UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10 - Q
(Mark One)
    [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2008

                                       OR

    [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                For the transition period from ______ to ______.

                        Commission File Number 001-32865

                                    KSW, INC.
                                    ---------
             (Exact name of registrant as specified in its charter)

           Delaware                                    11-3191686
           --------                                    ----------
        (State or other jurisdiction of                (I.R.S. Employer
        incorporation or organization)                Identification Number)

37-16 23rd Street, Long Island City, New York                 11101
---------------------------------------------                 -----
        (Address of principal executive offices)            (Zip Code)

                                  718-361-6500
                                  ------------
              (Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X]  No [ ]

         Indicate by check mark whether the Registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See definitions of "large accelerated filer", "accelerated filer" and
"smaller reporting company" in Rule 12b-2 of the Exchange Act.  (Check one):

<TABLE>
<S>                              <C>                         <C>                            <C>
Large Accelerated Filer [ ]      Accelerated Filer [ ]       Non-Accelerated Filer [ ]      Smaller Reporting Company [X]
</TABLE>

         Indicate by check mark whether the Registrant is a shell company (as
defined in Rule 12b-2 of Exchange Act). Yes [ ]  No [X]

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:

                                                       Outstanding at
                Class                                  November 5, 2008
                -----                                  ----------------
        Common stock, $.01 par value                     6,287,825
<PAGE>

                                    KSW, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 2008
                        --------------------------------

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
                                                                        Page No.
--------------------------------------------------------------------------------
<S>                                                                        <C>
PART I     FINANCIAL INFORMATION

Item 1. Financial Statements

           Consolidated Balance Sheets -
           September 30, 2008 (unaudited) and December 31, 2007             3

           Consolidated Statements of Income -
           Three and nine months ended September 30, 2008 and 2007
           (unaudited)                                                      4

           Consolidated Statements of Comprehensive Income -
           Three and nine months ended September 30, 2008 and 2007
           (unaudited)                                                      5

           Consolidated Statement of Stockholders' Equity -
           Nine months ended September 30, 2008 (unaudited)                 6

           Consolidated Statements of Cash Flows -
           Nine months ended September 30, 2008 and 2007 (unaudited)        7

           Notes to Consolidated Financial Statements                       8

Item 2. Management's Discussion and Analysis of
        Financial Condition and Results of Operations                      13

Item 3. Quantitative and Qualitative Disclosures
        about Market Risk                                                  18

Item 4. Controls and Procedures                                            18

--------------------------------------------------------------------------------
PART II    OTHER INFORMATION
Item 1     Legal Proceedings                                               18
Item 1A    Risk Factors                                                    18
Item 2     Unregistered Sales of Equity Securities and Use of Proceeds     19
Item 3     Defaults Upon Senior Securities                                 19
Item 4     Submission of Matters to a Vote of Security Holders             19
Item 5     Other Information                                               19
Item 6     Exhibits                                                        20
--------------------------------------------------------------------------------
SIGNATURE                                                                  21
INDEX TO EXHIBITS                                                          22
</TABLE>

                                        2
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS
-----------------------------

                            KSW, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                       September 30, 2008       December 31, 2007
                                                       ------------------       -----------------
                                                        (unaudited)
<S>                                                         <C>                        <C>
ASSETS
------
Current assets:
 Cash and cash equivalents                                  $17,395                    $16,232
 Marketable securities                                        1,561                      1,892
 Accounts receivable                                         20,128                     14,133
 Retainage receivable                                         9,197                      6,647
 Costs and estimated earnings in excess of
  billings on uncompleted contracts                             894                      1,107
 Prepaid expenses and other receivables                         472                        359
 Prepaid income taxes                                           154                          -
                                                            -------                    -------
   Total current assets                                      49,801                     40,370

Property and equipment, net of accumulated
 depreciation and amortization of $2,138 and $2,091
 at 9/30/08 and 12/31/07, respectively                          291                        254
Deferred income taxes and other                                 300                        313
                                                            -------                    -------
 Total assets                                               $50,392                    $40,937
                                                            =======                    =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
 Accounts payable                                           $17,159                    $14,182
 Retainage payable                                            5,210                      3,636
 Accrued payroll and benefits                                 1,902                      1,519
 Accrued expenses                                               241                        175
 Billings in excess of costs and estimated
  earnings on uncompleted contracts                           6,560                      4,031
 Income taxes payable                                             -                          5
                                                            -------                    -------
  Total current liabilities                                  31,072                     23,548
                                                            -------                    -------
Commitments and contingencies (Note 5)

Stockholders' equity :
 Preferred stock, $.01 par value, 1,000,000 shares
   authorized, no shares issued and outstanding                   -                          -
 Common stock, $.01 par value, 25,000,000 shares
  authorized, 6,287,825 and 6,244,324 shares issued
  and outstanding at 9/30/08 and 12/31/07, respectively          63                         62
 Additional paid-in capital                                  13,289                     13,139
 Retained earnings                                            6,138                      4,161
 Accumulated other comprehensive income (loss):
   Net unrealized holding gains (losses) on available -
    for-sale securities                                        (170)                        27
                                                            -------                    -------
    Total stockholders' equity                               19,320                     17,389
                                                            -------                    -------
 Total liabilities and stockholders' equity                 $50,392                    $40,937
                                                            =======                    =======
</TABLE>

          See accompanying notes to consolidated financial statements.

                                        3
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
                 (in thousands, except share and per share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                             Three Months           Three Months            Nine Months            Nine Months
                                         Ended Sept. 30, 2008   Ended Sept. 30, 2007   Ended Sept. 30, 2008   Ended Sept. 30, 2007
                                         --------------------   --------------------   --------------------   --------------------
<S>                                         <C>                    <C>                    <C>                    <C>
Revenues                                    $   25,527             $   21,027             $   68,016             $   58,338
Cost of revenues                                21,818                 18,182                 58,828                 50,195
                                            ----------             ----------             ----------             ----------
Gross profit                                     3,709                  2,845                  9,188                  8,143
Selling, general and
  administrative expenses                        1,496                  1,212                  4,147                  3,537
                                            ----------             ----------             ----------             ----------
 Operating income                                2,213                  1,633                  5,041                  4,606
                                            ----------             ----------             ----------             ----------
Other income:
Gain on sales of marketable securities              14                      1                     14                      1
Interest income, net                                80                    159                    286                    393
                                            ----------             ----------             ----------             ----------
 Total other income                                 94                    160                    300                    394
                                            ----------             ----------             ----------             ----------
Income before provision
  for income taxes                               2,307                  1,793                  5,341                  5,000

Provision for income taxes                         986                    829                  2,106                  2,278
                                            ----------             ----------             ----------             ----------
Net income                                  $    1,321             $      964             $    3,235             $    2,722
                                            ==========             ==========             ==========             ==========
Earnings per common share:
Basic                                       $      .21             $      .16             $      .52             $      .44
Diluted                                     $      .21             $      .15             $      .51             $      .44
Weighted average common
 shares outstanding:
 Basic                                       6,287,825              6,182,637              6,276,434              6,137,347
 Diluted                                     6,341,282              6,284,395              6,333,594              6,237,379
</TABLE>

          See accompanying notes to consolidated financial statements.

                                        4
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                             Three Months           Three Months            Nine Months            Nine Months
                                         Ended Sept. 30, 2008   Ended Sept. 30, 2007   Ended Sept. 30, 2008   Ended Sept. 30, 2007
                                         --------------------   --------------------   --------------------   --------------------
<S>                                           <C>                    <C>                    <C>                    <C>
Net income                                    $  1,321               $   964                $  3,235               $  2,722
                                              --------               -------                --------               --------
Other comprehensive
   income (loss) before
   income tax (benefit):

Unrealized holding gains
 (losses) arising
 during the period                                (237)                   10                    (344)                    58

Less: reclassification
  adjustment for gains
  included in
  net income                                       (14)                   (1)                    (14)                    (1)
                                              --------               -------                --------               --------
Other comprehensive
  income (loss)
  before income tax
 (benefit)                                        (251)                    9                    (358)                    57

Income tax (benefit)
 related to items
 of other
 comprehensive income
 (loss)                                           (113)                    4                    (161)                    26
                                              --------               -------                --------               --------
Other comprehensive
 income (loss), net of
 income tax (benefit)                             (138)                    5                    (197)                    31
                                              --------               -------                --------               --------
Total comprehensive
 income                                       $  1,183               $   969                $  3,038               $  2,753
                                              ========               =======                ========               ========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                        5
<PAGE>

                            KSW, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                      NINE MONTHS ENDED SEPTEMBER 30, 2008
                        (in thousands, except share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                           Accumulated
                                                                             Additional                       Other
                                                            Common Stock      Paid-In                      Comprehensive
                                                         Shares     Amount    Capital   Retained Earnings  Income (loss)   Total
                                                         ------     ------    -------   -----------------  -------------   -----
<S>                                                     <C>          <C>      <C>           <C>              <C>         <C>
Balances, January 1, 2008                               6,244,324    $  62    $ 13,139      $ 4,161          $    27     $ 17,389
Net income                                                      -        -           -        3,235                -        3,235
Share transactions under employee stock option plan        43,501        1          67            -                -           68
Amortization of share based compensation                        -        -          21            -                -           21
Tax benefits from exercise of employee stock option
  plan                                                          -        -          62            -                -           62
Cash dividend paid - $.20 per share                             -        -           -       (1,258)               -       (1,258)
Net unrealized losses on available-for-sale securities          -        -           -            -             (197)        (197)
                                                        ---------    -----    --------      -------          -------     --------
Balances, September 30, 2008                            6,287,825    $  63    $ 13,289      $ 6,138          $  (170)    $ 19,320
                                                        =========    =====    ========      =======          =======     ========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                        6
<PAGE>

                            KSW, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                            Nine Months             Nine Months
                                                        Ended Sept. 30, 2008   Ended Sept. 30, 2007
                                                        --------------------   --------------------
<S>                                                            <C>                     <C>
Cash flows from operating activities:
  Net income                                                   $ 3,235                 $ 2,722
Adjustments to reconcile net income to cash
  provided by operating activities:
  Depreciation and amortization                                     63                      54
  Deferred income taxes                                            194                     196
  Tax benefits from exercise of stock options                      (62)                   (305)
  Gain on sale of fixed asset                                       (3)                      -
  Gain on sale of marketable securities                            (14)                     (1)
  Stock-based compensation expense related
     to stock option plan                                           21                       8
Changes in operating assets and liabilities:
  Accounts receivable                                           (5,995)                 (2,672)
  Retainage receivable                                          (2,550)                 (1,250)
  Costs and estimated earnings in excess
     of billings on uncompleted contracts                          213                     142
  Prepaid expenses and other receivables                          (113)                   (141)
  Prepaid income taxes                                             (92)                      -
  Other                                                            (20)                      -
  Accounts payable                                               2,977                   4,248
  Retainage payable                                              1,574                     860
  Accrued payroll and benefits                                     383                     535
  Accrued expenses                                                  66                     (35)
  Billings in excess of costs and estimated
     earnings on uncompleted contracts                           2,529                    (396)
  Income taxes payable                                              (5)                   (982)
                                                               -------                 -------
Net cash provided by operating activities                        2,401                   2,983
                                                               -------                 -------
Cash flows from investing activities:
  Purchases of property and equipment                             (108)                    (27)
  Proceeds from sale of marketable securities                       18                       6
  Proceeds from sale of fixed asset                                 11                       -
  Purchases of marketable securities                               (31)                 (1,001)
                                                               -------                 -------
Net cash used in investing activities                             (110)                 (1,022)
                                                               -------                 -------
Cash flows from financing activities:
  Proceeds from exercise of employee stock option plan              68                     230
  Dividends paid                                                (1,258)                      -
  Tax benefits from exercise of stock options                       62                     305
                                                               -------                 -------
Net cash (used in) provided by financing activities             (1,128)                    535
                                                               -------                 -------
  Net increase in cash and cash
     equivalents                                                 1,163                   2,496
Cash and cash equivalents, beginning of period                  16,232                  14,085
                                                               -------                 -------
Cash and cash equivalents, end of period                       $17,395                 $16,581
                                                               =======                 =======
Supplemental disclosure of cash flow information
Cash paid during the period for:
  Interest                                                     $     6                 $     4
  Income taxes                                                 $ 2,046                 $ 3,063
</TABLE>

          See accompanying notes to consolidated financial statements.

                                        7
<PAGE>

                            KSW, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1.   Nature of Operations and Basis of Presentation
     ----------------------------------------------

KSW, Inc. and its Subsidiary,  collectively  the "Company",  furnish and install
heating, ventilating and air conditioning systems and process piping systems for
institutional,  industrial,  commercial,  high-rise residential and public works
projects,  primarily  in the State of New York.  The  Company  also  serves as a
mechanical trade manager, performing project management services relating to the
mechanical trades. The Company operates as one segment.

The  unaudited  consolidated  financial  statements  presented  herein have been
prepared in accordance with the instructions to Form 10-Q and do not include all
of the information and disclosures  required by accounting  principles generally
accepted  in  the  United  States  of  America.   These  consolidated  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements  and notes thereto  included in the  Company's  Annual Report on Form
10-K for the year ended December 31, 2007.

In the opinion of management,  the accompanying unaudited consolidated financial
statements  include  all  normal  recurring  adjustments  necessary  for a  fair
presentation  of  the  consolidated  financial  position  of the  Company  as of
September 30, 2008, and its results of operations and  comprehensive  income for
the three and nine month  periods  ended  September  30,  2008 and 2007 and cash
flows  for the nine  month  periods  ended  September  30,  2008 and  2007.  The
operating  results  of the  Company  for any  period  may not be  indicative  of
operating results for any full year.

2.   Significant Accounting Policies
     -------------------------------

The  significant  accounting  policies  followed by the Company in preparing its
consolidated financial statements are set forth in Note (2) to such consolidated
financial  statements  included in the Company's  Annual Report on Form 10-K for
the year ended December 31, 2007. The Company has made no significant changes to
these policies during 2008.

In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 157, "Fair Value Measurements"  ("SFAS 157"). SFAS 157 provides guidance for
using  fair  value to  measure  assets  and  liabilities.  It also  responds  to
investors' requests for expanded information about the extent to which companies
measure assets and liabilities at fair value,  the  information  used to measure
fair value,  and the effect of fair value  measurements  on  earnings.  SFAS 157
applies whenever other standards require (or permit) assets or liabilities to be
measured  at fair  value,  and does not  expand the use of fair value in any new
circumstances.  SFAS 157 is effective for financial statements issued for fiscal
years beginning after November 15, 2007. The Company's investments in marketable
securities  are  exposed  to  price   fluctuation.   The  Company  values  these
securities,  based on Level 1 of the SFAS 157 fair value hierarchy, using quoted
prices  in active  markets,  as it did prior to the  adoption  of SFAS 157.  The
adoption of SFAS 157

                                        8
<PAGE>

has not had a material impact on the Company's consolidated results of
operations or financial condition.

In February 2007, the FASB issued  Statement No. 159, "The Fair Value Option for
Financial  Assets and  Financial  Liabilities  - including  an amendment of FASB
Statement No. 115" ("SFAS 159").  SFAS 159 permits entities to choose to measure
many financial  instruments  and certain other items at fair value.  SFAS 159 is
effective  for the  Company's  financial  statements  beginning  with the  first
quarter  of 2008.  The  adoption  of SFAS  159 had no  impact  on the  Company's
consolidated  results of  operations or financial  condition,  since the Company
elected  not to report  any  assets or  liabilities at fair value utilizing this
pronouncement.

3.   Stockholders' Equity
     --------------------

(A)  Stock Option Plans
     ------------------

The Company has outstanding  stock options issued under two plans, the KSW, Inc.
1995 Stock Option Plan ("1995  plan") and the KSW,  Inc.  2007 Stock Option Plan
("2007 plan").

The 1995 plan expired  December 2005.  Therefore,  no new options can be granted
under that plan. There are 145,501  outstanding  options,  which were previously
issued under the 1995 plan, expiring on various dates through 2015.

The 2007 plan was adopted and  approved by the  Company's  Board of Directors on
May 8, 2007 and was approved by the  shareholders at the May 2008 Annual Meeting
of  Stockholders.  Pursuant to the 2007 plan,  300,000 shares of common stock of
the Company are reserved for issuance to employees, consultants and directors of
the  Company.  The primary  purpose of the 2007 plan is to reward and retain key
employees.  No options have been issued to officers or employees  under the 2007
plan.  Under this plan the Company has issued to a Company  director  options to
purchase  20,000  shares of the Company's  common stock at an exercise  price of
$6.95 per share.

During the three and nine months ended September 30, 2008, the Company  incurred
compensation   expense  related  to  the  vesting  of  stock  options   totaling
approximately  $4,000 and  $21,000,  respectively.  There were no stock  options
exercised  during the quarter ended September 30, 2008. In addition,  during the
quarter ended June 30, 2008 an officer exercised 7,001 options.  A director,  an
executive and an employee  exercised an aggregate of 36,500  options  during the
quarter ended March 31, 2008.

During the three and nine months ended September 30, 2007, the Company  incurred
compensation   expense  related  to  the  vesting  of  stock  options   totaling
approximately $3,000 and $8,000,  respectively.  In addition, during the quarter
ended  September  30,  2007,  two company  executives  exercised an aggregate of
29,750 options.

During the quarter ended June 30, 2007, two Company executives,  an employee and
a director  exercised an aggregate of 40,166  options.  During the quarter ended
March 31, 2007,  an executive  and a former  director  exercised an aggregate of
70,500 options.

                                        9
<PAGE>

As of  September  30,  2008,  there is  approximately  $27,000  of  unrecognized
compensation expense related to unvested  stock-based  compensation awards. That
cost is expected to be recognized over the next 1.8 years.

Under both plans,  options were  granted to certain  employees,  executives  and
directors  at  prices  equal to the  market  value of the stock on the dates the
options were issued.  The options granted generally have a term of 10 years from
the grant date and granted  options vest  ratably over a three year period.  The
fair  value  of  each  option  is  amortized  into  compensation  expense  on  a
straight-line basis between the grant date for the option and each vesting date.
The Company  estimates  the fair value of all stock option awards as of the date
of the  grant  by  applying  the  Black-Scholes  pricing  valuation  model.  The
application of this valuation model involves assumptions that are judgmental and
sensitive in the  determination of compensation  expense which would include the
expected  stock price  volatility,  risk-free  interest  rate,  weighted-average
expected life of the options and the dividend yield.

Historical  information  is the primary  basis for the selection of the expected
volatility,  expected  dividend  yield and the  expected  lives of options.  The
risk-free  interest rate was selected based upon yields of U.S.  Treasury issues
with a term equal to the expected life of the option being valued.  Stock option
activity for the nine months ended September 30, 2008 was as follows:

<TABLE>
<CAPTION>
                                                                         Weighted Average
                                      Number        Weighted Average   Remaining Contractual       Aggregate
                                    of Shares        Exercise Price       Term in Years         Intrinsic Value
                                    ---------        --------------       -------------         ---------------
<S>                                  <C>              <C>                       <C>               <C>
Outstanding at January 1, 2008       189,002          $    1.58
Expired/canceled                           -                  -
Granted                               20,000          $    6.95
Exercised                            (43,501)         $    1.58
                                     -------
Outstanding at September 30, 2008    165,501          $    2.23                 3.6               $506,000
                                     =======
Exercisable at September 30, 2008    152,167          $    1.81                 3.1               $443,000
</TABLE>

Cash proceeds, tax benefits and intrinsic value related to total stock options
exercised during the three and nine months ended September 30, 2008 and 2007 are
as follows:

<TABLE>
<CAPTION>
                                  Three Months Ended  Three Months Ended   Nine Months Ended    Nine Months Ended
                                  September 30, 2008  September 30, 2007   September 30, 2008   September 30, 2007
                                  ------------------  ------------------   ------------------   ------------------
<S>                                   <C>                    <C>                <C>                 <C>
Proceeds from stock options
   exercised                          $        -             $ 46,000           $ 68,000            $230,000
Tax benefits related to stock
   options exercised                  $        -             $ 80,000           $ 62,000            $305,000
Intrinsic value of stock options
   exercised                          $        -             $173,000           $201,000            $691,000
</TABLE>

                                       10
<PAGE>

(B)  Dividend
     --------

On April 30, 2008, the Company's Board of Directors  declared a cash dividend of
$.20 per share.  The aggregate  amount of the dividend was  $1,258,000,  and was
paid on June 17, 2008 to shareholders of record as of May 26, 2008.

4.   Earnings per Share
     ------------------

<TABLE>
<CAPTION>
                                     Three Months Ended   Three Months Ended  Nine Months Ended  Nine Months Ended
                                     September 30, 2008   September 30, 2007  September 30, 2008 September 30, 2007
                                     ------------------   ------------------  ------------------ ------------------
<S>                                       <C>                <C>                <C>                  <C>
Net income                                $1,321,000         $  964,000         $3,235,000           $2,722,000
                                          ==========         ==========         ==========           ==========
Earnings per share - basic:
---------------------------
Weighted average shares
  outstanding during the period            6,287,825          6,182,637          6,276,434            6,137,347
                                          ==========         ==========         ==========           ==========
Earnings per share - basic                $      .21         $      .16         $      .52           $      .44
                                          ==========         ==========         ==========           ==========
Earnings per share - diluted:
-----------------------------
Weighted average shares
  outstanding during the period            6,287,825          6,182,637          6,276,434            6,137,347
Effect of stock option dilution               53,457            101,758             57,160              100,032
                                          ----------         ----------         ----------           ----------
Total shares outstanding for
  purposes of calculating diluted
  earnings per share                       6,341,282          6,284,395          6,333,594            6,237,379
                                          ==========         ==========         ==========           ==========
Earnings per share - diluted              $      .21         $      .15         $      .51           $      .44
                                          ==========         ==========         ==========           ==========
</TABLE>

5.   Commitment and Contingencies
     ----------------------------

(A)  Proposals and Claims
     --------------------

During the course of its work on  construction  projects,  the Company may incur
expenses for work outside the scope of its contractual obligations, for which no
acknowledgment of liability exists from the owner or general contractor for such
additional  work.  These claims may include  change  proposals for extra work or
requests for an equitable  adjustment  to the  Company's  contract  price due to
unforeseen  disruptions to its work. In accordance  with  accounting  principles
generally  accepted  in the  United  States  of  America  for  the  construction
industry,  until  written  acknowledgments  of the  validity  of the  claims are
received,  the  claims  are  not  recognized  in the  accompanying  consolidated
financial   statements.   No  accruals  have  been  made  in  the   accompanying
consolidated  financial  statements  related  to these  proposals  for  which no
acknowledgment  of  liability  exists.  While  the  Company  has been  generally
successful  in  obtaining a favorable  resolution  of such  claims,  there is no
assurance that the Company will be successful in the future.

                                       11
<PAGE>

(B)    Purchase of  Pipe Fabrication Shop and Yard
       -------------------------------------------

In September 2008, the Company  entered into a written  agreement with a related
party to purchase a pipe fabrication shop and an adjacent storage yard in Bronx,
New York for $2,500,000.  The Company currently rents this property. The Company
intends to finance a portion of the purchase price. This transaction is expected
to close in December 2008 (see Item 5 of Part II, Other Information in this Form
10-Q).

6.     Recently Issued Accounting Pronouncements
       -----------------------------------------

In December 2007, the FASB issued  Statement No. 141 (revised  2007),  "Business
Combinations" ("SFAS 141-R"). SFAS 141-R changes the accounting for acquisitions
specifically eliminating the step acquisition model, changing the recognition of
contingent  consideration  from being  recognized  when it is  probable to being
recognized  at the  time  of  acquisition,  disallowing  the  capitalization  of
transaction costs and changes when restructurings  related to acquisition can be
recognized.  The  standard is effective  for fiscal years  beginning on or after
December 15, 2008 and will only impact the accounting for acquisitions  that are
made after adoption.

In December 2007, the FASB issued Statement No. 160,  "Noncontrolling  Interests
in Consolidated Financial Statements - an amendment of ARB No. 51" ("SFAS 160").
This statement is effective for fiscal years  beginning on or after December 15,
2008, with earlier adoption prohibited.  This statement requires the recognition
of a noncontrolling  interest (minority  interest) as equity in the consolidated
financial  statements and separate from the Company's equity.  The amount of net
income  attributable  to  the  noncontrolling   interest  will  be  included  in
consolidated net income on the face of the  consolidated  income  statement.  It
also amends certain of ARB No. 51's  consolidation  procedures  for  consistency
with the  requirements  of SFAS 141-R.  This  statement  also includes  expanded
disclosure   requirements   regarding  the  interests  of  the  parent  and  its
noncontrolling  interest. The Company believes the adoption of SFAS 160 will not
have an effect on the Company's  consolidated  financial  position or results of
operations.

In May 2008, FASB issued Statement No. 162, "The Hierarchy of Generally Accepted
Accounting  Principles"  ("SFAS  162").  The  purpose of the new  standard is to
provide a consistent framework for determining what accounting principles should
be used when  preparing  financial  statements  in  conformity  with  accounting
principles generally accepted in the United States of America. Previous guidance
did not properly rank the accounting  literature.  The new standard is effective
60 days  following  the  Securities  and Exchange  Commission's  approval of the
Public Company  Accounting  Oversight  Board  amendments to AU Section 411, "The
Meaning of Present  Fairly in  Conformity  With  Generally  Accepted  Accounting
Principles".  The adoption of SFAS 162 is not expected to have a material effect
on the Company's consolidated financial position or results of operations.

                                       12
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         -----------------------------------------------------------------------
         OF OPERATIONS
         -------------

Results of Operations
---------------------

Revenues

Total revenues for the quarter ended September 30, 2008 increased by $4,500,000,
or 21.4% to  $25,527,000,  as compared  to  $21,027,000  for the  quarter  ended
September 30, 2007.  Total revenues for the nine months ended September 30, 2008
increased by $9,678,000,  or 16.6%, to  $68,016,000,  as compared to $58,338,000
for the nine months ended  September  30, 2007.  This increase in revenues was a
result of the Company's performance on new work as well as work in its backlog.

As of September 30, 2008, the Company had backlog of approximately $117,200,000.
This backlog  amount at September  30, 2008 does not include the contract  value
for  projects  obtained  in  October  2008  which  would  include  the 55  story
residential  tower in Downtown  Manhattan,  valued in excess of $24,000,000,  as
well as revenues from preconstruction  trade management services currently being
provided  on  two  new  hospital  projects.  Approximately  $92,000,000  of  the
September 30, 2008 backlog is not reasonably expected to be completed within the
year ended December 31, 2008. New contracts secured during the remainder of 2008
could also increase 2008 revenues. The amount of backlog not reasonably expected
to be completed in the next fiscal year is subject to various  uncertainties and
risks.  The  Company  continues  to  actively  seek new  projects  to add to its
backlog.

Cost of Revenues

Costs of  revenues  for the  quarter  ended  September  30,  2008  increased  by
$3,636,000, or 20.0% to $21,818,000,  as compared to $18,182,000 for the quarter
ended September 30, 2007.  Costs of revenues for the nine months ended September
30,  2008  increased  by  $8,633,000,  or 17.2% to  $58,828,000,  as compared to
$50,195,000  for the nine months ended September 30, 2007. The increase in costs
of revenues  for the  quarter  and nine months  ended  September  30,  2008,  as
compared to the same periods in 2007, is primarily associated with the increased
revenues.

Gross Profit

Gross profit for the quarter ended September 30, 2008 was  $3,709,000,  or 14.5%
of revenues, as compared to a gross profit of $2,845,000,  or 13.5% of revenues,
for the quarter ended September 30, 2007.

Gross profit for the nine months ended  September  30, 2008 was  $9,188,000,  or
13.5% of  revenues,  as  compared  to gross  profit of  $8,143,000,  or 14.0% of
revenues, for the nine months ended September 30, 2007.

                                       13
<PAGE>

Selling, General and Administrative Expenses

Selling,  general and  administrative  expenses  ("SG&A") for the quarter  ended
September 30, 2008 increased by $284,000, or 23.4% to $1,496,000, as compared to
$1,212,000  for the quarter ended  September 30, 2007.  SG&A for the nine months
ended  September 30, 2008,  increased by $610,000,  or 17.2% to  $4,147,000,  as
compared to $3,537,000 for the nine months ended September 30, 2007.

The increase in SG&A for the three and nine months ended  September 30, 2008, as
compared to the three and nine months ended  September  30, 2007,  was primarily
related to an increase in employment  costs, auto expenses,  professional  fees,
costs associated with the public filings,  and expenses related to the hiring of
an investor relations firm.

Other Income

Other  income,  which  is  primarily  interest  income,  for the  quarter  ended
September  30, 2008 was $94,000,  as compared to $160,000 for the quarter  ended
September  30, 2007.  Other income for the nine months ended  September 30, 2008
was  $300,000,  as compared to $394,000 for the nine months ended  September 30,
2007.  The  decreases in other income for the three and nine month periods ended
September  30,  2008,  as  compared  to the three and nine month  periods  ended
September 30, 2007,  was primarily due to a reduction in the interest rates that
investment accounts were able to earn.

Provision for Income Taxes

The provision for income taxes for the three months ended September 30, 2008 was
$986,000,  as compared to the  provision  for income  taxes of $829,000  for the
three months ended  September  30, 2007.  The provision for income taxes for the
nine months ended September 30, 2008 was $2,106,000,  as compared to a provision
for income taxes of $2,278,000 for the nine months ended September 30, 2007.

The  tax  expense  for the  three and nine months  ended  September 30, 2008 was
lowered by the Company's ability to utilize the Domestic  Production  Activities
Deduction, a  credit  available to qualifying entities in construction and other
industries.

Net Income

As a result of the above  mentioned  items,  the Company  reported net income of
$1,321,000, or $.21 per share-basic and diluted, for the quarter ended September
30, 2008 as compared to reported net income of $964,000, or $.16 per share-basic
and $.15 diluted for the quarter ended September 30, 2007.

For the nine months ended September 30, 2008, the Company reported net income of
$3,235,000,  or $.52 per share-basic and $.51 per share-diluted,  as compared to
reported net income of  $2,722,000 or $.44 per  share-basic  and diluted for the
nine months ended September 30, 2007.

                                       14
<PAGE>

Liquidity and Capital Resources
-------------------------------

General

The Company's  principal capital requirement is to fund its work on construction
projects. Projects are billed monthly based on the work performed to date. These
project  billings,  less a withholding  of  retention,  which is received as the
project nears  completion,  are collectible  based on their respective  contract
terms.  The Company has historically  relied  primarily on internally  generated
funds and bank borrowings to finance its  operations.  The Company has a line of
credit  which is subject to certain  conditions.  The  Company has not relied on
bank borrowings to finance its operation since July 2003.

As of September 30, 2008, total cash and cash  equivalents was  $17,395,000,  an
increase from the $16,581,000 reported as of September 30, 2007. In addition, at
September  30, 2008 the  Company  held  marketable  equity  securities  totaling
$1,561,000 as compared to marketable equity securities  totaling $1,716,000 held
at September 30, 2007.

Cash provided by operations

Net cash  provided  by  operations  was  $2,401,000  for the nine  months  ended
September  30,  2008,  as  compared  to  $2,983,000  for the nine  months  ended
September  30, 2007.  Cash at September 30, 2008 was reduced by the funding of a
greater number of new projects and the payment of increased  employment cost, as
compared to the nine months ended  September 30, 2007.  In addition,  during the
nine months  ended  September  30,  2008,  the Company has  submitted  claims on
certain projects to recoup costs the Company has incurred due to project delays.
There is no assurance that these costs will be reimbursed.  The Company believes
its claims are meritorious.

Cash used in investing activities

Net cash used in  investing  activities  was  $110,000 for the nine months ended
September  30,  2008,  as  compared  to  $1,022,000  for the nine  months  ended
September 30, 2007. The Company purchased property and equipment of $108,000 and
$27,000 during the nine months ended September 30, 2008 and 2007,  respectively.
During the nine months  ended  September  30, 2008 the Company sold fixed assets
which contributed cash proceeds of $11,000.

During the nine months ended September 30, 2008 and 2007, the Company  purchased
marketable securities totaling $31,000 and $1,001,000,  respectively. During the
nine months  ended  September  30, 2008 and 2007,  the Company  sold  marketable
securities which contributed cash proceeds of $18,000 and $6,000, respectively.

Cash used in / provided by financing activities

Net cash used in financing  activities  for the nine months ended  September 30,
2008,  which  includes the dividend  paid on June 17, 2008,  was  $1,128,000  as
compared to net cash provided by financing  activities,  totaling $535,000,  for
the nine months ended September 30, 2007.

                                       15
<PAGE>

During the nine months ended September 30, 2008, two executives, an employee and
a director  exercised  options to purchase an aggregate of 43,501  shares of the
Company's common stock, contributing cash proceeds of $68,000 to the Company.

During the nine months ended  September  30, 2007,  two company  executives,  an
employee,  a director  and a former  director  exercised  options to purchase an
aggregate of 140,416  shares of the Company's  common stock,  contributing  cash
proceeds of $230,000 to the Company.

Prior to adopting SFAS 123-R, the Company  presented all tax benefits  resulting
from the exercise of stock  options as operating  cash flows in the Statement of
Cash Flows. SFAS 123-R requires cash flows resulting from excess tax benefits to
be  classified  as a part of cash flows from  financing  activities.  Excess tax
benefits  represent tax benefits  related to exercised  options in excess of the
associated  deferred tax asset for such  options.  As a result of adopting  SFAS
123-R,  $62,000 and  $305,000 of excess tax  benefits  for the nine months ended
September 30, 2008 and 2007, respectively,  have been classified as an operating
cash outflow and a financing cash inflow.

On April 30, 2008, the Company's Board of Directors  declared a cash dividend of
$.20 per share.  The aggregate  amount of the dividend was  $1,258,000,  and was
paid on June 17, 2008 to shareholders of record as of May 26, 2008.

Credit Facility

The Company has a line of credit  facility  from Bank of  America,  N.A.,  which
provides borrowings for working capital purposes up to $2,000,000. This facility
expires on April 1, 2009, is secured by the Company's assets,  and is guaranteed
by the Company's  subsidiary,  KSW Mechanical Services,  Inc. There have been no
borrowings against this line of credit.

Advances  bear  interest,  at the Company's  option,  at either the bank's prime
lending  rate plus one  percent per annum (6.0% at  September  30,  2008) or the
London Inter-Bank Offered Rate ("LIBOR") plus two and one-half percent per annum
(6.2% at September 30, 2008).

Payment may be  accelerated  by certain  events of default  such as  unfavorable
credit  factors,  the  occurrence of a material  adverse change in the Company's
business,  properties or financial condition,  a default in payment on the line,
impairment of security,  bankruptcy,  or the Company ceasing operations or being
unable to pay its debts.  The line of credit  must be paid in full at the end of
the term.

Other than the Company's  contract to purchase a pipe fabrication shop in Bronx,
New York that the Company is  currently  renting  (see Item 5 of Part II,  Other
Information in this Form 10-Q), the Company currently has no significant capital
expenditure commitments.

                                       16
<PAGE>

Surety

On some of its projects,  the Company is required to provide a surety bond.  The
Company  obtains its surety bonds from Federal  Insurance  Company,  a member of
Chubb Group of Insurance Companies. The Company's ability to obtain bonding, and
the amount of bonding required, is solely at the discretion of the surety and is
primarily based upon the Company's net worth,  working  capital,  the number and
size  of  projects  under  construction  and  the  surety's   relationship  with
management.  The Company is  contingently  liable to the surety  under a general
indemnity agreement. The Company agrees to indemnify the surety for any payments
made on contracts of  suretyship,  guaranty or indemnity  that might result from
the Company not having the financial capacity to complete  projects.  Management
believes the likelihood of the surety having to complete projects is remote. The
contingent liability is the cost of completing all bonded projects,  which is an
undeterminable  amount  because  it is  subject  to  bidding  by third  parties.
Management  believes that all  contingent  liabilities  will be satisfied by the
Company's  performance on the specific  bonded  contracts  involved.  The surety
provides  bonding solely at its discretion,  and the arrangement with the surety
is an at-will arrangement subject to termination.

The Company's  bonding limits have been sufficient  given the volume and size of
the  Company's  contracts.  The  Company's  surety may require  that the Company
maintain  certain  tangible  net  worth  levels,   and  may  require  additional
guarantees if the Company should desire increased  bonding limits.  At September
30, 2008, approximately  $56,000,000 of the Company's backlog of $117,200,000 is
anticipated to be bonded.

Critical Accounting Policies and Estimates
------------------------------------------

There have been no material  changes in the  accounting  policies and  estimates
that  the  Company  considers  to be  "critical"  from  those  disclosed  in the
Company's Annual Report on Form 10-K for the year ended December 31, 2007.

Recently Issued Accounting Pronouncements
-----------------------------------------

See Note (6) to the consolidated  financial statements for a summary of recently
issued accounting pronouncements and their impact on the Company.

Forward-Looking Statements
--------------------------

Certain  statements  contained  in this  report  are not  historical  facts  and
constitute "forward-looking  statements" (as such term is defined in the Private
Securities  Litigation  Reform Act of 1995).  These forward  looking  statements
generally can be identified as statements  that include words such as "believe",
"expect",  "anticipate",  "intend", "plan", "foresee", "likely", "will" or other
similar   words  or  phrases.   Such   forward-looking   statements   concerning
management's expectations, strategic objectives, business prospects, anticipated
economic performance and financial condition,  and other similar matters involve
known and unknown risks,  uncertainties  and other important  factors that could
cause the  actual  results,  performance  or  achievements  of results to differ
materially  from any future results,  performance or  achievements  discussed or
implied by such forward-looking statements. This document describes factors that
could cause actual results to

                                       17
<PAGE>

differ  materially  from  expectations  of the  Company.  All  written  and oral
forward-looking  statements  attributable  to the  Company or persons  acting on
behalf of the Company are  qualified  in their  entirety by such  factors.  Such
risks,  uncertainties,  and  other  important  factors  include,  among  others:
inability to obtain bonding,  inability to retain senior  management,  low labor
productivity  and  shortages  of  skilled  labor,  a rise in the  price of steel
products,  economic  downturn,  the inability of  developers  to secure  credit,
reliance on certain  customers,  competition,  inflation,  the adverse effect of
terrorism  concerns and  activities on public budgets and insurance  costs,  the
unavailability  of private funds for  construction,  and other various  matters,
many of which  are  beyond  the  Company's  control  and  other  factors  as are
described in "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K
for the fiscal  year ended  December  31,  2007 and in Part II,  Item 1A.  "Risk
Factors" in this report. Forward-looking statements speak only as of the date of
the document in which they are made.  Other than required by applicable law, the
Company  disclaims  any  obligation  or  undertaking  to provide  any updates or
revisions  to any  forward-looking  statements  to  reflect  any  changes in the
Company's expectations or any changes in events,  conditions or circumstances on
which the forward-looking statements are based.

ITEM 3.  QUANTITITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
         ------------------------------------------------------------

The Company does not utilize futures,  options or other derivative  instruments.
As of September  30, 2008,  the Company has invested  $1,561,000  in  marketable
securities.

ITEM 4.  CONTROLS AND PROCEDURES
         -----------------------

The  Company  carried  out an  evaluation,  under the  supervision  and with the
participation  of management,  including our Chief  Executive  Officer and Chief
Financial  Officer,   of  the  effectiveness  of  our  disclosure  controls  and
procedures (as defined in Rules  13a-15(e) and 15d-15(e) under the Exchange Act)
as of September 30, 2008. Based on that evaluation,  our Chief Executive Officer
and  Chief  Financial  Officer  concluded  that  our  disclosure   controls  and
procedures were effective as of September 30, 2008.

There  has been no change  in the  Company's  internal  control  over  financial
reporting (as defined in Rules  13a-15(f) and 15d-15(f)  under the Exchange Act)
during the Company's  quarter  ended  September  30, 2008,  that has  materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.

PART II - Other Information
---------------------------

Item 1.  Legal Proceedings

None

Item 1A. Risk Factors

The entire country is experiencing a credit crisis and an economic downturn, the
duration

                                       18
<PAGE>

and extent of which cannot be determined  at this time.  While this downturn may
have a material adverse effect on construction throughout the country, including
New York City, it has not yet effected our  operations  or results.  Most of our
customers  are major  developers  and, to the  Company's  knowledge,  all of its
current projects are adequately funded.  While all of the Company's projects are
proceeding,  it is  impossible to determine  whether the economic  downturn will
have a material adverse effect in the future.

One result of the economic  situation  is the decline in prices of  commodities,
such as steel pipe products. The Company has determined that it is not currently
prudent to enter into a long term purchase agreement for such commodities, as it
had utilized in the past.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Submission of Matters to a Vote of Security Holders

None.

Item 5.  Other Information.

Since its  inception,  the  Company  has rented a pipe  fabrication  shop and an
adjacent storage yard, located in the Bronx, New York (the "Property"), from the
Company's  Chief  Executive  Officer  and a  charitable  foundation  he controls
(together,  "the Owner"). The Owner advised the Company that it intended to list
the Property for sale. The Company's Board of Directors requested and received a
right of first  refusal.  In July  2008,  the  Owner  received  three  offers to
purchase the Property, the highest being a written offer of $2,650,000,  without
a mortgage  contingency.  The Owner then  offered  to sell the  Property  to the
Company for $2,500,000.

The Company engaged a broker to determine the  availability and costs of leasing
an alternative  facility,  and performed an economic  analysis  comparing  those
costs with the costs to purchase the Property. The Board of Directors determined
that it was economically  advantageous for the Company to purchase the Property.
By  Resolution  dated  August 7,  2008,  the four  Independent  Directors  voted
unanimously to purchase the Property.

In September 2008, the Company entered into a written  agreement to purchase the
Property  for a total  purchase  price of  $2,500,000.  The  Company  intends to
finance a portion of the purchase price.  This  transaction is expected to close
in December 2008.

                                       19
<PAGE>

Item 6.  Exhibits

      Exhibit 11 - Statement regarding Computation of  Earnings  per  Share (see
      Note 4 to  the  Consolidated  Financial  Statements  included elsewhere in
      this Report)

      Exhibit 31.1 - Certification of Chief Executive  Officer  required by Rule
      13a-14(a)

      Exhibit 31.2 - Certification of Chief Financial  Officer  required by Rule
      13a-14(a)

      Exhibit 32.1 - Certification of Chief Executive  Officer  required by Rule
      13a-14(b) and 18 U.S.C. Section 1350

      Exhibit 32.2 - Certification of Chief Financial  Officer  required by Rule
      13a-14(b) and 18 U.S.C. Section 1350

                                       20
<PAGE>

                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                            KSW, INC.

Date:  November 5, 2008
                                            /s/Richard W. Lucas
                                            ----------------------
                                            Richard W. Lucas
                                            Chief Financial Officer

                                            (Principal Financial and Accounting
                                            Officer and Duly Authorized Officer)

                                       21
<PAGE>

                                    KSW, INC.

                                INDEX TO EXHIBITS

Exhibit Number                            Description
--------------                            -----------

   11             Statement  Regarding  Computation  of Earnings  per Share (see
                  Note 4  to  the  Consolidated  Financial  Statements  included
                  elsewhere in this Report)

   31.1           Certification of  Chief  Executive  Officer  required  by Rule
                  13a-14(a)

   31.2           Certification of Chief  Financial  Officer  required  by  Rule
                  13a-14(a)

   32.1           Certification of Chief  Executive  Officer  required  by  Rule
                  13a-14(b) and 18 U.S.C. [SEC] 1350

   32.2           Certification of Chief  Financial  Officer  required  by  Rule
                  13a-14 (b) and 18 U.S.C. [SEC] 1350

                                       22