Putting E-topia on the map

When I wrote, in January, about the Electronic Communications Bill, it was still in relative infancy. Now, it is almost an act of parliament, and there is plenty of talk as to how the building industry is embracing e-commerce. It is time to look ahead to some of the ways that contractual relationships may evolve in the world of e-construction.

For example, take the interaction of two elements of new technology. First, extranets, which connect all the participants in a project in a single loop. This will mean that they can share as much design information as they wish, as soon as that information is produced.

Second, we have the increasing use of 3D modelling and the standardisation of modelling software. Soon, all participants will be able to receive, read and, if appropriate, help develop 3D models. Since this will mean that everyone involved can be aware of what everyone else is doing, they will be alerted if the plans of others would cause them problems.

Under JCT98, the discovery of discrepancies in documents, or divergences between them can result in the contractor being entitled to extensions of time, and also to payment to compensate for loss and expense. Once it is possible to build significant parts of the building “virtually”, it may be possible to discover such discrepancies and resolve arguments over their cost and time implications before starting on site. In cases where the model is available early enough, a resolution might even be built into the contract. Given that a problem that is apparent on paper (or computer data) may not actually occur on site, there might be some evolution in contractual terms, particularly in those clauses that provide for different contingencies. In other words, there might be one price and programme if the expected difficulties materialise, and an alternative price and programme if they do not.

Given that there are always some post-commencement scope changes, whether by necessity, by client choice or for some other reason, the opportunities provided by e-commerce might mean that a contractor is able to resolve discrepancies more efficiently – so saving the client money.

•  Emerging IT will allow the discovery of problems at design stage
•  This will enable disputes to be resolved before work begins on site, and will make that resolution cheaper

For example, it is said that the Internet can cut out most of the time now spent by contractors sending enquiries to their suppliers by phone or fax, waiting for a response, evaluating the information and then making a decision. The Internet may provide this information in hours rather than days. Moreover, it should give access to a vastly greater number of suppliers.

On the assumption that there will be programs that will not only search for this information, but automatically evaluate it to provide the optimum balance between price, availability and suitability, contractors will have time to obtain reliable and detailed information before they have to implement scope changes.

If all parties are confident that the information obtained before implementation of the scope change is as reliable as the information that they would be able to gather even if they were to defer doing so until after implementation, then perhaps it will be possible for them to agree the financial and time consequences of scope changes in advance, thereby reducing areas for later disputes.