Integrated building information modeling and blockchain system for decentralized progress payments in construction projects

Purpose The debate around automation through digital technologies has gathered traction in line with the advancement of Industry 4.0. Blockchain-powered construction progress payment has emerged as an area that can benefit from such automation. However, the challenges inherent in real-time construction payment processes cannot be solely mitigated by blockchain. Including building information modeling (BIM)-based schedule information stored in decentralized storage linked with a smart contract (SC) can allow the efficient administration of payments. Accordingly, this study aims to present an integrated BIM-blockchain system (BBS) to administer decentralized progress payments in construction projects. Design/methodology/approach A mixed-method approach is adopted, including an extensive literature review, development of the integrated BBS, and a case study with 13 respondents to test and validate the BBS. This study proposes a BBS that extracts the invoices from BIM and pushes them to the decentralized app (dApp) for digital payment to the contractor through the Ethereum blockchain. The Solc npm package was used to compile the backend SC. Next.js was used to create the front end of the dApp. The Web3 npm package is paramount in developing a dApp. A total of 13 construction professionals working on the case study project were engaged through a questionnaire survey to comment on and validate the proposed BBS. A descriptive analysis was conducted on the case study data to apprehend the responses of expert professionals. Findings The proposed BBS creates an SC, enables sender verification, checks contract complaints, verifies bills, and processes the currency flow based on a coded payment logic. After passing the initial checks, the bill amount is processed and made available for the contractor to claim. Every activity on dApp leaves its trace on the blockchain ledger. A control mechanism for accepting or rejecting the invoice is also incorporated into the system. The case study-based validation confirmed that the proposed BBS could increase payment efficiency (92.3%), tackle financial misconduct (84.6%), ensure transparency and audibility (92.4%), and ensure payment security (61%) in construction projects. A total of 46.2% of respondents were skeptical of the BBS because of its dependency on cryptocurrencies. A further 23.1% of respondents indicated that the price fluctuation of cryptocurrencies is a major barrier to BBS adoption. Others highlighted the absence of legal frameworks for cryptocurrencies’ usage. Originality/value This study opens the avenue for the application of dApp for autonomous contract management and progress payments, which is flexible with applications across various construction processes. Overall, it is a potential solution to the endemic problem of cash flow that has devastating consequences for all project stakeholders. This is also aligned with the goals of Industry 4.0, where process automation is a key focus. The study provides a practice application for automated progress payments that can be leveraged in construction projects across the globe.