XBRL Extension for Construction, Energy and Transportation
Construction Financial Statement
Work on Hand Report
Projects out to Bid
Surety and Insurance
California DMV Bond to demonstrate how public agencies can adopt electronic surety bonds.
The Smart Grid Interoperability Panel provides a collaboration platform that is place to develop best practices to enable interoperabilty in the energy industry, which has significant construction activity.
It is built, operational, already utilized by all public companies and accepted by the government for financial reporting
XBRL already as extensions that can work for this purpose.
The initial Green Button Data Set was for energy usage. That Data Set has now prompted almost 300 independent applications to be developed, with many more to come. The XBRL-CET is the Next Green Button Data Set, and will prompt incredible innovations.
The DATA Act has a compliance date of 2017, there is little time and no better options.
XBRL US, along with its international XBRL
XBRL-CET is an attempt to get various business interests to collaborate together in the creation of a reliable open standards based taxonomy that will allow data interoperability between different industry segments; Public works, Contractors, Banking and Surety. With the taxonomy the ability to exploit that capability will result in significant cost savings for everyone while increasing services and options to everyone.
Construction, Energy and Transportation involves numerous stakeholders and is too large and fragmented to easily develop a consensus for any single data standard.
Most significant transformational changes are mandated by necessity, or by law, rather than voluntarily implemented common sense or best business practice.
Each stakeholder, public or private, has their own legacy systems designed for their specific industry or need, and most systems cannot efficiently exchange data creating lost productivity and increased costs.
This inefficiency is most damaging to small business where the extra administrative costs undermines those that work with them to provide services.
The need for common standards and interoperability is well recognized and the government has lead the effort with:
The 2009 “Interactive Data to Improve Financial Reporting” legislation that created the XBRL standard for financial reporting to the SEC
The 2007 Energy Independence Act which established the Smart Grid Interoperability Panel
The Data Act that requires all federally funded projects to utilize open standards for financial reporting.
XBRL-CET responds to the DATA Act as a collaboration effort as "a carrot" to maximize the positive potential the law can have, instead of the negative consequences that would occur without collaboration, "the stick".
The primary objective of XBRL-CET is to identify as many data fields as possible and have them formally adopted as XBRL US as an extension to XBRL. The complete set of formally adopted data fields can then the source for multiple data sets that use some the data fields in specific common data exchanges.
An equally important objective is to explore the possibility of collaborating with other standards groups like Acord, AGC and IEP XML and synergize each of the separate standards under the XBRL-CET extension so that they complement each other instead of competing to provide maximum interoperability between systems.
To achieve this objective many approaches are taken, from entering contest hosted by the Department of Energy to submitting Priority Actions Plans to the SGIP.
Exploit the existing XBRL Taxonomy.
Enable the existing XBRL standard to incorporate other data standards so that they synergize and harmonize with XBRL and provide for interoperability between systems and industries.
Promote innovation, development of new tools and resources, and enable greater efficiencies.
Create an open standards based platform and reference point for collaboration for compliance with the DATA Act.
Provide a sustainable taxonomy resource with a wide range of identified data fields common in Construction, Energy and Transportation.
Enable the full Potential of the Nations Energy Infrastructure - The Smart Grid.
Provide specific “Data Sets” that enables interoperability between systems and industries:
Improve Access to Opportunities for Small Business.
Public agencies, contractors, surety brokers and surety companies all want to respond in productive ways to the “social goal” of helping small and emerging contractors participate on public works projects by improving access to surety credit, the challenge is to find “productive ways”. Often attempts to find solutions entail exaggerating costs or the public providing collateral that does not provide the best cost/benefit return to the public agency, and too limited in scope to impact a significant number of small companies. Other efforts include education and training along with subsidizing expenses such as accounting fees.
These policies and programs collectively create a situation where the public is paying inflated costs to help small contractors secure opportunities so they can grow into self supporting competitive companies that contribute to their communities. This subsidized approach has been very successful in helping a number of companies achieve success; however there is always interest in exploring what other actions can be taken to build on that success, particularly those actions that do not add to the subsidies which are difficult for public agencies to finance in tough economic times.
XBRL-CET is intended to be an inter-industry collaborative approach to improve access to surety credit for small and emerging contractors by promoting and implementing the development of internet based communications towards open standards with the resulting interoperability driving down administrative costs while increasing the ability to manage risk and generate profits.
The premise is simple; small companies generate small incomes for the professionals that provide services and the companies that extend credit. If that small income is not enough to cover the costs of providing the service, or to cover the risk of extending the credit, there will not be much interest in serving that market segment. Make the small and emerging contractor a more profitable market segment and access to surety credit will improve without subsidies or set-asides.
Online applications that can be easily imported and transitioning to electronic bonds will dramatically reduce the cost of administering surety programs, and online access and the ability to monitor to project information will greatly improve risk mitigation and underwriting results.
All that is needed is the ability to effectively communicate, which is accomplished by open standards and interoperability. That is the Surety Connection Project.
Background of Challenge to small and emerging contractors.
Surety credit is difficult for small and emerging companies to secure because they do not have the established financial history, or track record of completing projects.
Under current administration capabilities surety companies that provide bonds have no efficient way to monitor all the bonds they have provided, and are often unaware of a deteriorating situation until it is too late. The common practice of sending paper forms to be completed by the project owners to advise the project status is unreliable, and quite often the forms aren’t even returned. The surety is generally blind as to the credit it has extended.
Public agencies are under considerable pressure to provide opportunities to small and merging companies as a component of their procurement policies. Therefore Public agencies mandate and/or allocate certain percentages of work that must be done by small and emerging contractors.
The law requires that public works projects have bonded contractors, which creates a challenge because the surety, as a credit provider, has underwriting constraints that often preclude small and emerging contractors from obtaining surety credit, and consequently denied the opportunity to participate in the public works projects specially set aside for small and emerging contractors.
In response to the mandate and set aside projects the surety industry has developed various approaches, including participation in the US Small Business Administration Surety Bond Guarantee Program, and the U.S. Department of Transportation Office of Small and Disadvantaged Business Utilization Bonding Education Program.
All these approaches serve a very valuable purpose, and contribute significantly to meeting the objective of improving access to surety credit for small and emerging contractors. However they generally have high overhead costs, are constrained by inefficiencies and can create a situation where it is harder for smaller firms to graduate into standard programs without the support structures.
There is a fork in the road, and we must take it.