Liability Briefing on e-Business

EXTRANETS

What are they?
Legal status
The ASP
The protocol
Keeping the system up to date
Keeping hard copies
QA considerations
Costs andtraining
System failure
Insolvency of network operator

What are they?

Extranets are a confidential, project specific website, with a facility for storing drawings and other documents in a format which allows permitted participants to gain access to it and to change the documents. It will keep a record of all changes made to the documents, for audit purposes. The website can be part of a company’s website (eg the contractor’s) or it can be independent.

Legal status

The parties to a project can make a contractually binding agreement to operate via a project extranet. If the information on the project extranet is kept sufficiently securely and any changes logged, it may be possible to use it as evidence in court.

The ASP

An ASP or Application Service Provider, is a company or organisation which operates the extranet for the benefit of all parties, for a fee. Usually appointed by the employer.

The protocol

The extranet protocol contains detailed rules about the operation of the extranet, eg the way in which changes are to be noted on documents, restriction on access to the documents etc. It is essential that everyone follows the protocol, so that the extranet data is in a common format and can be relied on.

Keeping the system up to date

Everyone on a project (from consultant to supplier) must operate via the extranet at all times. This allows everyone to rely on the extranet to provide the latest version of documents, especially drawings. If anyone starts to sketch out changes and fax them through to other parties on the project, for instance, the benefits of the extranet will soon be lost.

Keeping hard copies?

Each individual participant needs to consider how they will keep their own records of their work on extranet documents and in particular which changes were made in which versions. Ideally, the ASP will record this, but if the system fails, even temporarily, it is useful to have an electronic or hard copy backup.

QA considerations

An extranet does not avoid the need to apply quality assurance procedures to any documents which are amended or used on it.

Costs and training

There will be costs in training staff. There are many varieties of extranet on the market, so staff need to train and retrain depending on the type of extranet used on a particular project. The employer will usually pay the ASP.

System failure

The employer’s contract with the ASP should deal with the allocation of risk. If the extranet is temporarily unavailable, or information on it becomes corrupted, contractors may also have claims for delay and loss and/or expense arising out of a system failure. ASPs do not normally have significant assets, and this needs to be borne in mind.

Insolvency of network operator

This should be covered in the contract with the ASP. There must be an arrangement whereby the employer can gain access to the records and data held by the ASP on an insolvency, so he can pass it to another ASP and continue to use it for the purpose of the project.

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