While technology has vastly improved the means and methods of construction, the business of the industry remains trapped deep in the previous century. With owners, general contractors, and subcontractors mired in paperwork and manual processing, an efficient, accessible, and accurate solution is now taking hold. The answer may lie in new software solutions involving online collaboration platforms. Owners and GCs are updating and streamlining the processes of pre-qualification, invoicing, lien waiver collection, and contractor payments all on one computer software platform. The pre-qualification process is often vexing for even the most seasoned of construction company executives. Performed manually, each packet of pre-qualification forms can take 2-3 hours of diligent preparation. Online Collaboration Platforms offer a web-based Pre-Qualification Management (PQM) which can significantly reduce completion time by loading a GC’s pre-qualification forms into the program’s forms library which then requires only data filling. The capability of electronic submission, review, approval and updating of all pre-qualification documents allows subcontractors to reallocate human resources away from paperwork and towards performance and increased bidding opportunities.
The typical GC can also reduce its payment cycle by up to two weeks while also reducing administrative and finance costs by as much as 20 percent. New software allows the GC to invite all participants to the draw via email. The subcontractor (or supplier) can then access the schedule of values by clicking a hyperlink in the system generated email, and enter requested payment amounts or change orders. The GC then can review the invoices online and, when approved, can create an owner pay application complete with electronic signatures. Now held in a centralized database, the entirety of the GC documents can be reviewed by on-system owners, architects, lenders, or title companies.
Another advantage to online collaboration platforms is the reduction of risk involving Prime Subcontractor default and verifying sub-tier contractor payments. The GC can request that all subcontractors sign their unconditional lien waivers in the system. Once completed, the GC clicks a button to disperse funds and the system creates a payment file which is securely transmitted to the GC’s bank for processing. After the subcontractor has been paid, the program releases the signed lien waivers to the GC. The program can also automatically withhold sub payments by identifying missing or incorrect lien waivers. A process that usually took a week or more can now be affected in a 24-hour turn-around cycle.
Through the use and continued development of online collaboration platforms, we are now living in an age where the construction industry is truly benefiting from the technology revolution.