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    December 07, 2023

    Data Access & Digital Gatekeeping in Construction Projects

    Caryn Fuller and Sarah Keyte

    Introduction

    Information can be an overlooked corporate asset. For that information to be the most valuable in modern construction projects, the information generally needs to be digitized and organized and then made available to the right people, in the right format, at the right time.

    Through cloud-based data repositories, modern information management practices are helping to make this possible. These systems help clients, designers, and contractors share, store, and manage project data efficiently throughout a project’s lifecycle.

    While many industry professionals understand the benefits of digitized information management, are they cognizant of the potential risks? Is this new, innovative step in the digital revolution leading to data-access disputes? Do contracts deal with this risk?

    This article will consider some of the benefits and risks of modern information management practices in construction projects.

    Documentation and Data

    Modern construction projects generate an immense amount of documentation and data. Consider the multitude of contracts, drawings, specifications, schedules, progress reports, meeting minutes, change requests, requests for information (RFIs), risk registers, safety documents, standards, and invoices that may be generated throughout a project’s lifecycle. It can be easy to become buried in documentation as the project progresses, especially for the estimated 47% of construction managers who still use manual (i.e., non-automated) methods to collect project information.

    Data collection and analysis in construction projects may seem like a never-ending and daunting process. However, if data is not managed appropriately from the outset, construction projects may descend into chaos which could result in potential losses.

    A 2018 report estimated that 90% of data generated by the engineering and construction industry is unstructured. An estimated 30% of initial project data created during the design and construction phases was lost by project closeout. This results in avoidable waste and can create productivity losses; an estimated 13% of construction teams’ working hours are spent searching for project data and information. According to another study, the lack of a comprehensive data management strategy contributes to an estimated $1.8 trillion of lost revenue globally. Furthermore, when records and evidence are missing or unorganized, construction businesses are less likely to successfully recover losses through claims or dispute resolution. Fortunately, there are data and document tracking solutions that can effectively combat chaos and mitigate risk in construction projects. One of the most comprehensive tools is to establish a common data environment (CDE).

    A CDE is defined as the “agreed source of information for any given project or asset, for collecting, managing, and disseminating [information] through a managed process.” Put simply, CDEs are typically cloud-based platforms where project information is stored and accessible to project participants. Popular CDE solutions include Asite, Oracle’s Aconex, and Bentley’s ProjectWise.

    CDEs can change the way project data (or evidence in dispute resolution) is created, stored, managed, and archived. In a study on poor information management in construction, 38% of respondents were adopting a CDE to combat data loss. A 2021 KPMG report demonstrated that CDEs provided a significant return on investment with respect to labor productivity gains. A CDE acts as a one-stop shop for project data, with a goal of improving efficiency, accuracy, and accountability. They can even keep the data trail of a document intact, potentially detailing when project documents were viewed, accepted/rejected, commented on, amended, or superseded by project participants. Comments made using the CDE may even detail why data changed.

    CDEs have the potential to hold the evidence that can make or break a claim. Perhaps they hold the contemporaneous, factual evidence that is essential in developing or rebutting claims, and the necessary data to form credible expert witness opinions. However, they can only be used by the party (or parties) that have access to the CDE when a dispute arises.

    Contracts and CDEs

    While technology has moved forward, the contracts which govern relationships may lag behind. In English case law, Trant Engineering Ltd (Trant) v Mott Macdonald (MMD) Ltd (Trant v MMD) suggests contracts have not yet adapted to account for the risks that arguably arise when adopting CDEs. The Trant v MMD case includes a dispute regarding the scope of the work and payment. The client allegedly withheld payment from the design consultant who, in retaliation, effectively locked the digital door to the CDE, preventing the client from accessing project data. The litigation ruling resulted in the consultant returning access to project data in exchange for payment, but seeking the interim injunction to reinstate access came at a cost. This case highlights the risks of having no provisions in the contract which deal with CDE data access in the event of a dispute.

    When considering information management and risk, Trant v MMD demonstrates that the party who has control of the CDE (the CDE owner) may hold less risk than parties uploading project data to the CDE. The CDE owner can be a powerful gatekeeper with the potential to control the evidence, and parties who do not control access to the CDE may be at a disadvantage.

    In the construction industry, the general contractor often acts as the CDE owner and has a bilateral contract with the CDE solution provider. In the event of a dispute, this may have the potential to put other parties (typically the employer or members of the supply chain) at risk of having insufficient data to make or support claims.

    Trant v MMD includes a scenario in which one party rescinds CDE access. The decision also prompts other questions related to potential future scenarios and disputes: What happens if the contractor hosting the CDE goes insolvent? What if licenses expire and are not renewed? Risks may exist if CDE access is lost or if the data is not archived by each project stakeholder who might later rely upon it, creating the potential for project data to be lost.

    CDEs, Legal Decision Makers, and Expert Witnesses

    The data available also has the potential to impact expert witness evidence. Expert witnesses who have full access to project CDEs may find it easier to locate relevant contemporaneous records. For example, in a CDE solution such as Aconex, it may be possible to view the latest revisions of documents as well as superseded versions. It may also be possible to ascertain who downloaded a particular document and when, down to the nearest second.

    This evidence, available in the CDE, could be used to discredit claimed ignorance. By contrast, an opposing expert who does not have access to the CDE could be at a significant disadvantage by not being provided with the opportunity to view crucial documentation or metadata. Both parties may have the document, but it may be the case that only one party has access to these comments detailing why a design change was made, which are held within the CDE.

    Explaining the idiosyncrasies of CDEs to legal decision-makers such as judges and arbitrators can require independent experts and petitions from lawyers. The party hosting the CDE may argue that the CDE is hosting commercially sensitive data and should not be compelled to act against their commercial interests.

    Ultimately, arguing about access to data is a time constraint that can seldom be afforded in most disputes. If the alternative is for each business to keep its own diligent, regular records, issues regarding CDE access may be mitigated. It could be beneficial that parties establish CDE user and access rights during the project and for the limitation period.

    Differences in the data available to each party can lead to differences in the pleadings, and discrepancies between the experts’ opinions. Additionally, although parties involved in litigation proceedings are obligated to disclose relevant documents according to court orders, the introduction of CDEs prompts questions about whether a court or tribunal may compel parties to provide access to the CDE specifically. This can work adversely in finding common ground between the parties, counsel, and experts.

    Digital Transformation & Outdated Knowledge

    Digital transformation is constantly evolving. Many changes relating to project information management have occurred over the past decade and as such, parties who have not kept abreast of how data is managed in the industry may be unaware of the significant advantages or disadvantages of CDE access.

    Understanding the potential and capabilities of a construction project’s CDE can help streamline the discovery process. It is crucial for construction professionals to remain cognizant of the potential risks imposed by new technology to help avoid costly disagreements.

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    Caryn Fuller

    HKA, Houston, TX

    Sarah Keyte

    HKA, London, England