Examining dissimilar interactions enabling late payments, underpayments and non-payments to construction contractors

Abstract

Previous research linked late, underpaid, and non-paid contractors to various performance issues. However, the degree to which these differences in practices enable the problem under design-bid-build contracting is unknown. To address this gap, expert interviews were used to rate 11 incompatible practices. One-mode matrices were computed by utilizing social network analysis methods. Using metrics like structural equivalence and Euclidean distance, the study established that different indexes have different connections to the payment problem. The most significant index suggests the issue is a low-cost acquisition strategy. The strategy's misaligned interests were also corroborated by the hierarchical clustering and block modelling results. The study contributes to the methodology of assessing the efficacy of existing payment default remedies, rationalization of intermediary roles, and illustrates deviations from the general contracting principles.

Identifying and analyzing effects of interdependencies on construction contractor payment risks

“…The asset specificity principle emphasizes the irreversibility of resources integrated into a site whose legal ownership excludes suppliers such as contractors (Kenyatta et al, 2022). Additionally, a construction site refers to an owner-defined procurement structure that is intended to serve one-sided interests (Skitmore and Smyth, 2007).…”

“…System dynamic modeling (SDM) is one of the most common techniques for representing and capturing interconnectedness (Kenyatta et al, 2022). It lacks, however, operational metrics and concepts.…”

“…This suggests that the causes of payment defaults are associated with distinct yet interdependent roles. Due to this paradox, various incompatibilities are occasionally observed (Kenyatta et al, 2022). Therefore, this structure is useful for constructing an interconnected network.…”

“…In a standard market, for instance, the buyer pays the producer/seller after production. In the construction market, however, the owner is both the buyer and the owner of the finished product (Kenyatta et al, 2022). In this sense, theoretical principles serve as evaluative instruments and mediators between practices and methods.…”