Blockchain and the Construction Industry

What is BIM? 

Building Information Modeling, known in the industry as BIM, first emerged around 2002 and has rapidly increased openness and collaboration in the construction industry.

BIM is a catch-all term for a range of software that allows multiple parties to access digital representations of projects’ physical and functional characteristics. BIM is information and technology that creates a  digital representation of a project that integrates data from many sources. It evolves in parallel with the real project across its entire timeline, to form a reliable basis for decisions during its life-cycle; defined as existing from earliest conception to demolition. According to CryptoInsider

BIM is not just a 3D blueprint – it captures a project’s geometry, spatial relationships, light factors, building materials data, time and even costs. As such, it involves data input from not only engineers and designers, but also landscapers and other experts.

In respect of the term smart cities and urban tech,  BIM is one of the main generators of the embedded digital information required to achieve connected cities. more smart building sensors, and enhanced IoT capabilities.  Contractors' understanding of how people really use the built environment (and their own projects) will improve beyond anything previously imagined.

How can blockchain technology improve the efficiencies of BIM? 

As more and more contractors incorporate BIM to save time and costs, more people and teams are working on the same model. This brings up a great opportunity to incorporate blockchain's decentralized ledger system to manage these various inputs. With blockchain, owners of the BIM model would have tamper proof and time-stamped data. 

In addition, blockchain enables a common data environment and improvements in the field of Automated Dispute Resolution and automated compliance. A common data environment is a digital space that everyone on your team has access to and can be easily subdivided into certain areas. Learn more about common data environments in this video: 

This is useful in construction because, on any given project, massive amounts of unstructured, poorly coordinated data are produced, raising costs by what some estimate is between 20% and 25%. With a blockchain enabled common data environment, various teams can work in their own "Work in Progress Areas" and then subsequently move that data into a shared area for other parties to access. With blockchain, the ownership and power to edit remain with the original creator of the file. 

This enables companies to move from Level 1 BIM to Level 2 BIM. 

BIM Levels Explained*

BIM Level 1: This is the level at which many organisations are currently operating. This typically comprises a mixture of 3D CAD for concept work, and 2D for drafting of statutory approval documentation and Production Information. CAD standards are managed to BS 1192:2007, and electronic sharing of data is carried out from a common data environment (CDE), often managed by the contractor. Models are not shared between project team members.




BIM Level 2: This is distinguished by collaborative working – all parties use their own 3D CAD models, but not necessarily working on a single, shared model. The collaboration comes in the form of how the information is exchanged between different parties – and is the crucial aspect of this level. Design information is shared through a common file format, which enables any organisation to be able to combine that data with their own in order to make a federated BIM model, and to carry out interrogative checks on it. Hence any CAD software that each party used must be capable of exporting to one of the common file formats such as IFC (Industry Foundation Class) or COBie (Construction Operations Building Information Exchange). This is the method of working that has been set as a minimum target by the UK government for all work on public-sector work, by 2016.

BIM Level 3: Currently seen as the holy grail, this represents full collaboration between all disciplines by means of using a single, shared project model which is held in a centralized repository. All parties can access and modify that same model, and the benefit is that it removes the final layer of risk for conflicting information. This is known as ‘Open BIM’. Current nervousness in the industry around issues such as copyright and liability are intended to be resolved – the former by means of robust appointment documents and software originator/read/write permissions, and the latter by shared-risk procurement routes such as partnering. The CIC BIM Protocol makes provision for these.

Sample BIM model

Sample BIM model

Other Potential Blockchain Applications in Construction

Smart contracts are one of the other commonly discussed potential use cases for blockchain technology in construction. Construction consultant Dave Hughes writes about this potential in a post on Medium: 

Smart Contracts: A Smart Contract is a computer programme that works on the if / then principle. In this way the contracts are administered. So if the painter has painted the wall then he requests it’s inspected. If the person responsible for inspecting the work agrees it’s acceptable quality then the painter gets paid. Smart Contracts can be used for each of these if / thenscenarios and recorded on the Blockchain (and can be collateralised with cryptocurrency). This all happens securely because of the use of cryptography in Blockchains to store transactions in Blocks of data that are replicated on multiple servers/computers around the world.
Another example is the delivery of goods allowing clients to buy directly from the supplier because the Smart Contract can provide more trust in the transaction. Payment to a supplier can be staggered and liability transferred to different parties. Take for example a piece of mechanical plant. A client could purchase direct from the supplier, pay a portion of the cost when it’s verified the plant has left port in the origin country, transfer liability to the shipping company, release further payment when the plant arrives on site, again transferring liability, this time to the contractor responsible for installation. Then final payment can be issued once the plant has been installed and commissioned.
All these stages can be stored on the Blockchain and provide more opportunity for direct transactions without the need for middlemen.

The Adoption of Blockchain 

As more firms adopt BIM and Smart Contracts, more contractors will be forced to utilize the technology. The blockchain is the best tool currently available for managing and recording changes to BIM, which in turn makes the process faster and more efficient. Books and guides are already being written about BIM techniques to make buildings more green and sustainable.

But, the biggest incentive to move toward blockchain enabled BIM and Smart Contracts could be the ability to quickly audit costs, labor practices, and sourcing. These things make construction both more efficient but also more ethical. 

-Charles LaCalle, Dreamit UrbanTech

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