The challenge of SB1and SB103 is getting to 25% small business participation which will take serious collaboration, and will require marshaling emerging technologies to reduce the cost to financial markets for providing surety credit to companies with limited revenue potential while improving underwriting information to provide flexibility in extending credit.
Enabling the financial markets to monitor risk, and apply predictive analytics for risk mitigation, will benefit all stakeholders plus lead to competitive pricing and flexibility for bank, surety and insurance products.
Digital communication with surety markets on performance monitoring by surety markets will not only improve small business access to prime contracts, it can be utilized by prime contractors to increase the pool of bonded small business subcontractors.
XBRL-CET advocacy over the years has been towards such collaborations to improve access to surety credit for small business, and to encourage public and private efforts to adopt policies and procedures that rely on, and promote open data standards to leverage new technologies, enable innovation and create new generations of products and services.
On July 17, 2017 XBRL-CET responded to a USDOT request for ways to reduce burdens on building transportation projects. The suggestions and action plan included the USDOT implement federally recognized machine-readable data standards like XBRL and FIBO, and for transitioning away from manual paper processes to electronic transactions, including standardized electronic surety bonds.
Collectively the improved administration and risk management at reduced expense will not only streamline the construction process, it will improve access to surety and bank credit for small business to expand opportunities for everyone, and represents “social equity of our transportation system”.
Scope of Work - Action Plan
1. Expand the XBRL taxonomy for construction of Transportation and Energy Infrastructure projects for streamlining digital communications, data exchange and electronic transactions.
2. Establish an internet based neutral data exchange platform (CDX) for construction data that can be utilized by all stakeholders that are not able to exchange data B2B.
Electronic Bonding / Project Monitoring
3. Establish policies, protocol and procedures for implementing electronic bonding for all surety bonds based on federally recognized electronic repository structures that enable competition and innovation by multiple electronic surety bond providers.
4. Establish policies, protocol and procedures for implementing public online and private secure digital reporting of construction progress utilizing XBRL.
5. Efficient Data exchange can have a major impact on small business, but only if small businesses are aware of how to utilize digital resources, and those digital resources are tailored to small business.
Veteran Owned Small Business
6. There are several programs that are designed to assist veteran owned businesses, some specific to the construction industry. Coordinating the data requirement of various programs can significantly improve a veteran owned businesses ability to take advantage of those programs.
Solar components on Transportation Projects
7. Establish an internet based neutral data exchange platform for DOE/Orange Button IECRE 61724 solar system data in XBRL that can be utilized by all stakeholders that are not able to exchange data B2B.
8. Establish a pilot DOT transportation project to validate all the required data elements are in the XBRL taxonomy and can be exchanged by all stakeholders.
See City of Tracy - One Voice Trip to Washington DC - Western Tracy Interchange
9. Establish a pilot transportation project with a solar component (DOE) to validate all the required data elements are in the XBRL taxonomy and can be exchanged by all stakeholders.
10. Establish a pilot transportation project (DOT) with a small business (SBA) solar component (DOE) to validate all the required data elements are in the XBRL taxonomy and can be exchanged by all stakeholders and consistent across federal agencies.
11. Coordinate and help find sponsors for student teams to participate in the AEC Hack-a-Thon June 6 &7 with student teams building prototype Salesforce Apps for importing and exporting in XBRL
At the end of the AEC event there will be working and functioning prototype Salesforce Apps published on the Salesforce App Exchange that can import and export in XBRL:
ConsensusDocs 221 and 721
Construction progress monitoring.
Review and Analyze
12. Review and analyze the impact of XBRL data interoperability for improving access to bank, surety and SBA credit for small business.
13. Review and analyze the impact of XBRL data interoperability for expanding the pool of qualified small business subcontractors.
14. Review and analyze the impact of XBRL data interoperability for improving stakeholder project administration.
15. Review and analyze the impact and benefits of multi-industry and multi-public agency utilization of synergized XBRL taxonomy over multiple proprietary systems with industry specific and silo’ed data standards.
16. Review and analyze the impact of XBRL data interoperability for improving risk management capabilities.
17. Review and analyze the impact of XBRL data interoperability for accelerating the construction of all clean energy projects, not just solar.
18. Review and analyze the impact of XBRL data interoperability for compliance with regulatory reporting requirements. DATA Act, AB1223, SB350.
19. Identify inefficiencies that have been addressed and rectified by data interoperability and the resulting data analytics.
20. Identify inefficiencies that remain that could be addressed and rectified by data interoperability by enabling data analytics.
Many agencies in California have comply with the DATA Act and AB1223 for digitally reporting contract progress, SB1 and SB103 to expand opportunities to small business and SB350 to expand use of renewable energy. Unintended consequences can result, or intended benefits.
Instead of focusing on just compliance, XBRL-CET is leveraging the need for compliance with the objective of improving access to opportunities for small business by implementing emerging data interoperability standards to increase efficiency and reduce costs that combined can help make small business a profitable market segment for financial markets to support.
Contractor Data Standards
Contractor Trade Associations
Energy Trade Associations
IECRE 61724 in XBRL/FIBO.
There are multiple efforts to reduce burdens on stakeholders by harnessing the power of data interoperability for building the nation’s transportation and energy infrastructure through big data, data analytics and predictive analytics to enable efficiencies for streamlining administration, improving operations and implementing innovative risk management.
The challenge is not technical, that is the easy part.
The challenge is securing consensus around data standards so that the data exchanged is “apples to apples”, avoiding every industry having its own silo solution for data standards that in the bigger picture create more inefficiency, coupled with the high cost and risk of premature implementation if other stakeholders don’t adopt the same standard, the “chicken or the egg” dilemma.
Under the DOE Orange Button grant a multiple industry national collaboration of stakeholders, including surety companies and solar related entities, have been active in expanding the XBRL data standard traditionally just used for publicly traded entities for financial reporting the Securities and Exchange Commission in a secure and reliable machine readable digital format, so that it can also be utilized and exploited in building the nation’s energy infrastructure, the Smart Grid.
Synergizing the DOE and DOT use of open data standards like XBRL for building both transportation and energy infrastructure projects will reflect the emerging consensus that is sought by all stakeholders,.
California has always been a national innovation leader, and years ago Caltrans started publishing monthly construction progress information on their website to provide transparency to project stakeholders.
That source data was then turned into a dashboard and used to enable data analytics that could identify which projects were behind schedule, had stop notices or liquidated damages for the first use of predictive analytics to monitor for potential contractor default.
See box right - Project Status Connection
When Caltrans first because aware that surety underwriters were utilizing the website to monitor their risk of contractor default, their first concern was of Caltrans being considered credit information provider with all the regulatory requirements. Since the data is all public that concern was quickly determined not to be an issue, however the realization that small businesses had an easier time securing surety credit because the surety markets could easily monitor their risk was a pleasant surprise and an unintended consequence.
That “Unintended Consequence” is now an “Intended Benefit”.
Recently enacted AB1223 requires a similar transparency and now California state agencies must post similar construction progress information, where lack of data interoperability will have the unintended consequence of making the various data format impossible to leverage, and where an intended benefit could be secured through implementation of open standards
Legislative mandates are forcing action to be taken
The federal DATA Act requires digital reporting of how federal fund are spent in order to secure federal funding
California AB802 requires building utility data
SB350 which requires that the state gets to 50% renewable energy
SB1 and SB103 require participation of up to 25% for small business
How these data challenges are addressed will either produce
intended benefits, or unintended consequences for all stakeholders.