SOUTH BEND, Ind.--(BUSINESS WIRE)--With the U.S. Senate passage of the infrastructure bill, the construction industry outlook is bright. In a February 3, 2021, Moody’s Investor Report, it was stated that a “multiyear federal infrastructure investment bill will boost U.S. construction spending growth by about 200 basis points 9-12 months after being passed.” The news about the potential construction growth is music to the ears of PrairieDog, a novel construction innovation hub and technology provider. In August of 2021, the company began working with blockchain innovator SIMBA Chain to develop smart contract-based solutions that help the construction industry eliminate transactional waste by improving traditional business processes, removing contentious contracts, and embracing digital transformation.
SIMBA Enterprise Platform (SEP), which has been embraced by the U.S. Government, businesses, and academia, was deployed by PrairieDog to create smart contract-based solutions which can be applied to traditional two-party or multiparty construction contracts.
PrairieDog CEO, Pete Dumont, said, "Our industry generally suffers from around 5% 'contract leakage,' costly claims and disputes, and inefficient contract administration work processes. The invoicing process is still largely manual. We need transactional certainty."
Smart contracts help capture the payable events digitally, process transactions and payments automatically, record them on an immutable blockchain, provide a single source of truth for all parties, and reduce transactional waste. By applying smart contracts, parties have far fewer items to dispute. With smart contracts, companies can pay as quickly as net 1-day if they so choose.
Dumont believes, "We must recognize that late payments are a cancer in our industry driving in an average of 3-5% cost growth on projects. Why are engineers, suppliers, and contractors treated like lenders by subjecting them to 60-day, 90-day, or worse payment terms? The high cost of capital compounded in a tiered supply chain is one of the largest sources of transactional waste in capital projects."
"SIMBA Enterprise Platform (SEP) provides PrairieDog with a user-friendly, repeatable, and scalable approach to creating smart contracts that automate payments, eliminate human error, and avoid disputes," says David Wasson, SIMBA Chain's Director of Enterprise Business Development. "The smart contracts will provide an opportunity for faster payments which may incentivize stakeholders to improve both the construction schedule and quality which can translate into cost savings," Wasson added.
Dumont concludes by saying, "Construction is one of the largest industries in the world, and it's also one of the most inefficient and slow to adopt new technologies. Blockchain will enable a new economy for capital projects based on trust and transparency. Blockchain is an equalizer, delivering a necessary 'single source of truth.' Blockchain technology is here to stay, and first movers in this space will leave traditional competitors behind."
About SIMBA Chain
SIMBA Chain enables organizations to monetize and unlock their physical and digital assets' hidden value through Smart Contracts and Non-Fungible Tokens (NFTs). SIMBA Enterprise Platform (SEP) enables mass adoption and practical application of Web 3.0 decentralized solutions utilizing technologies such as blockchain, smart contracts, and secured graph-connected data. Learn more.
PrairieDog is applying proven smart contract technology to bring immediate value to capital projects in service of a greater mission to create a new market network for the construction industry – one based on transparency and fiduciary relationships. The PrairieDog leadership team consists of construction industry experts who share their vision with their collaborators involved in the Operating System 2.0 (OS2) initiative led by the Construction Industry Institute (CII) and the Construction Users Roundtable (CURT). Learn more.