Automated Payment and Contract Management in the Construction Industry by Integrating Building Information Modeling and Blockchain-Based Smart Contracts
Construction projects usually involve signing various contracts with specific billing procedures. In practice, dealing with complex contract structures causes significant problems, especially with regard to timely payment and guaranteed cash flow. Furthermore, a lack of transparency leads to a loss...
| Main Authors: | , , , , , , , , , |
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| Format: | Article |
| Language: | English |
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MDPI AG
2021-08-01
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| Series: | Applied Sciences |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2076-3417/11/16/7653 |
| _version_ | 1827685912058789888 |
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| author | Katharina Sigalov Xuling Ye Markus König Philipp Hagedorn Florian Blum Benedikt Severin Michael Hettmer Philipp Hückinghaus Jens Wölkerling Dominik Groß |
| author_facet | Katharina Sigalov Xuling Ye Markus König Philipp Hagedorn Florian Blum Benedikt Severin Michael Hettmer Philipp Hückinghaus Jens Wölkerling Dominik Groß |
| author_sort | Katharina Sigalov |
| collection | DOAJ |
| description | Construction projects usually involve signing various contracts with specific billing procedures. In practice, dealing with complex contract structures causes significant problems, especially with regard to timely payment and guaranteed cash flow. Furthermore, a lack of transparency leads to a loss of trust. As a result, late or non-payment is a common problem in the construction industry. This paper presents the concept of implementing smart contracts for automated, transparent, and traceable payment processing for construction projects. Automated billing is achieved by combining Building Information Modeling (BIM) approaches with blockchain-based smart contracts. Thereby, parts of traditional construction contracts are transferred to a smart contract. The smart contract is set up using digital BIM-based tender documents and contains all of the relevant data for financial transactions. Once the contracted construction work has been accepted by the client, payments can be made automatically via authorized financial institutions. This paper describes the framework, referred to as BIMcontracts, the container-based data exchange, and the digital contract management workflow. It discusses the industry-specific requirements for blockchain and data storage and explains which technical and software architectural decisions were made. A case study is used to demonstrate the current implementation of the concept. |
| first_indexed | 2024-03-10T09:01:07Z |
| format | Article |
| id | doaj.art-2ed85e6df96044a4802561041c2850df |
| institution | Directory Open Access Journal |
| issn | 2076-3417 |
| language | English |
| last_indexed | 2024-03-10T09:01:07Z |
| publishDate | 2021-08-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Applied Sciences |
| spelling | doaj.art-2ed85e6df96044a4802561041c2850df2023-11-22T06:44:57ZengMDPI AGApplied Sciences2076-34172021-08-011116765310.3390/app11167653Automated Payment and Contract Management in the Construction Industry by Integrating Building Information Modeling and Blockchain-Based Smart ContractsKatharina Sigalov0Xuling Ye1Markus König2Philipp Hagedorn3Florian Blum4Benedikt Severin5Michael Hettmer6Philipp Hückinghaus7Jens Wölkerling8Dominik Groß9Chair of Computing in Engineering, Department of Civil and Environmental Engineering, Ruhr-Universität Bochum, 44801 Bochum, GermanyChair of Computing in Engineering, Department of Civil and Environmental Engineering, Ruhr-Universität Bochum, 44801 Bochum, GermanyChair of Computing in Engineering, Department of Civil and Environmental Engineering, Ruhr-Universität Bochum, 44801 Bochum, GermanyChair of Computing in Engineering, Department of Civil and Environmental Engineering, Ruhr-Universität Bochum, 44801 Bochum, GermanyChair for Software Engineering, Faculty of Business Administration and Economics, University of Duisburg-Essen, 45127 Essen, GermanyChair for Software Engineering, Faculty of Business Administration and Economics, University of Duisburg-Essen, 45127 Essen, GermanyChair for Software Engineering, Faculty of Business Administration and Economics, University of Duisburg-Essen, 45127 Essen, GermanyChair for Software Engineering, Faculty of Business Administration and Economics, University of Duisburg-Essen, 45127 Essen, GermanyAdesso SE, Willy-Brandt-Straße 1, 20457 Hamburg, GermanyKapellmann und Partner Rechtsanwälte mbB, 40219 Düsseldorf, GermanyConstruction projects usually involve signing various contracts with specific billing procedures. In practice, dealing with complex contract structures causes significant problems, especially with regard to timely payment and guaranteed cash flow. Furthermore, a lack of transparency leads to a loss of trust. As a result, late or non-payment is a common problem in the construction industry. This paper presents the concept of implementing smart contracts for automated, transparent, and traceable payment processing for construction projects. Automated billing is achieved by combining Building Information Modeling (BIM) approaches with blockchain-based smart contracts. Thereby, parts of traditional construction contracts are transferred to a smart contract. The smart contract is set up using digital BIM-based tender documents and contains all of the relevant data for financial transactions. Once the contracted construction work has been accepted by the client, payments can be made automatically via authorized financial institutions. This paper describes the framework, referred to as BIMcontracts, the container-based data exchange, and the digital contract management workflow. It discusses the industry-specific requirements for blockchain and data storage and explains which technical and software architectural decisions were made. A case study is used to demonstrate the current implementation of the concept.https://www.mdpi.com/2076-3417/11/16/7653smart contractsblockchainautomated paymentconstruction managementconstruction contractsBIM |
| spellingShingle | Katharina Sigalov Xuling Ye Markus König Philipp Hagedorn Florian Blum Benedikt Severin Michael Hettmer Philipp Hückinghaus Jens Wölkerling Dominik Groß Automated Payment and Contract Management in the Construction Industry by Integrating Building Information Modeling and Blockchain-Based Smart Contracts Applied Sciences smart contracts blockchain automated payment construction management construction contracts BIM |
| title | Automated Payment and Contract Management in the Construction Industry by Integrating Building Information Modeling and Blockchain-Based Smart Contracts |
| title_full | Automated Payment and Contract Management in the Construction Industry by Integrating Building Information Modeling and Blockchain-Based Smart Contracts |
| title_fullStr | Automated Payment and Contract Management in the Construction Industry by Integrating Building Information Modeling and Blockchain-Based Smart Contracts |
| title_full_unstemmed | Automated Payment and Contract Management in the Construction Industry by Integrating Building Information Modeling and Blockchain-Based Smart Contracts |
| title_short | Automated Payment and Contract Management in the Construction Industry by Integrating Building Information Modeling and Blockchain-Based Smart Contracts |
| title_sort | automated payment and contract management in the construction industry by integrating building information modeling and blockchain based smart contracts |
| topic | smart contracts blockchain automated payment construction management construction contracts BIM |
| url | https://www.mdpi.com/2076-3417/11/16/7653 |
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