Laing, Bovis, Balfour Beatty, Amec and Kvaerner to create paperless supply chain through on-line service.
Five major contractors are in discussions to set up the first industry-wide e-commerce venture.

Laing, Bovis Lend Lease, Balfour Beatty, Amec and Kvaerner are understood to be behind the Internet initiative, which could lead to paperless trading in the construction supply chain.

  The five have been in discussions since December. The initiative, which is still in an embryonic stage, is intended to create an electronic marketplace for contractors and their suppliers.

A project source said: "All aspects, from tendering to ordering to invoicing, would then be facilitated over the net. It could also provide a shop window for clients." Other sources said the contractors were setting up the venture to ensure that they get the service that best suits the needs of the industry, rather than waiting for an outside organisation to launch an e-commerce product.

The contractors are expected to find some of the money to set up the venture, as well as seeking backing from banks. Running costs will be met by subscribers, which will pay to use it.

"It is intended to be an open forum. It will be open to any legitimate members of the industry," said a project source.

Although the contractors are committing resources to the on-line service, their primary motive is not to make money from operating it. Project sources say a more important objective is to reduce the cost of their operations and boost the efficiency of the construction process.

Project sources also stressed that the major contractors would not be using the Internet to pool their buying power.

The technology is definitely there to make it happen

Project source

No timescale has been put on the development of the venture. "The technology is there to make it happen. We are just trying to define what specific aspects it needs to service the needs of the industry," said a source.

One possibility is that the service could make it easier for project teams to exchange and store project information electronically.

The group is understood to be asking for advice from a number of consultants. One of these is Interlock, which administers the Construction Industry Trading Electronically organisation. Interlock is part of a trading group that is setting up a construction portal, to be called, which it hopes will be used by the contractors.

  • A Swedish IT firm claims that housebuilders can save up to 30% on materials ordered through its web site, which goes on-line in Britain this month. launched its site in Scandinavia last June.

It offers connections to suppliers of windows, doors and white goods. The customer pays a fee of 2-3% on the value of each purchase.