The purpose of positioning validation is to help determine whether the data has an assigned coordinate system and if the data has been georeferenced, or if georeferencing will be necessary. CAD and BIM files may or may not be drawn with coordinates that represent real-world positions. In ArcGIS, all data must be assigned an Esri coordinate system definition. If the data was drawn according to the assigned coordinate system, it will be properly positioned in ArcGIS Desktop. If the data is not drawn to the assigned coordinate system, more work is required to adjust its position. ArcGIS Desktop allows you to georeference CAD and BIM data when needed. To determine whether you need to georeference data, you can add the data to a map and see where it is positioned, or you can access the data file properties and use the information there to validate the positioning information. In ArcGIS Desktop, you can investigate and validate the spatial position of CAD and BIM data before you add it to a map or include it in analysis tools by viewing a CAD or BIM file's data properties. These properties include information regarding an assigned coordinate system, the linear units of the data, and other information about the intended global position of the data. The properties dialog box contains a workflow to validate the position of the data you can use before you use it in ArcGIS Desktop.
Validate Position
The position validation workflow is on the Validate Position option of the CAD or BIM file data properties dialog boxes, which you can access through the Properties context menu of the data file items in the Catalog view. Status messages are displayed, and actions are provided to help you in the positioning validation and mitigation workflow. The main goal of the positioning validation workflow is to validate a properly positioned file, or reposition the data near to where it should be before the data is positioned using the ArcGIS Desktop georeferencing tools.
Change Coordinate System
The validation status messages identify the Esri coordinate system definition assigned to the data. For CAD and BIM data, this coordinate system definition is in the form of a .prj file. When no definition is found, a default coordinate system may be assigned or inferred from spatial location data in the file. Data files drawn to the assigned Esri coordinate system definition with the correct linear units will be positioned correctly in ArcGIS Desktop without a need for further validation.
Note:
For data that was drawn to a defined global coordinate system, that system is the appropriate coordinate system. If the data was not drawn to a specific coordinate system, you may be able to choose the coordinate system that fits your purpose and has the correct linear units.If the data has been assigned an Esri coordinate system definition, additional validation will check the data's coordinate system with the selected coordinate system's defined area of interest and display a status message with the result of that comparison.
Status messages are provided to validate if the model coordinates fit within the area of interest of the assigned coordinate system. A fit suggests that the coordinate system is appropriate for the data. However, if you want or need to change the data's coordinate system definition to fit other data, you can choose a different coordinate system by clicking the Change Coordinate System button. If the data was drawn in a relative coordinate system or no coordinate system, you can choose any coordinate system that matches the linear units of the data. Not all coordinate system definitions have a defined area of interest.
If the data was drawn according to the assigned coordinate system with the appropriate linear units, the data will be positioned correctly in ArcGIS Desktop and the data can be used without further validation.
If there is no area of interest defined for the coordinate system definition, it can still be appropriate for the data. However, if the data does not fit within the area of interest, you may have assigned the wrong coordinate system definition or you need to georeference the data to offset the model coordinates with a transformation world file (.wld3). If the coordinate system definition is correct and the data file coordinates don't fit the data, it is likely the data was not drawn to this coordinate system. Adjust it using a coordinate system adjustment .wld3 file using the geoprocessing workflow for CAD or BIM in ArcGIS Desktop. You can also create a world file that positions the data closer to the intended position using a suggested location. If the assigned coordinate system is not appropriate for the data because the default coordinate system was not appropriate, the linear units do not match the data, or for any other reason, click the Change Coordinate System button and assign the correct coordinate system definition.
If the data has not been assigned an Esri coordinate system definition, you must assign a coordinate system for the data before you can proceed with the validation and before you can use the data in ArcGIS Desktop. Click the Change Coordinate System button to select a coordinate system.
The
Change Coordinate System
button 
provides direct
access to the Define Projection geoprocessing tool to assign
a coordinate system definition to the data if one does not exist
or if you need to change it.
Suggest Location
If the data doesn't have an existing .wld3 file and you want to reposition the data close to its final location before georeferencing the data in ArcGIS Desktop, you can use a suggested location. A suggested location can help locate the data near to where it should be positioned. If the data file has an existing .wld3 file, add the data to a map to see if the data is positioned correctly before adding a suggested location. A CAD or BIM data file may have an address or suggested location that is read from the properties of the file. If you have more accurate information and want to specify the suggested address or place-name for the data, you can provide this information by clicking the Suggest Location button. If a valid geospatial location is found from the current map's locator, its position will be compared to the data file's coordinate extents, and a message will be generated to identify whether that location is within the spatial extent of the data.
If the data has a suggested address, it is used to find a geographic location using the locator of an open map in ArcGIS Desktop. This information is only needed if you intend to transform the coordinates of the data to be near this location to georeference it.
To provide an address or placename for the data if you have a map open in ArcGIS Desktop, click the Suggest Location button. This information is only needed if you intend to transform the coordinates of the data to be near this location to georeference it.
To use the Suggest Location button 
, you must have a map open in ArcGIS Desktop. The suggested location search string locates a geospatial position with the current map's locator.
Transform to Suggested Location
If the suggested location or address is not precise—for example, a city name—a small dataset may not include the city center but still be properly located within the city. If the location is found within the adjusted model's extents, it is likely that the data and the suggested location match the assigned coordinate system and can be used to assist in georeferencing using the Transform to Suggested Location button.
When the geographic coordinates fit within the adjusted coordinates of the model coordinates of the data, it is likely that, based on the assigned coordinate system, adjusting the data to this location is a plausible location for the data. Data that has a world file is likely to be in the correct location, and transforming the data to the suggested location may be a less accurate position. If there is no existing .wld3 file, clicking the Transform to Suggested Location button creates a world file that can move the data closer to its intended position. You can then work with the data using the ArcGIS Desktop georeferencing tools.
Use the Transform to Suggested Location button 
to create a transformation .wld3 file that will reposition the center of the model coordinates to the geographic position of the suggested location. This repositions the data in ArcGIS Desktop near where the data should be located. You can then perform the required georeferencing task in ArcGIS Desktop. Using this tool avoids a situation in which CAD or BIM data is added off the coast of Africa or in the Pacific ocean.
When the geospatial position of the suggested location doesn't fit within the model coordinates, the assigned coordinate system definition or an existing world file is causing that location not to match the data. However, if the suggested location or address is not precise—for example, a city name—a small dataset may not include the city center but still be properly located within the city, which means the location may still be a match for the data in the assigned coordinate system. This means you may still be able use the location with the Transform to Suggested Location button. Otherwise, you can suggest a new location or review the assigned coordinate system.