Progress work package on chain: automatic payment and incentive collaboration
PI: Dr LI Xiao
Abstract:
Construction progress payments are critical to successful project delivery and stakeholders’ financial well-being. However, the construction industry has long struggled with delayed and missed payments. Although increased access to digital progress data offers potential benefits for payment automation, it still frequently relies on accurate valuation of work packages (i.e., deliverables) and trustworthy documentation. Furthermore, a theoretical dilemma exists between paying smaller work packages to enhance the cash flows of payees and larger work packages for economies of scale of payors. For example, configuring smaller work packages increases the granularity of the progress payment and is more precise about how much disbursement should be paid to each completed work. However, it increases the administrative burden and dispute frequency. Paying larger work packages can achieve economies of scale (e.g., less financial cost and accounting frequency), but it increases late payment risks, reduces trust, and discourages productivity. This project, thus, proposes a blockchain multi-modal adaptive work package (BC-MAWP) approach to resolve the dilemma. We first model the multi-modal progress data as adaptive graphs to form MAWP for payment automation. Second, studying Blockchainextends the MAWP model from a local system to stakeholder networks for incentive collaboration. Finally, BC-MAWP also offers blockchain oracles and plugins for mainstream financial management systems so that BC-MAWP can work in a trustworthy, seamless, and non-disruptive way.