Small-sized and medium-sized contractors are characterized by organizational structures that are highly focused on control. As a result, employees concentrate on day-to-day activities with little time or motivation to generate creative ideas. Generally, the technological improvements of these companies arise as a result of problem-solving at the construction site. Nevertheless, the actual status quo is changing. Some Spanish public agencies are already considering innovation as an added value in public procurement; thus, large contractors are starting to systemize their innovative efforts. This means that small-sized and medium-sized enterprises must modify their attitudes towards innovation in order to sustain their competitiveness. The implementation of a system that enhances innovation and acquisition of knowledge may be the solution to overcome this disadvantage. The implementation of an innovation management system was analyzed in a Spanish construction firm of medium size for 9 years. The system builds on a set of processes aimed to generate innovation projects that allow the contractor to document the innovation, not only for internal purposes related to knowledge management, but also for external ones associated with obtaining better results in public tenders. These processes are as follows: (1)technology watch, (2)creativity, (3)planning and executing innovation projects, (4)technology transfer, and (5)protection of results. The final step is the feedback of the entire process through the assessment of the final outcomes. The implementation of the innovation system is ensured within the organization, through training of personnel, participation of stakeholders, and encouragement of the innovation culture. (C) 2015 American Society of Civil Engineers.