E-COMMERCE AND THE CONSTRUCTION CONTRACT
By Attorney Elias M. Gordan
(Part 2 in a series of "E-Construction" articles)
THE INTERNET PLAN ROOM
©2001 Attorney Elias M. Gordan. All rights reserved.
One of the more nerve-wracking stages of a construction project is the bidding stage, which starts when the Owner solicits bids for a project, and ends when the bids are opened. Within a very compressed period of time (days or weeks), a bidder must obtain copies of the plans and documents, solicit subcontractor and supplier bids, incorporate the subcontractor/supplier bids into its own bid, and submit its bid before the deadline. Often, a contractor must travel to a variety of locations to pick up plans and documents, at great time and expense. Then, the data in the plans/documents must be incorprated into estimating/planning software, and the propoals put together. The day or two before a bid deadline is usually a flurry of faxes, rush-mailings, and papers flowing back and forth between contractors, suppliers, subcontractors, and the owner. Addenda or changes to the bid documents, made by the owner or designer, add to the suspense and tension.
The Internet plan room proposes to simplify the process a bit, by taking plans and construction documents, and posting them in a secured Website, open only to invited bidders and their authorized subcontractors. Now, contractors can obtain plans for bid anytime, anywhere, as long as they have access to a computer connected to the Internet. Conversely, owners and designers can make addenda and changes to bid documents, and simultaneously notify all interested parties in an instant
As expected, there is a lot more here than first meets the eye. Technical issues:
- Who is proposing this service (owner, designer, third party), and do they have the wherewithal (technical, financial, managerial, support) to handle it?
- Will the plan-room servers be able to handle the crush of traffic on/near bid day without crashing?
- Do contractors, subs, and suppliers have the Internet connections and bandwidth able to download large drawing files? Many services require a DSL, cable-modem, or T-1 line. DSL and cable-modem are still unavailable in many areas (even around major cities), and are being hobbled by regulatory squabbles, infrastructure upgrades, and provider bankruptcies. Some services claim to compress files to allow dial-up access.
- How will electronic format compare to CD-ROM?
- How much will it cost to print out the documents into a paper format, for mark-up and archiving? Think of how much toner/ink cartridges will cost, and how often you will have to be changing them.
- How easy will the electronic documents be to use? Will they be as reliable as hard copy?
- Can the documents be broken out by trade?
- Can the plans be scaled?
- Who has to scan the plans and documents into electronic format?
And, of course, there are a ton of legal issues.
- What State's law will control the plan room?
- Will designers permit posting of their copyrighted plans and documents on the Internet? Think Napster.
- Have proper copyright permissions been obtained for the posting and use of everything in the plan room?
- Who will be responsible if something goes wrong? What if the server crashes the day before bid opening?
- Will designers and others permit incorporation of their copyrighted plans and documents into contractor software? If not, a major advantage of the Internet plan room is being lost, since data will still have to be entered manually into estimating and other software.
- Will the technology behind Internet plan rooms be preempted by business method patents on the technology?
- How will pre-bid contractor inquiries be handled, particularly in public bid settings?
- How will proprietary contractor/sub/supplier information, submitted through the Internet plan room, be protected from third parties? Does the Internet plan room website have a privacy policy?
- Who gets the data on how the plan room is used?
- How, and over what time frame, will the Internet plan room be shut down?
While Internet plan rooms are still in their infancy, we can expect to see more of them over time, either as a stand-alone feature, or as part of a project extranet or "project website". Many plan rooms will not be used, and many will fail, but the concept is here to stay. The construction industry, the construction contracts, and the law will just have to adapt to this.
As always, please contact us if you have further questions.
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DISCLAIMER
The information contained in this guide is meant only to convey general information, and is not intended to serve as legal advice or counsel, nor is it meant to create an attorney-client relationship. The information presented here is subject to change or modification that any time without notice, and may not apply to the specific facts of your case. Accordingly, you should check with a with an attorney before acting on this information, to make sure that it applies to your situation.
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