The decisions that will define your year have mostly already been made upstream of your project. This edition is about three of them: one contractor's bet on a single operating system, two software giants placing opposite wagers on where construction technology lands in 2028, and a macro picture that is repricing every fixed-fee bid currently in the market.

THE EXECUTIVE BRIEFING
THIS WEEK’S KEY TAKEAWAYS

Full episode write-up at the bottom↓

Cavanagh, a 350-person Canadian civils contractor, achieved 96% daily system adoption across 70-plus active projects by rebuilding their operating model before adding technology. The prerequisite for AI that works is a workflow clean enough to put it on.

Procore's acquisition of Datagrid and Palantir's full-platform approach represent two different bets on where construction software lands in 2028. One assumes contractors want smarter tools on top of what they have. The other bets on a full operating model rebuild.

US construction input costs are running at 12.6% annualized through February 2026, with energy, copper, and steel all moving on tariffs and the Iran conflict. Fixed-price bids with thin escalation clauses represent a material commercial risk right now.

7 THINGS WORTH YOUR ATTENTION
ON THE RADAR THIS WEEK

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The contractor is Cavanagh, a 350-person, $120 million Canadian civil contractor that is eliminating its ERP from operations. It is removing the operational software layer from the business entirely, replacing it with a single platform that runs the whole company. This is an operating model story dressed up as a technology story, and the distinction matters for every software decision you are making right now.

Joe Patrois spent his career in project controls, working his way up from painting grade lines on-site. The problem he kept running into was the one every construction company has: every system you use to run a job sits in its own silo. Trucks get ordered by email. The dispatch office types that into a different piece of software. The foreman records arrivals on a paper sheet, and somebody in the office transcribes it into the payroll spreadsheet. By the time anyone can answer, "How many trucks did we run last week?", three people have entered the same information in three different places, and at least one of them got it wrong.

Joe walked into a Palantir bootcamp because Cavanagh's owner happened to have gone to school with one of their salespeople. What he saw was a platform called Foundry, which does not connect your existing silos. It removes them and replaces them with a single shared map, where every asset in your business exists once: one truck record, visible to the dispatcher, the foreman, the accountant, and the maintenance manager in real time.

Joe's team started with a couple of pilot use cases and immediately hit the problem that most technology implementations encounter. Bolting a new platform on top of existing workflows changed nothing. Foremen were still writing on paper. The dispatch office was still entering data twice. So Joe asked a different question: what if the whole business ran through Foundry?

The results, after a full year of internal selling and a culture-shift implementation, are properly impressive. Ninety-six percent of Cavanagh's workforce uses the system every day across 70-plus active projects, with more than ten software platforms retired. Estimators upload a tender document, and the system extracts client names, deadlines, insurance requirements and surfaces similar past jobs to generate a first-pass estimate. Foremen scan receipts in the field, and the system cross-references them against purchase orders for billing errors in real time.

Joe's phrase for what they actually built: "We didn't put Foundry in our business. We're putting our business in Foundry."

That distinction is at the heart of this whole argument. It connects to what Professor Martin Fischer of Stanford has argued on B&B: $80 of every $100 is on rebuilding existing workflows and $20 is on new tools. Most companies are doing it the other way round. They are building data strategies, pointing AI at disconnected systems, and wondering why the dashboards lie. Cavanagh built an operating model first. The clean data, the AI capability, the real-time visibility fell out the back as a byproduct of people doing their jobs in one shared system.

That is the implementation challenge most companies underestimate. Cavanagh had executive buy-in from day one and a leadership team prepared to tell experienced operations staff that the entire job was changing. Most companies are not willing to have that conversation. The moment the new system goes live, the instinct is to make it bend around old habits. Once that happens, the old foundation always wins.

Cavanagh eliminating its ERP raises an uncomfortable question for every major construction software vendor: if a 350-person contractor can close down ten legacy systems and build genuine AI capability on a unified platform, what exactly are the rest of the market doing?

Two strategies are crystallizing. Procore, which acquired agentic AI platform Datagrid in January this year for an undisclosed amount, is betting that contractors want their existing platforms to get smarter. 

Thiago da Costa, Datagrid's founder, who joined Procore to lead AI and data strategy, described the philosophy in the acquisition announcement:

Agentic software takes actions: it reviews submittals, drafts RFIs, and works across multiple connected systems without a human initiating each step. The customer keeps what they have, and intelligence is layered on top.

Palantir's thesis runs on different logic. Replace the platform, put the whole business inside one system, and the AI capability you get on the other side is a byproduct of having clean, unified data underneath it. The commercial reality is demanding: putting your entire operating model inside one vendor's platform means the lock-in is effectively total. Five years from now, when the renewal comes up, the vendor knows exactly what it would cost you to leave. That is leverage, and it will be used.

These are two different bets on what your technology stack looks like in 2028. We covered Palantir's push into construction in an earlier B&B episode. Datagrid offers incremental AI gains without a full rebuild; Cavanagh's path removes the data quality question but demands a leadership commitment most contractors cannot make mid-pipeline.

The Cavanagh story is the most instructive thing in this week's briefing. The macro picture is the most urgent.

According to ABC analysis of Bureau of Labor Statistics data, construction input costs rose at a 12.6% annualized rate through February 2026, the fastest pace since the supply chain disruptions of early 2022. Natural gas jumped 11% in February alone, and the data was collected before the Iran conflict began, meaning the full energy spike had not yet fed through. Copper, steel, and energy are now moving on the combined pressure of tariffs and ongoing conflict.

April inflation came in at 3.8% year on year, the hottest reading since May 2023, and traders are pricing a 30% chance of a Federal Reserve rate hike this year. If you have a fixed-price bid in market, retrieve the escalation clause, check its commodity coverage, and verify it names steel, copper, energy, and labor explicitly.

The data center boom is masking structural weakness across private nonresidential construction, which has been falling since its December 2023 peak and is now down 8% from that high. AI-driven power demand grew 17% in 2025, and annual data center investment is approaching a trillion dollars, so contractors with mission-critical capability are pivoting toward that market. The complication is that power has become the primary bottleneck: grid capacity constraints are holding up projects that are otherwise fully financed, designed, and contracted.

And public opposition is hardening faster than most in the industry anticipated. Hill County, Texas passed a one-year moratorium on new data center construction in unincorporated areas last week, in a 3-2 vote described as the first such action by a Texas county. Commissioner Jim Holcomb explained the vote:

Other Texas counties have explored similar steps, and in Missouri, a small town voted out all four incumbents who approved a local data center project. Opposition is crossing party lines and moving into communities with no history of organized development resistance.

The upstream forces shaping your pipeline are not all visible from the site. Three things worth doing this week: