by Dave Hughes, Construction Consultant interested in Tech, BIM and the Blockchain
Collaboration is one of the most overused terms in construction. We can’t just expect that people will do it, just because they’re asked. They need to be supported, it needs to be easy, and they must be continuously incentivised.
The support could come in the form of a framework that provides transparency of who has done work associated with a construction project. That could be work completed on site or as part of the design process. This transparency acts as an incentivising stick and carrot. The stick is there’s no hiding behind ambiguity, people must be responsible for their part in the project. The carrot is the other side of the coin. If you do good work which is clearly yours, you get recognised for adding real value and get invited to more project teams. To make this framework practical, it must also be self policing by creating an immutable trust layer backing up the process.
One issue that we could begin to tackle by creating this framework is ‘Lack of Collaboration & Improvement Culture’ which is identified in the The Farmer Review. If what I’m proposing works, it could also go someway to reducing some other issues discussed in the Farmer Review, ‘Workforce Size and Demographics’ and ‘Low Productivity.’
Over the years the construction industry has been affected by aggressive procurement practices, risk aversion and insurance requirements. This has resulted in a misalignment of client and industry interests. An example relating to insurance can be witnessed if you’ve been in the room with a design team looking at a problem which requires a coordinated solution when it’s unclear who will be responsible for that final solution. The designers minds are on their company Professional Indemnity insurance, and balancing that with what is best for the project. I’d go as far to say, that the companies who the individuals work for are sometimes the biggest barrier to project collaboration — the needs of the company provide a structural disincentive to collaboration. If the industry is to embrace BIM Level 3, which requires all members to work on a shared BIM, then we need to rethink the way a project team is structured and the way a project is insured.
Combining Building Information Modeling (BIM) with blockchain and embracing a better method of delivering projects can provide the transparency and incentivised collaboration described above. By introducing blockchain to the construction process it will have further advantages beyond keeping a record of who did what on a construction project.
In my opinion, Integrated Project Insurance (IPI) creates the contractual environment that incentivises a team to work for the good of the project. IPI is an insurance product and a framework that creates a collaborative environment by agreement of key team members, called an Alliance. The key to all this is that IPI insures the entire project. There is no additional Professional Indemnity or Builder’s All Risk insurance required on an IPI project. For the purposes of the project, the Alliance team are all part of one, temporary, project-organisation and they are unable to sue one another. Members are working for a pain/gain share, which they are incentivised to protect. Pain/gain and project bank accounts are things that have been used in the past. However, the creators of IPI seems to have recognised that an uncompromised, collaborative structure is what is needed. IPI is currently being trialled. The Dudley College project has recently completed and the Derby Silk Mill project is due to start on site soon, I look forward to seeing how it develops.
The biggest potential impact blockchain will have on the construction process is digital payments. This also fits neatly with the IPI requirement for the transparency provided by a project bank account. The old adage of ‘follow the money’ is the backbone to the self policing framework I’m suggesting. By using blockchain smart contracts, that are tied to the building and sub contracts an immutable record will be created of who carried out work and who approved that work on the payment process. All the way from the tradesman that carried it out right up the approvals process from foreman, site manager, contractor’s QS, client’s QS, contract administrator and finally, payment by the client.
Introducing blockchain also opens up opportunities for verifiable Digital ID’s to increase trust between client and and their project / supply team. It can do this by verifying the correct qualifications are in place. For example; a current CSCS card, security clearance and membership to the correct certifying body, etc.
This logic of tracking physical work can also apply to the digital building in the BIM. Blockchain can support BIM Level 3 processes by tracking the provenance of design input. A company called BimSense is working on this blockchain backed BIM data idea at the moment. This will mean an immutable record of who added what to the digital asset. This may not reduce the number of disputes but it will surely clean up the process of making an adjudication of them. It also further enforces the idea of the individual as the holder of their specific project input.