies ramp up investment in AI tools, they will need increasingly powerful data centers to support them.

Many tech companies are seeking construction bids to build new centers with the required infrastructure to power and maintain AI tools, instead of retrofitting existing buildings that may not have the appropriate features. For example, data centers that power AI tools generally need more advanced cooling systems than data centers that support technology requiring less computing power, such as cloud computing.

New data centers will likely be built in areas with abundant open space and proximity to key resources, such as power transmission infrastructure and access to labor. Northern Virginia; Austin, Texas; Atlanta, Georgia; and Columbus, Ohio are just a few examples of locations tech companies are eyeing for possible data centers.

Tech companies will face a major challenge in supplying the considerable energy needed to power each facility, as some AI tools require energy that may exceed the capacity of nearby power grids. One possible solution tech companies are exploring is nuclear energy, but they face considerable legal challenges they face in obtaining access to compact nuclear reactors.

Ultimately, as AI use becomes more widespread, the infrastructure needed to support these data centers will also need to increase drastically, which may mean even more construction projects in the near future.

Prediction 4: Commercial real estate will continue to transition to residential living

Commercial real estate faces ongoing challenges as remote work continues and commercial mortgage- backed securities become due. However, industry trends are helping to address obstacles in new ways.

Adaptive reuse — the repurposing of existing buildings — offers opportunities for new residential spaces by retrofitting abandoned malls, schools, office buildings, and more.

In 2025, we expect to see adaptive reuse accelerate, as fewer workers return to the office and the housing crisis continues. Currently, the U.S. has a shortage of 7.3 million rental homes that are affordable and available to renters with extremely low incomes. Adaptive reuse can play a major role in addressing this crisis, especially in urban areas, which tend to see greater housing scarcity.

7.3 Million: Shortage of affordable and available rental homes

Surrounding businesses, many of which are struggling in the era of remote work, can also benefit from adaptive reuse. Without workers coming into the office every day, many coffee shops, restaurants, convenience stores, and other service providers have taken a hit to their bottom line. By bringing more residents into the community, these businesses could see a boost in sales to offset the impacts of remote work.

Prediction 5: Infrastructure and industrial projects will increase

In 2025, we expect construction companies to continue taking on large numbers of infrastructure and industrial projects. Infrastructure projects will see increased investment in part due to the increased frequency and severity of natural disasters, which will require the U.S. to both build new and repair existing infrastructure.

America First policies coming out of the new Trump Administration are likely to bolster domestic industrial projects. Such policies could include expanding R&D tax credits or making permanent certain provisions of the Tax Cuts and Jobs Act that are particularly advantageous to manufacturers. Increased demand for data centers will also feed into the need for more industrial projects.

On the other hand, construction companies will likely see fewer projects from smaller retailers and non-Class A commercial real estate firms. Smaller retailers are experiencing financial pressures, such as pullbacks in consumer spending, that are likely to continue until inflation eases. We expect these pressures to push smaller retailers away from large cap-ex projects in the year ahead.

Class A commercial real estate will likely continue to see high demand. Smaller commercial real estate firms, however, have fewer resources and aren’t as well-positioned to continue investing in construction projects. They are also unlikely to beat out their Class A competitors for large project bids.
Prepare your company for success in 2025.

Written by Kristi Gibson, Brent Horak and Heath Winsheimer. Copyright © 2025 BDO USA, P.C. All rights reserved. www.bdo.com

How MGO Can Help

At MGO, we are well-versed in the complex and evolving challenges currently facing real estate and construction companies. Whether you’re looking to evaluate or adopt AI tools, navigate biometric data regulations, pursue adaptive reuse opportunities, or prepare for the anticipated surge in infrastructure and industrial projects, our team offers the experience and strategic guidance to help you move forward confidently.

We partner with companies at every stage — from navigating regulatory complexity to uncovering new avenues for growth — preparing you to be positioned for resilience and success in 2025 and beyond. Contact us to learn more.

The post 2025 Real Estate and Construction Predictions appeared first on MGO CPA | Tax, Audit, and Consulting Services.

Previously, you were not mandated to include independent contractors under the state’s new hire reporting requirement; now you’ll have to add them to the list of other new hires or rehires to report.

If your organization falls into one of the following categories, you’re required to report your new hires for tax purposes:

• Labor organizations, including union-operated placement offices (I.e., hiring halls),
• Employers of individuals performing domestic services,
• Government entities excluding federal agencies.

Your organization will have to report those new hires or rehires, including independent contractors, within 20 calendar days from the date hired. The hiring date is defined as the first day the employee or contractor:

• Is eligible to collect commissions for any job performed based only on commissions,
• Completes the services for which they will be paid (collecting tips, wages, commissions, or another agreed-upon compensation).

If you are an employer looking for clarification regarding additional reporting requirements in New York State (including how to actually file), please contact MGO’s tax team to talk to an advisor who can comprehensively walk you through the steps and ensure you avoid any missteps that could affect your organization.

The post New York State Updates Employer Reporting Requirements appeared first on MGO CPA | Tax, Audit, and Consulting Services.