What to Consider as New Tech Enters the Construction Industry

By Brandon B. Rothey and Joshua R. Lorenz

It might not seem like a natural fit, at first, but the technology behind-the-scenes of the cryptocurrency Bitcoin, blockchain, is on the cusp of finding a place in the construction industry.

Blockchain is essentially a digital and distributed record of data, using “blocks” of information connected by “chains” that show the work between blocks. The technology is already transforming the supply chain and financial sectors, and it has as-yet unrealized potential in construction, concerning contracts, design processes and more.

But laws are not necessarily keeping pace with these rapidly changing developments, making it critical to consider, alongside the promise of new technology, the potential pitfalls that come with its use on a project.

How smart contracts might help builders

The “smart contract” built with blockchain technology has future potential in the construction industry and can allow for easy verification and administration of contracts, as well as streamlined payment and claim procedures. Being written in code, these types of contracts can be partially or fully self-executing and self-enforcing.

In construction, the unique aspects of each project often render using a one-size-fits-all approach to contracting difficult. Changes to the contract documents, the project schedule and the like can become unwieldy on bigger jobs, and with more dollars at stake, smart contract technology is likely to find its place in the construction industry, beginning with larger projects.

How blockchain can help BIM

One area in construction where an innovative technology already is being used is known as building information modeling (BIM), a process in which an intelligent, three-dimensional model-based design of a project is built digitally to ensure accuracy in construction and limit errors. It’s an especially exciting technology for architects because it catches interference among various shop drawings which otherwise may not be obvious until construction.

With BIM, alterations to a design can be seen as they happen, and any errors should be caught in the digital space before they get to the worksite. In the field, blockchain technology may allow for easier tracking and coordination among the different trades using BIM for a project as the project is built.

How to protect yourself

The more people with access to technological information, and the more a project relies upon new technology, the more opportunities there are for a cyberthreat. The more project participants having access to the BIM, for example, the more opportunities there are for scamming and cyber deception. In smart contracts, too, a simple bug or typo in the code can create risks. As long as humans and technology interface, the potential for human error will exist.

If a party is dealing with data in any appreciable way, in addition to implementing appropriate IT protections and protocols, they should consult not only with an attorney to review and draft contract language to protect the party from liability for cyber risk, but they also should look into getting appropriate cybersecurity insurance to cover any losses.

For more information on how construction professionals prepare for these and other future industry changes, contact attorney Brandon Rothey or Joshua Lorenz. Links to their contact information is included below.