Automation of Construction Progress Payments Using BIM and Blockchain Based Framework

Abstract

The construction industry worldwide is rampant with poor payment practices where parties fail to conform to the payment provisions resulting in late or nonpayment. Payment defaults cause a startling effect on the project's health and cause a project to fail. The administrative and contractual solutions are ineffective due to the administrative burden associated with human-intensive processes. This paper presents a blockchain-based payment system to circumvent the traditional payment system's vulnerability using Blockchain, BIM, and cryptocurrency technologies through a Decentralized Application (DApp). An end-to-end system, based on payment conditions coded as a smart contract, was devised to initiate the payment process, generate invoices, and transfer payments from the client to the contractor. A Building information model (BIM) integrated with schedule and pricing information provides the cost and time data for calculating payment amount based on the amount of work done till a particular time subject to a sufficiency check of the contract. Invoices were extracted from BIM and pushed to DApp for payment of the amount, in cryptocurrency, to the contractor digitally on the Ethereum blockchain. The developed system was validated via a case study on an actual construction project. It is observed that the proposed application, which is based on blockchain, can integrate the benefit of smart contracts, BIM, and crypto technologies. It provides the ability to address the overwhelming issues regarding payment security, auditing, and financial discrepancies in a construction project. The developed system also expedites payment, minimizes the need for liaisons, and makes the process digitized, efficient, and seamless.