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In Australia construction industry, payment delay from
subcontractors is considered as one of the huge issue. Moreover, it can be
noted that the delay in payments is one of the huge problem in the construction
industry of many countries in the world.
Due to this, it will affect the cash flow rate of the contractors, and
they are unable to meet their financial obligations properly. Another fact is
that payment defaults by the principal lead will move towards the insolvency of
contractors. Then it will become extremely difficult for the contractors to
complete the contractions project in proper time duration. Furthermore, it will
also in turn other parts of the project chain
But for that there is need to recognize the main
problem in the subcontractor’s payment issues in Australia. It can be noted that like other countries in
the world Australia has also mad payment specific construction industry
legislation. Due to this, it will become extremely easy to take contractual
measure and also mitigate these payment problems in an efficient way. But
another fact is that the problem will never stop it will continue. This shows
that the paper will examine related payment issues present in the construction
industry. Moreover, it will also discuss the nature of payment problems present
in the construction industry of Australia. The main part of the paper will
analyse the solution for solving the payment issue in this industry. Due to this,
the subcontractors will never move towards bankruptcy and project will be
completed on time.
For that case, there are about two main approaches
will be used for solving this problem in an efficient way. According to this,
the first one is related to the analysis of liquidators’ reports. On the other
hand, the second one is related to the analysis of court cases that contains
any payment disputes between the contractors and works and other construction
parties. According to these facts, the results will be presented through the
help of simple descriptive and interpretive analysis. Moreover, observatory
analysis will be presented for extracting results from the court cases. Due to
this, it will become simple to present results according to the required problem
of the paper.
Moreover, it is also showing that the trade creditors
are impacted negatively due to this liquidation present in the properties. It
can be seen that these property developers are also showing negative impact in
the general construction and trade companies. Due to these facts. It can be
observed that 75% of the trade creditors are not able to pay fully through
these categories of construction companies after these liquidation proceedings.
This is because liquidation proceeding will take 18 months before finalization
of the project. The main reason is that liquidation is considered as a long
process and take a lot of time in proceedings. Moreover, according to the court
cases, it can be noted that there are about more than 80% payment disputes are
present between the contractors and principals. According to these case, there
are about only 40% of the cases are successful.
All of these
cases are successful because claimants are able to recover the money from the
contractors. The next thing is that payment losses are considered as prevalent
in liquidation as compared with delays present in legal disputes between the
two parties. It can be noted that there is not a single security is present for
such losses. There are different researches about the payment delays in the
construction industry of Australia. It can be noted that there are different
construction parties are involved in using remedies and also contained in the
payment security provisions. All of these things are under the standard laws
and regulation presented by Australia. This means that the subcontractors are
required to follow the laws and legislative documents for removing such
disputes in the payment
Moreover, according to the traditions the contraction
project workers work properly at the start and they get payment in different
stages of the project. This means that as the project is moving forwards and
they are getting their payments accordingly. Due to these facts, it is showing
that it is not surprizing, the workers are not getting paid on time.
Furthermore. In some occasions, when these project owners are not paying proper
attention to the payment. Moreover, these project managers are making
unnecessary deductions in the invoices of contractors. Due to this, it will
cause huge delay in the execution of the project because it causes some
financial difficulties. Moreover, it is showing that the prevalence of this
financial inappropriateness has been reported in many researches related to the
construction’s payment delays from the last few years. According to these
facts, it can be noted that the construction industry had put a huge delay in
the payment culture. Due to this action, the construction industry is facing
many kind of problems. The next fact is that these payment delays are
considered as important issue of dispute in the construction industry around
the world. Another fact is that the occurrence of the financial
inappropriateness has been discussed in the different kind of studies in past
few decades.
Moreover, it can be seen that the construction
industry is showing excessive delay in the culture of payments. Due to this
problem, such payment delays has become one of the main cause of dispute
between the two parties in this industry. Furthermore, the subcontractors and
contractors are present at the receiving end of these practices. They are
facing problems in receiving invoices. They said that there is a huge time lag
is present between the receipts of their invoices. Due to this problem, contractors and workers
are expressing their dissatisfaction. Moreover, the next thing is that in
Australia, there are many workers in Australia are facing payment delay issues
and it is considered as common problem
It can be noted that when subcontractors are failed to
complete invoices on time. It will put a huge negative effect on both parties
during the construction contract. This is because such payment delays by the
contractors will affect the cash flow of the company and worker in great
amount. Moreover, there will be lack of success in the construction project.
Such problem will lead towards difficulty and also survival is not easy in the
industry. It will also lead towards additional transaction and financing cost.
Due to this it will put both parties down the change during such condition.
This shows that when both parties are not working according to the given plan
then there will be huge payment gaps are present. On the other hand, prompt
payments for the completed work is considered as a strong incentive for the
subcontractors and contractors. Due to this they will deliver excellent and
quality services to the company and complete projects in a proper way
Therefore, there is a need of timely and precise
payments from the subcontractors and contractors. The main reason is that
timely and precise payments will help the contractors and workers to work
together in a collaborative way. Moreover, they can easily add more value in
the project. It will also achieve value for money. This money is extremely
helpful for construction clients. The next important thing is that upper tiers
of the contract like project developers are often deliberate and not able to
pay on time. For that case, there is a need to recognize the nature and
consequences of the payment delays. This is because it is considered as the key
driver for the development of contractual and legal solutions. It can be
explained with the help of an example. It shows that there are some payment
provisions in standard form of the contract. This is because it will keep
important things of the contract like guarantees and bonds. Moreover, there are
also some enactments of construction payments and they are also reviewed
properly after some time. In Australia, construction contracts act was
presented in the start of the 21st century. Due to this act, it will
control all bad payment practices present between the construction industries
of Australia. Another fact is that this act is also following the repeal of the
wages protection of the contractors. In these acts, there is proper information
about the punishment related to delay payments is given. Due to these acts it
will become extremely simple for the contractors to follow the rules
But the main fact is that payment problems will remain
the same in the construction industry. Therefore, it can be noted that it is
extremely difficult for this industry to solve this problem. There are many
issues present in the construction industry and also it lacks inadequacies in
solution and it also based on the nature of the industry. According to these
facts, this paper will analyse liquidator’s payment losses and delays. In this
paper, it will indicate different remedies and solution to deal with the
problem in an efficient way for the construction industry.
It can be observed that delay payment in the
construction industry is considered a global problem. In the past few decades,
Saudi Arabia and many other countries are completing their required projects in
time. The rate of these projects is 30%, these means that only such project was
completed on time. But in many parts of
the world, the construction industry is showing poor performance with respect
to time. According to this case, there are different projects are analysed in
Nigeria. The results are showing that 10% of the projects were completed on
time. This means that there is huge delay in the time and construction
projects. Moreover, in Thailand there is also payment delays issues, due to
this their huge delay in the construction projects. According to these
researches it can be noted that these problems were carried out due to heavy
payment delays from the subcontractors and contractors
Furthermore, the researchers are also evaluating the
relative importance of some factors present in cost and payments for
construction will result in delay in the construction projects. There is also
payment delay is present in the construction industry of Hong Kong. The main
fact is that this country primary focused on the primary delivering of the
project on required time without any kind of delay. They are also focusing on
the required quality of the project according to the budget. The main reason of
the delayed project is related to the payment. It is showing that when there is
delay in the payment the worker and contractors are not working properly. This
will result in delay in the required project. Another fact is that when these
projects are delayed they are mainly accelerated and extended. Due to this
fact, it will cause additional cost in the project.
Due to this, there is need of some normal practices in
the project and it will decrease the contingency allowance in the required
contract price. Despite this, many contractual parties in the construction
industry are agreed on extra time and cost reacted with the delay. This is
because there will be some problems in the future during the completion of the
project. It can be noted that there are many researchers that are talking about
the delays in the project. Due to these, the previous studies are based on the
main causes of the delay and study the effect of delays on the construction
project. In the main causes of delay, payment on time is considered as an
important factor. For that purpose, a questionnaire survey was presented with the
consultants, clients and contractors present in the construction industry. They
had showed that these payment delays are the main cause of delaying any
project. In different past studies, there are about 56 causes of delay during
the building construction in Saudi Arabia. Due to this fact, there are some of
the most important causes of delay like contractor’s progress payment, show
drawing payments, approval of building map payments. Moreover, there are also
some problems related to engineers and architects cash flows during
construction. There are also some other delay causes like the shortage of
industry infrastructure. This cause was important in the Thailand construction
industry
On the other hand, the next problem is related to the
effects of delays. It is showing that there are about six major effects on the
construction delay and they include, dispute between contractors and worker,
Cost overturn during the project, time overturn due to some natural problems,
arbitration, litigation and total abandonment between the two parties. For that
case, the three main groups of the questionnaires are formed between the
parties. The results are showing that delay payments are considered as one of
the major issue in the construction industry. Due to fact, it will become
extremely difficult for the construction industry to complete their project on
time. Moreover, this industry is moving towards essential solutions related to
this problem. This is because it will help this industry to complete their
required project on time without any delay in the future
The following Research
questions are going to implement in this research:
·
Subcontractors pays less than the actual
amount that labors deserve?
·
Subcontractors makes the payment delay
with lame excuses?
·
Other countries pay on time or is this the
issue with Australian Industry?
·
Construction sites needs regular incoming
of finance delay in amount can cause bad impact on working?
·
A number of things makes the payment delay
including contractor’s working, and labors efforts?
The
objectives after this research are that there is a need of understanding the
issues after late payment issues in construction department. In addition, they
can without much of a stretch include more an incentive in the undertaking. It
will likewise accomplish an incentive for cash. This cash is incredibly useful
for development customers. The following significant thing is that upper levels
of the agreement like venture engineers are frequently conscious and not ready
to pay on schedule. For that case, there is a need to perceive the nature and
results of the installment delays. This is on the grounds that it is considered
as the key driver for the improvement of authoritative and legitimate
arrangements. It tends to be clarified with the assistance of a model. It shows
that there are some installment arrangements in standard type of the agreement.
This is on the grounds that it will keep significant things of the agreement
like certifications and bonds.
In
Australia, development contracts act was introduced in the beginning of the
21st century. Because of this demonstration, it will control all awful
installment rehearses present between the development ventures of Australia.
Another reality is that this demonstration is likewise following the annulment
of the wages security of the contractual workers. In these demonstrations,
there is legitimate data about the discipline identified with postpone
installments is given. Because of these demonstrations it will turn out to be
incredibly straightforward for the contractual workers to keep the standards
The
analysts are additionally assessing the general significance of certain
variables present in cost and installments for development will bring about
deferral in the development ventures. There is additionally installment delay
is available in the development business of Hong Kong. The principle actuality
is that this nation essential concentrated on the essential conveying of the
venture on required time immediately. They are likewise concentrating on the
necessary nature of the undertaking as indicated by the financial plan. The
fundamental explanation of the deferred venture is identified with the
installment. It is indicating that when there is delay in the installment the
specialist and temporary workers are not working appropriately. This will bring
about postponement in the necessary venture. Another reality is that when these
ventures are postponed they are primarily quickened and expanded. Because of
this reality, it will cause extra cost in the undertaking.
Understandings
of projects and undertakings which has been recognized as venture picking up
for household brilliant organized designing tasks in like manner for those
which acquired rail, street, sewage and water administrations districts with in
Australiaand New Zealand. Besides, the undertaking understandings are the proof
in just two institutional advancement ventures which has been introduced inside
the Australia. Besides, the examination fundamentally includes the choice to
expect and tolerating angle principally. it has been structured in the point of
giving open divisions ventures which depends on focal fulfillment of qualities
which has been clarified by the vital destinations which has been introduced by
Government
In this article as it has been suggested
by Voordijk,
Derek (2016)
that agreements of programs and projects which has been acknowledged as in the
form of project gaining for domestic excellent structured engineering projects
likewise for those which brought in rail, road, sewage and water services
regions with in Australiaand New Zealand. Furthermore, the project agreements
are the evidence in only two institutional development projects which has been
presented within the Australia. It can also
According to some of the Bryan, Michael (2017)
it has been suggested that some of the financial risk are now become one of the
most obvious catchphrases but the association among labor and finance were not
be industrialized in well mannered. In this most of the cast which is belongs
to labor is mainly has been taken as the distributive suspect of growth such as
value of stakeholders as well as the denationalization of communal framework
and the reform of labor market. Moreover, the study also gives the building in
the construction industry and allocates the expansion of financial logic which
has been presented with in the production and work and in that area. Along with
the phenomenon of fluidity and threat, in this it has been investigated that
fundamental links were not be just matches, among financial development and the
restructuring of the lucidity and construction of work in the Australian
construction and property services industry. In this regard government now
needed in the communal area projects which has been implemented on the rigorous
gateway or platform procedures.
https://www.thebalancesmb.com/common-types-of-construction-contracts-844483
As it has been suggested by some of the Matthew, Christopher,
Anand (2018) that in some of the previous centuries there were many
jurisdictions from all over the universe have been indorsed the judicial reform
programs to indorse the payment of security along within their construction
industries. As well as it has also been
mentioned that there were two connected bases of these reforms in which make
sure about prompt of work which has been done. Furthermore, the fastest
provisional settlement of diffusion over the number of payments which has been
done for the work. Moreover, the paper also investigates about the latest
reform procedures in Australia mainly emphasis on the currently
Australian
infrastructure makes an ultimate use of public-private partnerships simply
known as PPPs. The early stages are always crucial as for all construction
industry and mechanisms in order to obtain good and prosperous outcome. But
still, there comes a lack of systematic research in finding out the real type
and nature of the critical factors that are needed for proper research analysis
which are affecting the efficiency and effectiveness of public-private
partnerships. The PPP usage consists of four main factors or categories as
procurement, stakeholder, risk and finance and without these categories, the
construction projects are nearly impossible. And these factors are also
identified with their respective sub-factors.
The study made an examination of the efficacy
of these factors that how they affect the construction sector and not only
this, governmental stakeholders are also defined. In the recent conditions of
globalization and global credit market shocks, it has been seen that the alternative
procurement arrangements including finance projects are highly needed in
infrastructure projects to increase the capital and overcome the risk sharing.
Many governments provide economic packages to their infrastructure sector to
overcome these factors sustainably and because infrastructure industry also has
a deep affect upon the overall economic and social activities. Whereas,
Australia is expanding its involvement in private sectors by introducing more
and more PPP programs which is a great step by the government.
The
construction sector is gaining much popularity due to the public-private
partnerships and it is gaining popularity in itself as well. Many papers have
published real cases of PPP projects but there has always been seen a lack of
overall summary about what the project have actually provided. This paper
studies the actual PPP involvement in construction sector and provides the
insights for further direction of PPP research and to improve the existing
practices of this project. The study was based upon empirical and non-empirical
data while the empirical data was further classified into risks, relationships
and financing. Whereas, non-empirical data was further classified into risks,
financing, success and concession period. Despite there are many studies about
PPP developmental projects but still no one has properly summarized what needs
to be done further. This study reveals the advantages and disadvantages of the
PPP project which has been highly applauded by people as such projects always
need high categorized legislations. Mostly, the state or the concerned
municipal discusses such issues or some government agencies on behalf of the
ruling government reveals their ideas about financing approaches and resistance
to change.
Infrastructure
companies should integrate flexibility in their ideas to modify those ideas
into goals and to measure the procedures towards goals over time more
effectively as multiple goals cover simultaneous programs and they cover
different project areas like contributing to team performance and distribution
of rewards and value by potential recipients. These rewards and values should
not only be for the contractors only but the ones working under them as in
subcontractors as well to achieve high goals and retain more value from all the
employees and workers in the project sector. The reward amount should be
sufficient for value proposition. The
complementary procurement initiatives should be maximized by keeping in the
record of risk allocation and equitable contracts for risk management, value
driven factors that causes tender selection processes and contractor’s
involvement in designs in early stages, conducting workshops to maintain
relationships among all and most importantly, motivation to improve the project
and overall outcomes for one industry. Clients are always demanding up to the
mark construction projects where they can see value for high amounts of money
and for this, high motivation for the
workers is essentially required to achieve high performances while the
government clients have different perspectives from private sector clients as
they have other dimensions, they do not incur financial incentives, while
private sectors have to use high financial incentives to overcome the lack of
specific knowledge about construction and to maximize high profits for clients.
This is the gap that mainly needs to have more focus on.
The
study reviews the condition of contracts that the construction industry pertain
as a main frame of reference and to generalize the whole concept. There is a
specially authorized chartered assigned to look into the contracts as from 1985
– 2004, the Royal Institution of Chartered Surveyors used surveys to
investigate the share and value of contracts depending upon different
procurements, their routes and their different condition across the region. The
investigated values and the shares of contracts help in identifying the real
patterns of contracts in construction industry and their behavior with
different procurement routes in the construction market and hence the study
will investigate and study the whole gap between the procurement of routes and
construction contracts and how the whole gap scenario is being treated all
around the world and what measures are being taken to overcome the gap.
The
results showed that the traditional routes have always been considered the most
authentic and preferable routes over other new advancements and it has been
considered the main type of procurement route for the industry that caters
construction projects and all such sectors that deal with different management
of incentive system has been preferably been applied for greater efficiency.
While in UK, different procurement routes have been adopted to channel
different condition through different routes and they also entertained all
those routes with different guidelines and additional specifications by
applying different forms of agreements and in order to increase the
performance, they made special provision of incentives, other methods of
recuing risks and improving compensations. This and the study to be taken as a
guideline for construction rules and guidelines for future construction
projects and proves to be a learning opportunity for stakeholders of
construction projects and their clients in particular and to differentiate the
procurement routes and their relational contracting as well as managing
oriental systems and incentives. This makes it as an intervention tool of
guideline to be used in different levels of private as well as public
procurement strategies.
The
divisive nature of the construction industry and its highly fragmented
categories are always up-to ensuring the changing levels of globalization with
world changing advancements in the industry and this is one of the factors why
the industry is revolutionizing its influence to learn managing approaches like
strategic coalitions to give power to the various participants of the industry
and to enhance their capabilities. This advises a highly framed prospective
future of the industry which highly depends on the factors that construction
firms take into consideration when they have to select their key and union
partners to check their trustworthiness to go on further business dealings with
them and to gain experience with their knowledge.
This
shows the capabilities of both the construction company and its partners that
how they cop up with situations and how they deal with similar situations and
they evaluate the results together keeping all the grounds in mind. If a
partner is trust worthy enough then the need of formal contracts lessens as the
company and the stakeholder both have mutual sharing of values and
understandings. This is an influencing factor in all stages of alliances of a
contract. This study enables the construction companies to develop their
strategic alliances with ground rules and on trust basis. But the firms do not
have similar needs and interests then the alliance may turn our to be way too
negative as the contract lacks the ground principles of making an alliance. One
firm always have to leverage their rules for another to keep the alliance
smooth and to race with the capabilities of other construction company to keep
up the racing competition in the market for public as well as private benefits.
Australian
construction has always been running on traditional rules and collective
agreements of their employees that have also made them win many awards for
their consistency and industrial relationships that also achieved them
industrial award and made the industry auspicious of their principles and
tribunals. The biggest reason behind all these rewards and their positive image
was their employees and trade unions that kept them going with their loyalty
and faithfulness. Collective agreements used to be the basis for individual
course of works and their complete agendas used to rely upon that. For example,
making the employees speak generally about their innovative ideas which always
encourages the two parties for new plans.
Although,
Australia faced a common issue of deregulation of labor market prevailed
throughout the world. But the conservative government introduced new federal
laws for labor community that restricted the employees and the employers to
hinder between the individuality of a laborer including the firm operations and
regulations to keep the labor away from the fundamental affairs. The study
explored the rationales for such legal developments outlining the legal
conditions by individualization processes. This includes the individual
employment rates and their choices to work on their own respective rights and
principles. This ensured the life of Australian labors in their construction
firms to go with legal rights.
The
construction sector requires high levels of trust and integration between
supply chain and collaboration of them with the construction sector. The supply
chain can never achieve anything alone as it works with the manufacturing from
where the construction starts. But still the relationship between the
contractors and subcontractors is heavily being influenced by many factors that
causes toxic traits of distrust. This study investigates the challenging and
hideous factors that influence the trust relationships between the contractors
and their subordinates and the ways how they can maintain healthy trustworthy
relationship to bring success to the construction projects. This made the
researchers to conduct several interview with the contractor and their
experiences with their partners and other companies. There were many factors
that had an influence over the trust relationship including economic changes,
climate changes, payment practices, future work opportunities and job
performance and the context of the project both the parties are working on.
These
external factors can heavily influence the overall dealing of the two parties
as they have to consider everything beforehand to achieve the successful
result. If the main contractor’s supply chain is trust worthy, then the other
side is always ready to compromise and it increases the chances of stronger
faith and trust in the company. If the construction company aim to fine tune
the trust factors the n they have to make flexibility in labor, decreased and
bargained labor cost by encouraging the labors to quickly carry out their tasks
and motivate them with incentives, lessen the dangerous activities that
includes their fear of life, transferring financial risk, avoiding compensation
costs of labor workers and meeting the changing demands of the market. Even if
these factors are properly entertained, yet the relationship between main
contractors and their subordinating contractors have a complex and problematic
relationship for longer run as they have to simultaneously go with the changing
construction market and changing new designs and architectural demands.
Public
private partnership has always been a source of success for many construction
firms all around the world and has increasingly been used in UKs public
facilities and many service provision firms there financed through Private
Finance Initiative. Such projects have been undertaken successfully at many
regions because of positive alignment between the two sectors. There are many
factors particularly to be considered between such constructive alliances and
heavy projects but mainly there are three factors that have a great impact over
such projects such as, appropriate risk allocation which means the two heads
should have their minds all set for risk management and they should have proper
arrangements to fulfill the risky demands, then a good private consortium is
essentially needed and lastly,
A
perfect financial market readily available for all the developments and
projects and for the sale and purchase of projects undertaken. Many factors are
catered throughout the way of factor grouping but mainly, project
implementation, effective procurement, governmental regulations and guarantee,
favorable economic conditions and financial market have the most impactful
influence that can bring out development in the construction sector. These
factors share the risk and allow the companies to have their agreements based
on risk management ideas and how they plan to cope up with risks in the market.
Simple contracting agreement does not get influenced by many such factors as
the simple construction companies have their own laws and regulations to cater
such problems.
Integrated
projects are to be designed according to collaborative approaches and goals of
the multiparty agreements of the construction sector. While the consumers play the most
critical role as it all depends on us how we use and discard the products which
determines the post-use value of the product used. For many, environmental role
starts with consuming the product and throwing it away in the recycling bin and
that makes them feel that they have done their part. While, we all are aware
that we should recycle but unfortunately, knowing how and where to recycle it is
still under the dark. People need to have awareness where they can dispose of
the right products so that they can be used efficiently for recycling purposes.
Knowing proper ways of getting rid of your belongings should be run as public
awareness.
Search
engine crawlers go by many names including spiders, robots or just bots and
these descriptive names sum up what they actually do – crawling through web
browsers and index pages for search engines like world wide web. This type of
automated browsing serves the purpose of reading the pages. Search engines
don’t magically recognize what websites are present on the Internet, the
programs have to crawl and index those sites to deliver the right pages mainly
for keywords and phrases or simply the words people use to find a useful
content or page. Such technologies and data rich programs deliver the material
required for the construction wherever they are needed for instant delivery at
any time. There are many benefits of as well as problems that the construction
industry has to go through because of the delivery methods and the tension of
delivering the right amount and quality to the manufacturing sites. Such
technologies have a wide spread use by construction professionals and they are
aware of all the underlying concerns. IPD has allowed the constructors to
delivery effectively and has facilitated them in using the best modeling
information required for their construction projects. This significantly
modules the development of digitalization in construction sector which is rich
in data, intelligent and has all the parameters to measure and stimulate the
design, construction and adoption of the project.
The
government policies are now embedded with construction facilitating
infrastructures and policies to ensure that the construction sector go through
less risks to private parties. This study investigates the rhetoric
relationship between contract conditions and project components. Traditional
projects go through many infrastructural risks and delivery arrangements are
always compromised. A new breed of web-based integrative applications is termed
as infrastructural projects which are sprouting up all across the world. Its
popularity stems from the prominence on interactive user contribution and
participation on the construction projects while stitching together third-party
data. The way it spreads its roots all over the Internet makes it call a high
sensitive project agreement drawing upon content which is not based on the source
agreements but retrieved from multiple data sources that lay outside its
organizational boundaries.
It
is a lightweight agreement which is created by first transforming, then merging
and ultimately mixing information from different existing data sources to
deliver a combined source of information and useful functionality. The
combination of unstructured data on reality with structured data that is
obtained by secure and customized connectors creates broader insights from
legacy rules and databases that turns out to be often compelling. These
agreements offer significant business values to the construction sector and
many other key advantages as they enable swift and quick assembling of supply
chain which not only reduces costs but also decreases the development time to
hours from months. The financial view of such agreements make it difficult for
the construction firms to critically analyze the risks attached with it.
Project
delivery systems have embedded new roots into project alliancing especially in
the commercial building sector. It is a collaborative model of people and the
systems that characterize the construction projects. Within the past decade,
people when introduced with this term commercial building construction, seized
on the opportunities emerging in the media-sphere that previously simple
construct raw material or manufacturing needs technologies used to provide. It
became a lot easier to combine supply chain and snippets of raw material and designs
into one, new and diverse content. It also includes the user-defined portals in
web content applications that can collectively create personalized and
high-value data product for distribution and consumption. Companies are
inclined towards developing applications that provides the enterprise space to
mashup web based content. These data
mashups are beneficiary for power-users, analysts or business persons who
normally used to rely on dashboards and sift through reports with underlying
data previously.
But
now, not only then can reuse the data anytime for unanticipated questions but
they can be absorbing self-service to a different level by introducing new data
with mashup. Commercial building offers many benefits including most
importantly the financial benefits that have the most positive impact on
construction sector. This requires productivity of the labor employed in
construction of those buildings. Their productivity carries out the required
project into success depending upon the design and infrastructure of the
architectural dynamics.
When
there is a lack of cooperation between the key organizing teams of construction
projects then it causes lack of efficiency to a greater level. This is the
reason; researchers have suggested partnering to overcome such issues. This
emergence and rapid growth of tourism industry has increased multinational
businesses going into domestic and local markets while there are factors like
information technology and telecommunications that are increasing competitive
pressure on big scale companies. The customers of this age are becoming more
sophisticated which also increases the level of demands and expectations of
high standards. The business running at tourist attracting places have to make
sure that they deliver up-to-the mark quality of services so that the tourists
can recall their name even if they reach their home back. And this factor also
increases the chances of more and more potential customers for those businesses
based on the customer experience. Unbalanced risk management allocative ideas
and lack of advertisement of collaborative constructional ventures makes the
contractors to identify major construction problems.
Issue
of the delayed payment in Australia is one of the biggest problem for the
construction industry. There are number of different constructers that have
been apprehensive greatly just to make sure that they don’t run out of money in
any case while in the execution process of the certain projects which they are
doing just to make sure about the profit as well as the positive cash flow.
Cash flow along for an individual project can affect number of different
contractors and can also spur all of the need for financing as well that
affects the overall profitability of the whole complete project in Australia.
Construction industry in Australia along with number of different contractors
suffer from these number of different problems that don’t just effect the cost
but it also effects the time along with the quality of their performance in
which way they perform. Practice to do the timely as well as the efficient
payment in the construction project in Australia is one of the major factor
that lead towards the success for any of the project.
Jiang
(2014) narrated that number of different failing contractor firms used to be
profitable ventures back in the history of bankruptcy. Under the process of
capitalization, there were so many difficulties in getting certain credits
along with getting the substantial cost of getting finance and etc, all these
used to cause contractors for the completion of certain projects by having the
negative ending of the balances. So because of this, it is very essential and
important to have the proper planning of cash flow along with its analyzation
for the success of any construction project. Importance of the payment is being
advanced further in the construction industry is one of the capital intensive,
capability of the clients to pay the constructors on time will definitely
reduce the cash flow problems of different constructors of the construction
industry. Mostly it is being accepted that delay in the payments of
construction in Australia is responsible for the severe cash flow problems and
particularly to the constructors as their life revolves around these
construction projects and paying late would have a devastating and shocking
knock-on impact down the whole procurement chain.
There
are multiple factors that are responsible for the late payment in Australia,
most of the time the reason becomes the clients, contractor or the consultant.
Reeves in 2003 in his work cited that one of the major cause for the delay in
payment is the errors in the submitting of different claims through the
contractor himself. All of this includes the claims without the proper
submitting of different documents or the papers, claims that are being
calculated wrongly and the ones that are being submitted without using proper
platform, path or even the procedure. Contractors need to represent their certain
claims at the right time period and they also have to repeat the whole process
after doing certain kind of the changes which were required. Ayudhya in 2012
narrated that the prolonged time that is being required for the procurement and
payment is considered to be one of the strong indicator that yes the company
definitely is in the certain financial difficulties. Ayodele and Alabi in the
year 2011 also narrated that the delay in payment for the construction purposes
results in the loss of continuation if specific construction activities along
with the consequent breakdowns in the structure of command along with the
communications as well.
Payment
of the project that is being awarded could commonly be based upon the progress
of the certain project. There is a specific need for the contractors for the
submission of progress billing that is approved with the percentage of the
completion through the authorized person that is in charge. One of the general
guideline is to honor the payment within almost 14 days on the submission of
the completed information along with the documentation with Architect. Most of
the problem that takes place in delay for the construction in Australia takes
place when most of the contractors omit the certain documents from the complete
list of documentation and to make sure that there is no as such delay in the
payment, payment officers have this responsibility to make sure that all of the
documents are completed and nothing is important because later on all this
causes a big major issue and the constructors along with the other factors or
activities also gets disturbed because of all this. It has been found out that
if such problem takes place and any of the documents gets missed then documents
would be sent back to the particularly specified contractor the verifying as
well as the process of amendment. This whole process may take other next two
days with the treasury and then further three days in the finance department
for the processing of payment. In general, it would minimum take another week
for the payment to get honored.
Delay
in the payment for construction was mostly being acknowledged as one of the
most common, complex, costly as well as the risky problem that is being
encountered at the project of construction in Australia and this could even be
liable to a certain considerable pressure on the time and cost of the
construction, this has been narrated by the Ayudhya in year 2012. Aibinu and
Jagboro both of them in year 2002 studied about the multiple factors about the
effects on delay in Australia shows that the overrun of time period, overrun of
cost, dispute arbitration along with the litigation as well. Olalusi and
Otunola both of them in the year 2012 also narrated the same factors as
mentioned above for the late payment of construction projects in Australia.
There is also a possibility that the clients can face number of different
financial problems and they can have difficulty as well in paying late to their
constructors, consultants and even the material supplier and as a result the
whole project gets delayed.
Sambasivan
and Soon in the year 2007 also did different research and it was found out by
them that there are almost 28 delay factors that are associated with the
construction in Australia, these factors are being further grouped down in to
the 8 major factors here. These factors are, any issue that can happen with the
client, issue that is related with the contractor, consultant related issue,
material related issue, equipment as well as the labor related issue, financial
related contract along with other multiple external factors a swell that can
also be the reasons to be the late payment for the construction of multiple
projects in Australia. In year 2005, Algahbari cited in his work that among all
major issues, financial related factor was one of the major and the most
critical factor that becomes the reason of delay in the construction projects
in Australia.
https://www.google.com/search?q=effects+of+delay+in+construction+contracts&sxsrf=ALeKk03CbJAXGgn5pNEqle1K05oPat874g:1591167519842&source=lnms&tbm=isch&sa=X&ved=2ahUKEwingrH2iOXpAhVHCuwKHRI1AL4Q_AUoAXoECA4QAw&biw=1366&bih=657#imgrc=v6mw_skEF83QnM
According
to Johnston back in a year 1999, survey for the payment performance in
Australia was being done and it has shown that construction industry is the
prone towards the late payment culture, by the payment of the different debts
because of the sub-contractors along with suppliers that are being made on an
average. As narrated by the Kennedy in year 2005, payment on one side
unexpectedly has not been always one of the main reason or subject of the
disputes. It has been anticipated that conflict if remains unsettled will
always result or escalate into the disputes which can also become the reason of
late payment or even the non-payment. There are multiple studies that have been
conducted in the Australia by the different researchers and it addressed all of
the problems that are related to the payment issues in a construction industry.
Hoban
and Francis in the year 2003 see different subcontractors as the specialists
that are being hired by the main constructor for the performance of particular
tasks on the construction project as a part of the complete contract. They have
also identified three main categories of the subcontractors in the construction
industry and they are, trade contractors- they are the ones that are being
specialized on the particular trades like the painting and even the brickwork.
Then second one is specialist sub-contractors- they are the ones that takes the
special kind of the services like work affiliated with electricity and plumbing
as well and then the labor that only provide certain services like the skilled
tradesman that only provide labor services and the further material is being
provided to them by the contractor. Subcontracting here constitutes the major
part of all the different kind of construction projects in building of any
industry in Australia.
For
the instance, Hinze and Tracy back in year 1994 observed that almost 80-90% of
the Australian building projects are being subcontracted out. Capability of the
main contractor along with the consultants for the delivering of projects
within a certain time duration, quality as well as the cost target completely
depends on the entire performance or efforts of the subcontractors. There are
multiple reasons due to which subcontractors are being hired that includes the
better quality of work as the subcontractors seems to be the specialists in
their own certain field or area, margin of the main contractors along with the
costs are already known from the commencement of the contract through the
quotations of subcontracting workers upon the subcontractors. Problems with the
cash flow along with along with the certain challenges of financing the entire
project are all being chased by the use of different subcontractors.
In
spite of the multiple factors and benefits for the legislative framework of the
subcontractors, there are multiple risks as well. For the instance, Karim et
al. in year 2006 along with the Thomas et al. in the year 2002 made a report
and narrated that quality is the part that remains consistent as well as the
critical issue in the subcontracting by the cost of quality rectifications
problems being as high as 12% of the entire cost of the project.
Abdul-Rehman
et al. back in the year 2008 studied about the multiple issues that takes place
for the late payment in the construction industry and it has been found out by
him that issues that affects the payments in the construction industry and he
became able to found out that different perspectives of the consultants along
with the contractors differ for the multiple causes of late payment. According
to the contractors, getting delayed in the process of certification, poor
financial management of the client, local culture or even the attitude as well,
complete failure for the implementation of the good governance in business
along with the underpayment of the certified amounts through the clients are
known to be the most causal and frequent reasons of delays in the payment of construction
projects in Australia. Different consultants identified the local attitude
along with the culture, delays in the getting approval from different claims by
the clients and then the underpayment of the different clients are known to be
the top reasons of the delay in payments. In the summary of all this, such
problems are even traceable to the clients along with the poor management for
the finance. In addition, the industry has a culture of the work first and then
getting payment later one that also adds another dimension towards the payment.
This
construction industry is known for many of the unique reasons that could
further lead towards the contribution to the payment problems. This industry
has no barrier or hurdle at all for the payment and it is also renowned for the
low amount of capital backing but it completely relies on the heavy cash flows
for the sustaining of all the operations. This entirely means that companies or
even the individuals having little capital base along with having a very little
amount of the experience are even capable of setting any of the business, this
has been cited by the Pettigrew in year 2005.
There
is nothing new for the late payment for any kind of the construction project in
Australia because this also happens in many other countries as well but the
thing that makes an alarming situation here is that ratio in Australia is
pretty high as compared to the other countries even. People start their project
of constructions but keep on delaying the payments that not only causes an
impact I mean negative impact on the construction activities and make them
delayed as well but this also leads a major disturbance for the constructors as
this is the only source of income for them so I believe that this is one of the
most serious issue and it needs to be resolved pretty soon. If things keep on
going in the same way, it can become a major source of destruction for the
upcoming future times.
Problem
for the security of payment by the constructor towards the client is being
dealt in an extensive way through the multiple ways of the mechanic lien
statues. Theoretically any of the unpaid contractor in this construction
project has provided the labor or even the materials in consultation of the
building has complete right to exercise the lien and can sell the building to
other party and can even use the payment that is being revived for his own
benefits.
Construction
companies in developing countries are most likely to suffer because of the
worldwide trend of non-payments or late payments. Be it a small or a small
sized company, it gets affected equally as they have to bear heavy loss just
due to late payments. Keeping the material on hold is the riskiest thing in
construction industry. Peters aimed to provide a better understanding and
knowledge of this issue globally to all the people who don’t understand the
sensitivity of such issues and take them for granted. Late payment not only
affects the construction companies but also contributed to making further
strategies to overcome such issues like payment issues and devising
contributory factors and potential strategies to analyze such issues. Improper
payment or late payments are a result of state economy and culture as its
always deep rooted in a nation’s strategies that how the particular nation
responds to payment issues and how quickly they make the payments.
The
survey showed these results that small and medium sized companies in the
construction sector faces such issue a lot depending on the company they are
dealing with as the other company has to go through all rules and regulations
of the state they are making business with.
There should be proper trainings about cash flows and dispute management
and how resolutions pertain to such relationships by handling cash flow
management and speedy dispute as they are very critical for such vulnerable
industry that is construction industry of any state. This study provides
solutions to such issues and dispute by providing proper guidelines on how
payment matters must be resolved and how delinquent payers should be penalized
and they should be made to learn the solutions geared. Also, measures to
protect unpaid contractors should also be taken very seriously by the state as
well as the companies who initiate the businesses and do the paper work.
The
incorporation of such cultural differences on legal and technical matters
should be measured to debate about the late payment issues and also to offer
solutions to minimize the insolvency rate. The construction sector has to go
through issues a lot and comprehending simple solutions is not the only
solution to such critical matters in the construction industry rather strategic
improvements should be introduced to highlight and manage cash flows and
payment mechanisms. The trade of value has the first and foremost obligation of
making the payment or discharge value or the compensation value from one
company to another for the goods and services used legally for construction
matters. When the agreed payments are not made on time then they turn out to be
late payments or delayed payments which are not a goodwill sign from a
construction company perspective and it decreases the chances of the project
completion on time as the contractor’s cash flows get disturbed.
Such
situations have more adverse effects if the payments are not received at all or
are cancelled fully. They plague the construction sector with such un-efficient
and violence of contracts. As such matters are always handles through legal
agreements and violating the legal contracts effects the effective and timely
payments. This is the reason that the construction sector most likely
entertains advance payments, progressive payments or interim payments and
sometimes payment after the substantial completion of work.
The
political and economic reforms in socialist countries have opened many
opportunities in the last decade for construction sector as in allowing the m
to have all the necessity changes that the sector always needed for privately
owned construction companies for their development and the radical reforms. The
market infrastructures are badly affected in such countries and very
underdeveloped for construction point of view so these private construction
firms heavily rely on the interim partnerships and transition in extensive
economies. Such partnerships raise many questions that can affect the projects
in their completion and duration of time required for the project as in under
what regulatory rules such projects are working and what infrastructures are
they following to develop their ideas into reality. The absence of institutions
that mainly legitimate the markets, make contracts and regulates the private
property issues asks the managers of new construction businesses that how they
are managing to run their assets and how they are running their construction
needs.
Those
new managers develop new relationships without knowing the answers to such
questions and they don’t pay attention to the need of taking proper
instructions beforehand and to pertain the construction sector rules and
regulations. The study investigates this issue by analyzing the subcontracting
relationships between contractors of small businesses. The results showed that
such small companies develop interim relationships which allow them to trust
then other significant company and their trust depends on ways that are not
similar to normal causalities of other high end companies in more developed
states. The desired objective is to make relationships between small companies
and significant other large companies to remove the barriers of running
construction business and to run the partnership that shows the need of not
depending merely on governmental rules and to show that privately owned
construction companies can do better for many reasons. Such states do not have
their property rights rightly developed as well as not the legitimacy of the privately
owned companies.
This
paper investigates the economies and regulatory conditions of two nations with
best construction industry and with best rules and regulation in the sector to
contingent employment context and the use of their policies to go with latest
technologies of the construction sector. The two nations taken here are UK and
Sweden and to investigate that how their economic conditions changes over a
period of time resulting into economic downturn. The construction sector in
these two countries relies on the three main questions including how the
workers in the construction sector maintain their flexibility preferences in
regulatory constraints. And how they deal with employees with such balance? How
the recession world-wide has influenced their construction sector and their
employer behavior and how the experience of these companies can be explained to
other countries for them to take example from such two big nations in context
of construction. The governments of these nations urges their employers to set
their externalized risk for unpredicted market as they never know what’s next
in the market of construction and its conditions through the use of contracts
that are contingent and more supportive in nature welfare of regime market in
Sweden which actually evaluates the underpin resilient preferences of employers
for their contracts that are open ended for construction sector.
The
changed in labor market and ongoing regulations creates challenges even to such
highly developed nations and their strong models for the construction industry.
Contingent employment rate in the construction sector is evident both of these
countries when if they travel between other countries and cross-country
investigation shows that there is potential employment in construction that
provides broad knowledge such as the knowledge of interplay between one
country’s labor market and other country’s changing environmental regulations
and also the employment practices associated with different form of the two
nations with different strategies.
A
main contractor can raise a claim against a subcontractor who may claim about
employer raises against the main contractor as a counter claim and this
situation presents set-off relations to the off-set situations. This allows to
investigate the terms of construction companies including counter claims, cross
claims, counter charge, compensation or retention as these are very critical
matters of a construction industry as they contractor have to make high value
dealings with all other sectors. This study shows the use of amendments in the
constructions sector that the business owners have to make when are to make
dealing with the construction sector as a set off basis for new projects. This
includes amended and un-amended forms that are to be filled before the project
contract. The main form is owned by the contractor who make the deal and the
rules and policies are to be made by him to the subcontractor to follow those
policies for future use as per the set-off conditions. That form includes the
rights owned by the contractor to exercise their off-set rights against
standard rules and for them to have satisfaction over the projects made.
This
is important in longer run as these amendments and forms help to solve disputes
and payment issues late after the completion of projects. The study shows that
even when the subcontractors are given off-set laws by the authorities, they
still tend to be dissatisfied at the end of the project completion and they do
not even complete the contractual proceedings which might have improved their
condition yet they refuse to continue with the work. This shows that the
subcontractors are reluctant in making businesses as they have certain fears in
the construction projects including fear of incurring dispute costs or the fear
of denied opportunities for work in future. To meet the needs of
subcontractors, a culture shift in the construction industry should be made including
a reliance on contractual conditions..
The
offsite manufacturing in the construction industry is a critical element of the
industry particularly in terms of perceived benefits and also incurring the
barriers to implementation. People do not know much about the OSM which is
offsite manufacturing especially by the Australian government to employ it in
their construction industry. The study investigates the state of the art of
offsite manufacturing in Australia and the study reported that overall high
quality and assurance of projects can be undertaken if OSM is used in
construction industry by the Australian government and shows that a range of
suppliers can be readily available to manufacture and deliver their products
and services in the industry and to achieve the approach of manufacturing in
construction projects.
This
includes a range of supply chain and suppliers to incorporate the civil
projects and commercial and housing schemes of the market. Due to the lack of
skills and lack of knowledge about offsite manufacturing, a great issue rises
in the industry of Australian construction industry. But this new technique can
definitely take place in future depending on many factors like better
understanding of costs needed for the projects. Australian construction
industry faces unique challenges and how it runs the industry efficiently by
determining the benefits of the projects in construction processes. Whereas,
offsite manufacturing can lead to uber efficiency in construction industry.
The
poor performance of construction industry in UK is a high concern when
customers are demanding more projects and are becoming increasingly complexed
about their infrastructures and new designs to have in their state. Inadequate
knowledge about inter-organizational matters and lack of cooperation leads to
low performance in the industry and causes the root of problems for the overall
industry. Hence this study investigates the problems and their solutions in the
alignment of construction industry in the United Kingdom for customer’s
projects. Customers are tending towards the need of high value for their money,
high complexity in oil field construction projects and they require paper examines
as a tool for stimulating performance to gain their project with best insights
and best completion outcomes. The industry lacks innovation which bothers the
customers as they need new and technological designs in their projects and this
is at the time when the clients have and increasing demand for such projects.
These problems which are not that unique to one nation only, includes low
productivity, bad environment and very limited use of technological and
business innovations. This arise the conflicting interests in demands as all
project participants are their different goals and priorities while they simply
transfer the risk to the supply chain which further transfers to those who are
generally not able to bear such risks.
The
success of construction project heavily depends on subcontractors and they are
an important part of the industry but still there are many issues involved with
subcontracting while those issues are yet not solved by many nation and they
are seldom acknowledged. There are many issues involved but the main ones are
first the process of selecting the right subcontractors, timeliness of payments
by many contractors, bonding with subcontractors, safety issues, construction
insurance issues, partnering arrangements and agreements. All these issues are
yet to be analyzed and no one really bothers in the construction industry to
address these issues so that the subcontractors have their rights audible.
The
study investigated the differently perceptions of contractors and
subcontractors and general contractors in the construction owning companies and
it showed that the magnitude to retain age of the subcontractors is a bothering
issue by contractors as a labor team to work efficiently. Another issue was bid
shopping in cases where subcontractors have modified work and additional risks
are excessive. These findings are to minimize the negative issues and their
effect on construction projects. They also have agreements with the suppliers
and distributors who then develop relations with material suppliers and
manufacturers.
Unfair
trade practices are very common in construction industry as many factors are
there to affect the work of contractual projects and as long as there is
possibility and not probability, such impediment might keep occurring in the
industry as they ruin the sector badly. This includes many factors like
deception, fraud, or simply injurious trade practices between the construction
companies and these factors affects the work of constructors that also affects
directly the customers and provides many barriers in marketing and advertising
and customer dissatisfaction with the project is another disadvantage. The
contractors due to the competition in the market play with unfair means to make
their name grow in the industry which causes risks and instabilities in the
industry and hazardous reactions. The use of unfair means to gain more
customers and using wrong measures to deceive them in future is what such
contractors do which creates a bad image of the whole industry.
Ye
and Rahman did some research on the work back in year 2010 and he found out
that payment problems in the construction industry in Australia is not new at
all. All such problems have been widely acknowledged for almost more than four
decades from the past research. This is the problem that seems to be much
generalized with the contractors along with the subcontractors as well, they don’t
get their payment on the specified time period. There are much chances that it
may take the form of under-payment, late, delayed payment or even the
non-payment as well. Non-payment or the underpayment is the situation that
point towards the different kind of the situations where the unexpected payment
was never received to them. This may also be considered as the bad debt that is
being written off or get lost completely or partially. This late payment or the
delayed payment in the construction industry is a known situation where payment
is not being given to the head of different contractors or even the
subcontractors on the time. In according to the time line that has been agreed
between the parties towards the contract as well.
There
is a little doubt as well that defaults in the payments towards the contractors
have number of different effects on the different participants of the project
along with the whole industry as well. As we all know and there is not a single
doubt that funding is the basic core for any of the transaction. Late along
with the non-payments have a very fast and immediate effect on the overall cash
flow that in result drive out the multiple contractors along with the
subcontractors as well to any of the source that is being additionally funded
by the means of an overdraft, trade credits or can be any other means as well.
It was being reported in china other than Australia that late along with the
eventual non-payments by the lack of security is being caused or taken place by
the substantial cash that flow number of difficulties leading towards the
different kind of risks for the construction groups or even the parties as
well.
Wong
and Hui in the year 2006 presented a research that states that a prudent
contractor is the one who anticipates for the late payment or delay in the
payment from client that causes a risk factor against the late or even
non-payment during the pricing process. All this becomes the cause of
increasing a cost of the different construction projects like different
contractors pretend to inflate the tender prices if any of the client has the
image for a late payment. Such late and non-payments for the construction of
different projects lead towards the dispute in different projects that are
related to the construction.
Sheridan
back in year 2003 also narrated same thing that failure towards the source
adequate finance and then make payments for all of the completed work related
to the construction on the specified time is one of the major cause for all the
construction delays that are being attributable to the different owners of a
construction project. Construction project is not a small project and number of
different things revolve around it only because of this payment. Until or
unless payments are not being done on the specified time then how is it even
possible for the constructor even to continue the project so clients have to
make sure about this completely that they should only start the project only
when they feel they will be able to pay all the amounts or payments on the
specified time period without making any excuse or getting late.
Kadar
et al. in the year 2005 cited some of the work after suggesting number of
different evidences late payment become the reason for damaging the
productivity of the whole industry at a very large scale. He also narrated that
late payment also causes slippages to the delivery of different materials which
in result causes an impact on the productivity of the whole labor in a complete
industry of a construction. Same opinion was being given by the Durdyev and
Mbachu in year 2011, both of them narrated that late payment poses some of the
significant internal limitations to the productivity of labor on the onsite in
the construction projects in Australia. Construction industry here is noted as
for the low productivity rates of the labor being in the fourth lowest among
all of the organization for the economic co-operation and development.
Number
of different countries same like Australia there are some other as well like
USA, UK New Zealand along with the Singapore have enacted the payments for the
specific legislation and sought out the other legislative solutions to the
payments default in the different construction projects. It is very important
that all of the issues for payment default are being dealt within number of
different construction industries being the matter of significance.
Identification of all the different causes of the different payment problems
with the construction projects is a basic key for the mitigating of different
problems. There are number of different factors that are associated with the
payment defaults in a complete industry of the construction. It has been
explained that payment default is basically because of the two major reasons
which are cannot and would not pay any of the attitude of the payers in any
sense.
The word cannot pay is a kind of situation
that particularly refers towards the financial difficulties of the payers or
clients because of the failure to seek for the funding or not to have enough of
the equity capital along with the improper cash flow management as well. They
would not pay is the situation is a kind of an attitude that lies with an
attitude of the payer. This seems to be very much common for all of the clients
to the late payments for the construction projects to different contractors
along with the subcontractors as well to completely manage out the cash flow
for number of different other projects or even for their own advantage or
benefit. Cotter in the year 2005 also suggested that such late payments for the
construction projects could be because of any unintentional reason although
this would also result in the dire effects to the different players in the
industry of construction.
Construction
industry is known or even famous for many of the unique characteristics that
could further contribute towards the late payment issues in the construction
industry. This construction industry has no barriers at all to the entry and it
is also renowned for the low capital backing but all of this also relies
heavily on the flow of cash for the sustaining of different operations. All
this means that different companies or even the individuals with all of the
little capital base along with the very small experience are completely capable
to set up for the construction business, this has been narrated by Pettigrew in
the year 2005. Additionally, in different kind of the construction projects
there are multiple subcontractors that perform a very substantial role or part
like 70-75% in some of the construction project cases out of the whole or
complete work. One of the Australian Procurement and the Construction Council
back in year 1996 reported that different subcontractors perform almost 80-90%
of the trade works that is related with the different projects in Australia.
All
of this means here that substantial upfront cash expenses for sure need to be
sourced through all these bottom tier parties for the contract. Therefore,
these subcontractors are known to be the worst hit through the undercapitalized
head of the contractors which further lead towards the severe difficulties in
the terms of finance to the different parties down the whole supply chain. This
council also suggested that multi-tiered hierarchy structure along with the
payment obligations which become the cause of late payment in an industry. This
has been exacerbated through the low restrictions towards the different
participants that don’t have enough of the skills along with the expertise
entering into the construction industry in Australia. All of this leads to the
inappropriate financial management that would further result into the different
cash flow difficulties along with the eventual defaults in the payment for
trading the creditors.
On
one other side, it has been stated by the Adul-Rahman et al. in year 2008
studied number of different issues that affects the payment issues in the
construction industry for different projects and it has been found out by him
that the different perspectives of the consultants along with the contractors
different on the different causes or reasons of the late payment. In accordance
to the different contractors, there are number of different reasons due to which
late payment becomes the reason for the delay in construction projects like the
clients who are not responsible, they get busy, they don’t feel the pain of
others, lack of money and all such factors become the reason. But these things
need to be sorted out completely because on the one side or the other no matter
what the reason becomes from the end of client it is always the duty of client
to pay all the payments and debts on time to the constructors. This is one of
the biggest and major thing that has been found out in Australia along with
many other countries as well and it needs to be sorted out. This whole in
return makes a bad image of the whole construction industry.
Infrastructural
projects are the ones that are only known to be successful when they are being
completed on the time that is being committed or mentioned, budget that is
being given along with the quality of the material that is being used for the
construction of different projects. Delay in the completion of all such
construction projects along with the infrastructural facilities is known to be
one of the most critical and difficult challenge with the global dimension that
often lead towards the increased cost of the construction because of the time
extension or even the acceleration as well being the loss of productivity,
disruption in the whole work of construction, loss in the revenue by the
lawsuits among different contractual parties as well as the project
abandonment, this work has been cited by the Owolabi et al, in the year 2014.
Many of the different SSA companies suffer from the major loss that makes
almost millions of the dollars as the result of all the delayed completion of
the infrastructural projects that also undermines the different noble goal for
the reduction of poverty in a society.
Gutman
et al, also did some of the research back in year 2015 that all of the delay in
the completion of the different construction projects has number of different
significant cost implications that as a result bears the number of different
far reaching impacts in the lives of different citizens and particularly in
Australia along with the other SSA countries. Cost also starts getting to rise
because of all such delays that often manifest themselves in the terms of
accumulated interests on the different loans like the high cost of maintaining
the management of staff along with the continuous escalation in the different
wages and price of material as well.
Different studies are
also being conducted in the number of different contexts and from those studies
it has been deduced that although such delay in the completion of all the
construction projects is one of the global phenomenon and it seems to be more
common in the developing countries as compared to the developed countries but
still this issue of late payment is still very much common in a country like
Australia as well, this work has been cited by Alaghbari et al, back in the
year 2007. As already talked above among all of the developed countries like
USA, Canada and many other Australia is also one of them where this kind of
late payment issues are being seen on almost daily basis and constructors are
very much in tension because of this issue. Projects are being delayed and as a
result the whole industry gets disturbed because of this non serious behavior
of the clients.
https://encryptedtbn0.gstatic.com/images?q=tbn%3AANd9GcSJmQcs4LQxxs6Ml3dw0fPMwe4qxBf1TwEIgYbwlzyvtI4xsg0E&usqp=CAU
There
are multiple factors that have been identified by one of the researcher that
become the cause of late payment issue in the construction of different
projects. Such reasons include the inappropriate planning, poor site management
of the construction project, lack of experience, and the non-serious behavior
of the clients. Everyone in this world is doing work to earn money for
themselves and here I believe that the life of contractors, subcontractors
along with the whole labor is completely affiliated with payment of the
clients, obviously the construction projects also get delayed and it makes a
negative impact on the whole industry but on the other side these payments are
also the only source of income for them and when they don’t get the payments on
time they get really worried and they don’t have any other way to earn money.
So it should be the responsibility of clients to make such payments on time so
that nothing gets effected. All these issues of late payment need to be taken
seriously by all means and by everyone.
It
has also been studied by one of the researcher that these issues are not new at
all and one living outside Australia won’t even believe that people even suffer
from such issues because Australia is a very much developed country but yes
this is absolutely true that late payment is a continuous issue in Australia
and people along with the Government is not taking any of the serious action
against it to overcome this factor or even stop it so that in future it can get
reduced. This is the responsibility of clients along with the other parties to
make sure that each and every step is complete and it is being done properly
and on time as well so that there don’t become any chance for the late payment
at any cost.
types
of financial arrangements between parties in construction industry in Australia
In this article as it has been suggested
by Moerdijk,
Derek (2016)
that agreements of programs and projects which has been acknowledged as in the
form of project gaining for domestic excellent structured engineering projects
likewise for those which brought in rail, road, sewage and water services
regions with in Australia and New Zealand. Furthermore, the project agreements
are the evidence in only two institutional development projects which has been
presented within the Australia. It can also
According to some of the Bryan, Michael (2017)
it has been suggested that some of the financial risk are now become one of the
most obvious catchphrases but the association among labor and finance were not
be industrialized in well mannered. In this most of the cast which is belongs
to labor is mainly has been taken as the distributive suspect of growth such as
value of stakeholders as well as the denationalization of communal framework
and the reform of labor market. Moreover, the study also gives the building in
the construction industry and allocates the expansion of financial logic which
has been presented with in the production and work and in that area. Along with
the phenomenon of fluidity and threat, in this it has been investigated that
fundamental links were not be just matches, among financial development and the
restructuring of the lucidity and construction of work in the Australian
construction and property services industry. In this regard government now
needed in the communal area projects which has been implemented on the rigorous
gateway or platform procedures.
It can also be said that while having
agreement it has been argued on the delivery of best value and enhanced value
for money despite from this the typical aspects likewise construction and
design.
https://law.unimelb.edu.au/__data/assets/pdf_file/0007/1686265/Research-Report-Standard-forms-of-contract-in-the-Australian-construction-industry.pdf
current
legislative framework that allows sometime unfair payments to subcontractors
As it has been suggested by some of the Matthew, Christopher,
Anand (2018) that in some of the previous centuries there were many
jurisdictions from all over the universe have been indorsed the judicial reform
programs to indorse the payment of security along within their construction
industries. As well as it has also been
mentioned that there were two connected bases of these reforms in which make
sure about prompt of work which as been done. Furthermore, the fastest
provisional settlement of diffusion over the number of payments which has been
done for the work. Moreover, the paper also investigates about the latest
reform procedures in Australia mainly emphasis on the currently
As it has been suggested by ZiKeng, SioKah
(2018) Types of payment issues that issues which is related with payment are
commonly which has been based in construction industry of Australia, whereas
upstream companies has been harmed their responsibilities which is associated
with payment to force the downstream players likewise Sub-constructor has to be
accept the various conditions which has been made by conditions. Despite from
this it can also be said that there is no permission for the evasion which is
available in various agreement of Sub-contract to simplify the flow of cash and
seek doubtful determination which has been attain from the ascription and process
is quite exclusive and time taking as well.
According to SitiSuhana, Nuremma (2017)
payment issues is the most sensitive issue which has been presented in the
construction industry of Australia and the number of these issues as been
enhanced mainly in current years. As well as in the content of Australia a wide
range of studies has been made on this topic. In this it can also be mentioned
that there are some of the problems has been mentioned which is related with
payment in this it has also been mentioned that payment of some money which has
been given in the return for good.
In this it has been stated by Peters,
Kern (2019) that delay and losses in payment which has been
presented in the construction industry which has been continued as the main
concern for the practitioner of construction industry. Moreover, the
investigation has been made on the key factors of delay in payments and losses
which has been assume in this research along with the aim of seeking modifying
solutions.
https://pdfs.semanticscholar.org/8c1e/18423d8e435ca3c4b6a0a007edc02c01696d.pdf
In this regard some of the Badroldin,
Anas, (2016) has been mentioned which is related with the effectiveness of
contractors in the cash flow which holds the frequency of payment, delay,
retaining fund, profit margin and some other factors as well. Late payment
which has been made by client has now become one of the most effective habit along
in the construction industry and the threat, and had some uncomfortable
relationship between payee and payer along of supply chain and various other
management programs which has been presented in the construction industry.
Moreover, the main purpose of this article is to investigate about the late
payment practices within the construction industry.
As it has been suggested by Wibowo, Naniek
and Anita (2018) that significant development has been featured around the
universe as the fundamental rule of constructing up and overseeing management
strategies which is related with arousal in the price of oil and prices of
energy as well. In this it has also been observed that some of the supply chain
issues has been associated with this field and many of them have been
fragmented and not connected properly. GSCM also pursue to incorporate
atmospherically
In this it has been stated Shabbar, Fahim,
Jamal Uddin (2017) that the success of project mainly depends on the various
dimensions and in tis one of the above mentioned has been explained which is
the completion of project on time. It can also be said that one of the most
significant things is the matric which has been presented for the success of
any project. Despite form this some of them said that delay which has been made
in project has been attain as in the form of decreased level of confidence
along with
Thorpe, Peter (2017) said that the industry
of construction sometime argued for their bad performance on the quality, cost
security and speed mainly. as well as there were any reasons has been presented
for having argumentation on this. Initially the industry mainly based on the
various practices and every of the reason play the significant role which make
sue about the quality of product. The bad performance of one party would mainly
affect the performance of other upcoming party.
This can be taken as the sequence of supplier and
customers relationship. As well as it can also be said that quality performance
is quite complex to make sure about the traditional procedures of construction.
Despite
from this poor performance would also move toward disagreements and
argumentative relationship among parties.
https://www.quora.com/What-are-the-benefits-of-project-finance
In tis it has been stated Ganapati ( 2016)
that in the construction industry some of the Task Force done an investigation
to find out quality management I n the organization and its various techniques
which has been being working to enhance the quality performance in construction
and engineering industry. In the study it has also been mentioned in which the
summary of findings of the research and reveals the phenomenon of total quality
management which has been utilized successfully in the production of industry
and it has been utilized successfully in the productive energy has been adapted
and applied by the owners of Australia and contractors mainly.
TQC now serves a dual role in Australia as
an influential advertising instrument making sure the quality of their goods
and it has been taking as the utensil for cultivating organization efficiency.
As well as in this a philosophy has been presented which mainly pay emphasis on
transforming the administration culture to being amenable to quality
improvement. The perspective of this philosophy starts with disbelieving the
supposition that there is an association among quality and cost. Crosby
preserves that doing a job right the first time is more cost-effective than
assembly errors, tracking them, and modifying them.
According to Shah, Alotaibi (2018) it has
been mentioned that in the construction industry there are many challenges and
demand has been presented. Furthermore, some of the ethical practices which is
associated with constructing and building industry is the significant
importance in the exact way of other disciplines. As well as it is better to
understand some of the unethical practices along with the first rank between
the serious situations which mainly effect the construction and building
industry. In this regard it has been stated that some of the construction
industry also facing some of the ethical issues which has been based but
limited in some of the conflicts of interests, professional in capabilities,
poor delivery of work and mainly the professional misconduct.
Massing ham, Rada (2017) The main aim
of this article was to investigate the fundamental struggle between a lawless
culture and secretarial performs within the content of the Australian
Construction Industry. This will give the opportunity to investigate and
considering role as a legislation procedure which has been presented within the
content of the Dangerous Accounting viewpoint of whether accounting practice is
objective or subjective. For having this the main purpose was to identify the
social system that auditors work within this industry. By investigating the
motives why guideline of the construction industry had to be so complex and
recommended how it might be enhanced the research subsidizes to theory of
public interest.
Taking account, the significance of the role
of secretarial
As
well as it has also been mentioned that there were two connected bases of these
reforms in which make sure about prompt of work which has been done. Furthermore,
the fastest provisional settlement of diffusion over the number of payments
which has been done for the work. This can be taken as the sequence of supplier
and customers relationship. As well as it can also be said that quality
performance is quite complex to make sure about the traditional procedures of
construction.
Generally,
this section of the research is concerned with describing and elaborating the
materials, techniques, and methods utilized for creating this research.
Techniques and methods related to secondary research and primary research are
used for the collection of useful information and other concepts. For instance,
these methods include observation and different types of literature review with
respect to journal articles, newspapers, and reports. However, it is quite
critical to note that there are not many researches that focus on payment
issues experienced by subcontractors. Therefore, this research not only makes
the use of previous studies but also observation as a primary method for
collecting information and exploring payment issues
Actually, the development of research its connection with
the previous information is considered a significant or critical part of every
process that is associated with both academic and professional practice. In
recent times, however, it has become quite complicated. For instance, within
the chosen field, the development of knowledge and information is increasing
rapidly. Meanwhile, at the same time, it seems to remain interdisciplinary, not
to mention fragmented. That is the reason why literature review is considered
an important method for constructing a methodology. After all, it helps in both
researching and studying, and has been utilised in this research. In general, a
literature review can be simplified as a simple and systematic technique of
finding information and effectively synthesizing it. However, it is important
to note that there are some gaps left by literature review.
Although a literature review helps in finding
information, it relies on the existing information and makes the use of it. It
implies that the scope of research is limited to only existing studies. If a
research topic or issue has not had any researches conducted on it, then the utilization
of literature review has not meaning. In addition to it, literature review is recognized
as a secondary method because it does not make the use of primary data, which
makes unreliable to a degree. In order to fill these gaps and eliminate any
uncertainty, observation as a primary method has been utilized. Typically,
observation includes mechanical or human observation what humans do or what
incidents or events occur during a specific situation. In simple words,
information is gather by the observation of selected or appropriate sources.
Observation is considered an important research method because it enables a
researcher to directly record the behaviour of people along with the issues
they experience. This research method is one of the easiest techniques that can
be considered by a researcher for exploring a concept. In this section, overall
design of the research has been described together with every procedure that
has been utilized for accomplishing the objectives of research and finding
information. For example, research design involves philosophy, methods, and
strategies considered for acquiring information
For the development and composition of this study, two
philosophies have been utilised including interpretivism and positivism.
Basically, a combination of these two philosophies has been used for finding
information and developing this study to explore the concept of payment issues
faced by subcontractors. Generally, interpretivism, as a research philosophy,
aims at the interpretation of different elements and components in a study.
This philosophy is selected when the secondary research techniques such as
observation or interviews are chosen for obtaining information. On the other
hand, when it comes to positivism, it is often utilized when primary methods of
research are considered for acquiring information. It seems to involve finding
relationships and connections between two or more variables and gathering
information from observations to answer the research question. In case of
interpretivism, only research objectives are considered important for
performing the research. Additionally, this philosophy seems to compliment and
support those studies that have hypotheses in them
It can be said that both of these philosophies are two
basic or fundamental steps for performing a research. For instance, positivists
tend to take primary or quantitative methods of research into consideration
while secondary methods of research or qualitative methods are chosen by
interpretivists for exploring the concept. It is determined by positivists that
society tends to modify the behaviour of a person along with everything around
him. In contrast, the philosophy of interpretivism focuses on background of the
issue and it depends on finding information through the utilization of
different sources and platforms, specifically reliable and authentic sources.
It would not be wrong to say that both of these philosophies are quite
different from each other. There are times when a mixture of these two
philosophies is utilized for finding information and exploring the research
topic. In this case, such a hybrid approach is used for approaching the topic.
Generally, positivists tend to identify and consider
different social factors that have the potential of influencing behaviour and
attitudes of people. Normally, such researchers find correlations and
relationships between different types of supposed variables. It should be noted
that such an approach is considered only when primary methods of research are utilized
for acquiring necessary information about the topic. And since a primary method
has been utilized in study in the form of observation for collecting
information, this approach is used in this research. Interpretivists seem to
determine that for the description and exploration of a topic, a background
study is quite important. In the absence of this information, it is not really
possible for accurately explaining the concept or topic. For doing so,
qualitative methods are considered by them for accomplishing the research
objectives. In accordance with the nature and objectives of the study,
interpretivism paradigm has also been considered. Both of these paradigms have
been combined to be used in this research.
The main reason why a combination of both qualitative and
qualitative methods has been used in this study is because there are some
certain limitations to both of them. For instance, when it comes to
observation, it lacks evidence that can be obtained from a literature review
while a literature review lacks primary data that is provided by observation.
Therefore, both of these methods are used for filling the gaps and approaching
the research topic with a combined power to achieve the desired research objectives
effectively
When it comes to conducting a research, there are several
approaches that can be considered. All of them help in acquiring information
but they seem to vary from study to study on the basis of nature and objectives
of the study. In this case, however, a hybrid research approach has been utilized
that combines deductive and inductive research approaches. Generally, inductive
research approach is utilized for finding information when qualitative methods
of research are considered for the exploration of topic as it seems to
compliment these methods. When it comes to deductive research approach, it is
important for the researcher to make the use of quantitative methods.
Considering the fact that both observation and literature review have been used
in this research, it is only sensible to make the use of both of these
approaches. Therefore, a mixture of inductive and deductive approaches has been
considered in this study. This hybrid approach has enabled the accomplishment
of research objectives
The key difference that exists between these two
approaches is that deductive approach has the aim of experimenting a certain
theory while the objective of inductive approach is all about exploring an
existing topic and building on the previous studies. As it has been explained
above, when a specific research approach is selected, it seems to have some
specific gaps. The same can be said about these two approaches. If an
individual research approach is utilised, it will not be as effective in
catering the needs of this study as a combined approach that makes the use of
both deductive and inductive approaches
It would not be wrong to say that quantitative techniques
of researching and finding information are also known as primary techniques and
they differ completely from qualitative techniques. There are numerous researchers
and authors who seem to consider these methods as more reliable and authentic
than qualitative methods. These methods include surveys, observation, and
interviews. These methods are different from each other and they have different
requirements. In this research, observation as a primary technique has been
selected because it is not only the easiest but also time-efficient.
Observation might be considered as the foundation of normal life for most
people as people tend to observe what surrounds them. Humans observe, analyses,
and draw results from their surroundings. In accordance with the nature and
objectives of the current study, observation has been recognized as the most
feasible method.
Qualitative
methods or techniques are also known was secondary methods of research. As it
is implied by their name, these methods tend to focus on concepts and theories
rather than on numbers. They are unique and different from secondary techniques
in the sense that they involve methods that need researchers to perform
research themselves instead of relying on previous researches for exploring
their own research topic. For example, one of the most common methods is to
perform a literature review that has been considered in this research. It
involves going through different studies conducted on the topic before to
accomplish the current research objectives.
Actually, the decision about which methods and techniques
to consider while performing a research study is generally made by considering
the objectives and nature of the study. For example, this study is aimed at
exploring and analyzing the payment issues experienced by subcontractors. This
is quite a unique topic and research on it cannot be performed in a short. In
addition to it, for obtaining precise and accurate results about this topic,
only observation cannot be used. Therefore, other than observation, literature
review has been selected for ensuring that there are no gaps left in performing
the research
Observation is actually one of the most diverse and
important research techniques for obtaining information. It includes different
approaches, techniques, and types that might be difficult to compare in terms
of anticipated results and enactment. Generally, there are three types of
observations including participant observation, indirect observation, and
non-participant observation. All of these observations are quite different from
each other. For instance, when it comes to participant observation, researchers
strive towards immersion and participation in a certain situation, for a longer
time period, for acquiring an insider comprehension of this culture as a
visitor or as a member. Meanwhile, in non-participant observation, researchers
aim to comprehend the interactions, relationships, and the world in a new
manner without evaluations and categorizations. Lastly, in indirect
observation, researchers tend to depend on observation carried out by others,
on different types of records, documentations, and auto-observation
When it comes to choosing the type of observation, it is
important for the method to be adapted to the scientific context of the
research and initial research issue. It is possible for observation to be
either the key or main method in a research or one of several methods
considered in a research for enhancing the quality and precision of a study. In
this case, non-participant observation as a method of observation has been
considered.
Actually, direct participant observation is recognized as
a classical research method and it is still appreciated in different fields and
researches that primarily focus on qualitative results, similar to this case.
Direct participant observation is a tiring and time-consuming method and that
is the key reason why instead of this observation, non-participant observation
has been considered for obtaining information and pursuing the research
objectives. This kind of observation seems
to provide researcher with the ability of collecting data about different
social practices in a context that is seemingly natural to them. Through
participation in the life of a certain community, the researcher is enabled to
interact with others and document the useful information. Invaluable
information is provided by direct participant observation on topics that are
difficult to be studied. In addition to it, this type of observation is capable
of indicating both differences and similarities between what is spoken and what
the actual practice is, providing specific and tactical knowledge.
Non-direct observation is quite common in terms of Organisational
studies. With the application of a non-participating observation, the
researcher has an opportunity of getting closer to a research field while
retaining the position of a guest or outsider. This separation defines the role
and identity of the researcher while leaving plenty of possibilities for
implementing the role. Actually, some researchers tend to stay in the
background while minimizing the interference. It enables people to forget about
researchers and let their Organisational life have them continue working in the
flow. Therefore, it designs good conditions for taking notes while standing
aside. Other researchers tend to act a friend. This role enables a researcher
to ask questions, which serves to provide additional answers and information to
the researcher. It is quite important to note that even while effectively
blending into the context, the researcher seems to continue participating in
the everyday life of the audience, subcontractors in this case, becoming a part
of their context.
In non-direct observation, it is quite important to
create a trusting relationship with the participants for helping people feel
comfortable and record their daily routines. Keeping distance rarely assists in
collecting information and it is quite critical to tune in to social situations
for bettering understanding interactions. Similar to participant observations,
this technique needs self-reflection on the behaviour of researcher as well.
In this case, the primary community or audience for the
research was subcontractors and the researcher let them know about the research
and that their behaviour would be recorded. This study was performed after gaining
their approval. Although observation has been utilized as a primary research
method in this case, the focus of this research is on qualitative data produced
from it. It is important to note that indirect observation means the utilization
of one-sided mirror. For instance, a voice recorder or camera is utilized for
observing or recording events in which researchers do not participate. Indirect
observation, in the broader sense, is also a set of techniques that enable the
researcher to acquire information about present or past situations. Although it
is also a useful method of collecting information, this method has not been
considered just like participation method because these methods have been
identified to not provide the information and convenience that are needed.
Although participation observation is effective, it is a very time-consuming
process. Meanwhile, indirect observation has not been considered because it
would have not been insightful
Actually, the development of research and its relation to
the existing information is recognized as a basic block or foundation of all
activities and processes that are associated with the academic research. With
time, however, various complications have emerged in this process. Literature
review has been considered in this research because some researches have
already been carried out on this topic and making the use of these researches
would help a lot in developing this research. A literature review can be simplified
as a systematic manner of collecting previous and existing information, and synthesizing
it. As a research method, an effective literature review is able to develop
quite a powerful foundation that is capable of facilitating the development of
a completely new concept and progressing the existing information on the topic
Through the integration of different perspectives and
ideas from different empirical researches, research objectives can be achieved
with a strength and power that are not possessed by individual processes. For
instance, even observation or any other research method does not give
researcher with the ability of obtaining different viewpoints about a specific
issue like a literature review. It also helps in providing a brief overview of
different features and aspects in which the study is disparate and there are
some gaps that need to be eliminated. In addition to it, it is quite a reliable
technique of synthesizing the findings of research for revealing different
aspects in which more study is required and indicating evidence.
However,
traditional methods of representing and explaining the literature seems to lack
proper description and thoroughness. This seems to result in the lack of
information and knowledge of what researchers seem to say and indicate. Because
of it, there is a likelihood that researches might be developed authors on
misguided and erroneous assumptions. When researchers tend to select and choose
the evidence on which they should create their research while ignoring counter
arguments, they seem to experience issues. Furthermore, even though methodology
is accurate and valid, there are several issues with what is seemingly making a
good contribution to the study.
Recognizing
relevant and prior information is considered quite significant for every type
of research project. Generally, whether a researcher is reading a journal
article or a newspaper, he starts by explaining previous researches for mapping
and assessing the area of study for the emphasis on research objectives and
justification of research questions. Actually, this is regarded as a literature
review but for a literature review to be an effective part or component of a
methodology, there are some specific steps that need to be considered. In this
study, all these steps have been considered. Similar to every research, the
value of a study seems to depend mostly on report clarity, what was carried out
in the research, and what was determined. In accordance with the objective of
literature review, several guidelines, standards, strategies, and purpose of
review can be utilized for carrying out a literature review. This review’s
process can either be broad or narrow. In this research, historical researches
and concepts on payment issues experienced by subcontractors have been studied
and analyzed. Literature reviews are considered quite useful when a brief
overview of concepts should be provided. This kind of literature review is
performed for the analysing of a knowledge state of a specific theory or topic.
For example, it can be used for the description of a specific issue,
determination of gaps in the research, and development of different research
agendas.
For
writing a literature, it is quite significant to prefer both peer-reviewed
articles and books because both of them are valid and they are able to provide
researchers with testable and reliable information. For conducting this
research, both books and peer-reviewed articles have been considered. They have
provided sufficient information on payments issues for performing the study.
Actually, for every type of research, an important role is played by literature
review as a foundation. They are capable of serving as a foundation of development
of knowledge, offering proof or evidence of a specific effect, and it can have
the capability of developing new ideas for a specific field as well. Therefore,
a literature review seems to serves as a foundation for future study but it can
be quite difficult to conduct a literature review in an effective manner. To
ensure the relevance and accuracy of this literature review, a systematic
approach was used for exploring the journal articles and books associated with
lunchboxes. Additionally, relevant keywords were utilized for ensuring that
only relevant sources were found and explored. This approach allowed to
identify resources sources that were not only latest but also relevant
While performing the study, it was made sure that this
research was as precise and relevant as possible. For example, while performing
the research, there are some certain keywords that are used for finding
information and necessary journal articles along with other reliable sources
for identifying journal articles about payment issues. Additionally, a certain
time-limit was chosen within which journal articles were selected. This
approach enabled the selection of journal articles which were only latest. In
addition to it, only relevant journal articles were considered in this research
and not irrelevant studies. All irrelevant studies were rejected and they were
not analyzed for obtaining information.
Another important aspect that was considered in this study were specific ethical standards. For every study, there are some certain guidelines and ethical standards that are important to be recognized and considered while performing the research. If these ethical standards are not considered, the study is not recognized to be ethical. In this study, it was ensuring that every ethical standard was considered. It was affirmed that no would get hurt during the research. While observing the audience, all the people were informed of the research objectives and after informing them, observation was carried out. Meeting these ethical standards ensured that the research conducted is feasible and it meets all the necessary standards which are important for a research to be proper.
The
research studies have shown various factors that become the major reason for the
delay in the payment in Australia’s construction sector. The research studies
have shown that the major reason behind delays is associated with clients,
consultants, and contractors. In one of the studies it has been analyzed that
the major cause of delay in the payment occurs due to the errors which immerge
in submitting the claims by the contractors. Sometimes the contractors submit
the claims that are wrongly evaluated and the submitted documents do not follow
proper formatting. Sometimes contractors do not submit different documents that
are required by the contractor to submit
It
can be said that the contractors need to submit the claim on time and sometimes
they have to repeat the whole process again so that certain changes can be made
in the documents they need to submit. If the research studies are analyzed
critically than it can be said that if the organization needs a long time for payment
and procurement than it means that the organization is experiencing financial
problems. if the delay occurs in the payment of different construction
processes than construction processes can experience delay or the whole
construction process can come to a halt
The
research studies have shown that the payment of the project is done on the
basis of the progress of the project. The contractors have to submit the
billing documents and the % of completion of the project which is approved by
the project manager. The general procedure is to release payment in the 14-day
period. However, the delay in the construction process of Australia occurs when
the contractors forget to submit certain documents that were required to
submit. It is the duty of the payment officer to analyze all the documents
before giving the payment.
It
has been seen that when any document gets missed then the delay in the payment
occurs. the standard procedure for this issue is that the whole documents than
sent back to the contractor so that it can verify all the documents and can
provide the missing document which I required by relevant authorities. This
process takes approximately 2 days in the treasury and 3 days in the finance
department. In short it can be said that a week delay occurs when the documents
get missed. So it is recommended to the contractors to provide all the
documents to the payment officers so that delay in payment can be mitigated
The
results of the existing literature show that delay in payment is one of the
most complex, costly, and common problems that have to be faced by the
Australian construction projects. The research studies have stated that the
delay in payment makes the whole construction process costlier and the pressure
on the project manager increases to deliver the project on time. The studies
have shown different factors that immerge from delays in payment. The factors
include overrun of cost, dispute arbitration, and overrun o project time, etc.
in short it can be said that the delay in payments hasa significant impact on
project completion and its successful delivery.
The
researchers are different studies that have provided different causes for delay
in the payment. The late payment in the construction process might occur due to
financial problems that the organization is facing. When the organization faces
financial problems it cannot pay a specific amount on time. Therefore, late
payments are being made to consultants, contractors, constructors, and
suppliers. The result of this overall issue will be a delay in the project and
in the worst-case scenario the project cannot be delivered to the client
because there is not enough money to pay for the construction project
In
one of the research studies, the researchers have identified various factors
that become a reason for the delay in the construction sector of Australia. Theresearchers
have identified twenty-eight factors in the study. These factors include issues
related to contractors, issues related to clients, material related problems,
equipment related problems ad problems that are associated with consultants.
According to the researchers the external environment factors have a huge
influence on the late payment. Overall various factors cause the delay in
construction and the project manager should create proper strategies and
contingency plans to mitigate such risks.
The
supply chain-related issues are also a major problem for the delay in payment
in the construction industry. In the construction project the suppliers play an
important role. The suppliers are the one who supplies the material on the
construction site. Sometimes due to differentcircumstances the suppliers unable
to supply the material on the construction site on time. When the project team
is going to get late supplies than the payment mechanism will also experience a
delay. So it is evident that the supply chain-related issues also become a
major reason for the delay in the payments
As
discussed earlier the external environment factors have a huge impact on the
construction project. The external environment factors such as political
factors, economic factors, social factors, technological factors, legal factors,
and environmental factors all have an impact on the project completion. When
the economic factors change the price of the construction project changes. It
means that the contractors will have to make changes in the current billing to
incorporate changes which occur due to change in economic conditions. This
process then takes extra time which will ultimately delay the payment to the
contractors. Such issues can be mitigated with proper strategies that consider
external environment changes
The
sudden changes in government policies can also have an impact on the
construction project. Sometimes the governments make such rules and regulations
which causes a delay in the construction processes. Sometimes new laws are made
which increase the work of the project team and as a result the construction
process experience delay. The best solution to this problem is to create a plan
in which various scenarios can be discussed. With a proper contingency plan and
risk-mitigating plan the organization and the project team can reduce the risk
up to a lot of extents
One
of the research studies that are analyzed in the extensive literature review has
shown that there are various issues that become the reason for late payment.
The study has stated that the perspective of contractors and the consultants
regarding the delay in payment is different. According to the contractors the
local culture, financial management of clients, implementation of governance,
and delay in getting certification are some of the major causes of delay in
payment. However according to consultants the major causes of delay in payment
include delay in approval, underpayment of different clients, and poor
management. Overall the study has stated that poor financial management is one
of the major causes of delay in payment
The
studies have shown that the delay in payment in the construction industry is
not only the problem of Australia but also many other countries are facing this
problem as well. The only thing that should be a matter of concern for the
relevant authorities is that the ratio of delay payment is the construction
industry of Australia is quite high when compared to other countries. When the
payment is delayed in construction project not only the project will experience
problem but also the contractors who earn through these project suffers a lot.
The
technology is becoming advanced day by day and the project managers today utilize
the latest software and equipment for managing the project. However, despite
using the latest technology the issues like delay payments occurs in project
management. The reason for this is workers who do not know how to use the
latest technology. Labor-related issues are one of the major reasons that cause
delays in the overall payment process. Sometimes the labor that is recruited
for the construction process does not possess the skills and abilities that are
required in the project
It
is highly important for the project team to recruit such employees in the
construction project that are not only qualified but also include the skills
through which they can perform the duties efficiently. It has been seen that in
different projects such as individuals are recruited who do not have much
experience regarding the project. The result of recruiting such employeesis the
delay in the overall project. Sometimes the workers do not prepare the
documents effectively which is required by the payment officers to release the
payment. It has also be seen that due to lack of experience such issues occur
in the project due to which project experience complete shutdown.
It
is highly important that the project manager should play the role of a leader
and constantly navigating the project activities. The project manager should
keep on taking feedback from the team members so that not only the issues of
the team members can be addressed but also each activity of the project can be
delivered or completed according to the schedule. The project manager should
use the latest software for managing the project activitiesand financial
activities so that no payment delay will occur
As
discussed earlier the poor financial management is one of the major reasons for
the payment delay in the construction industry of Australia. The poor financial
management occurs when there is no financial expert in the project team. Furthermore,
the problem gets worst when the latest accounting software or financial
management software is not utilized for managing the financial activities. When
there is poor financial management than the possibility exists that delay in
payment will occur which will disturb the whole project. The solution to this
problem is to recruit financial experts in the project so that financial
management activities can be performed accurately.
The
financial management issues are linked with the delay payment issue. For instance,
the project team includes the individual who does not prepare the listed
expenses of the project accurately. When the project manager has reviewed the
expenses list it found out that the list has skipped some of the expenses that
are incurred in the project. It means that the individual will have to create
that list again and the payment of the expenses will get late because of
inaccuracy in the list. Therefore the accuracy of the financial activities is
highly essential to mitigate delay in payment
In
this a large portion of the cast which is has a place with work is for the most
part has been taken as the distributive suspect of development, for example,
estimation of partners just as the denationalization of common structure and
the change of work advertise. In addition, the examination likewise gives the
structure in the development business and dispenses the extension of money
related rationale which has been given in the creation and work and here.
Alongside the wonder of ease and danger, in this it has been examined that
basic connections were not be simply coordinates, among monetary turn of events
and the rebuilding of the clarity and development of work in the Australian
development and property administrations industry. In such manner government
presently required in the collective region ventures which has been actualized
on the thorough entryway or stage strategies.
Australian
framework utilizes open private associations essentially known as PPPs. The
beginning times are consistently significant with respect to all development
industry and instruments so as to get great and prosperous result. Yet, there
comes an absence of methodical research in discovering the genuine sort and
nature of the basic factors that are required for appropriate research
examination which are influencing the productivity and viability of open
private organizations. The PPP utilization comprises of four principle
variables or classes as acquisition, partner, hazard and fund and without these
classifications, the development ventures are about inconceivable. Furthermore,
these components are additionally related to their separate sub-factors
The investigation depended on observational and non-experimental information while the exact information was additionally arranged into dangers, connections and financing. Though, non-exact information was additionally ordered into dangers, financing, achievement and concession period. Regardless of there are numerous examinations about PPP formative undertakings yet at the same time nobody has appropriately summed up what should be done further. This investigation uncovers the points of interest and burdens of the PPP venture which has been exceptionally praised by individuals as such activities consistently need high arranged enactments. For the most part, the state or the concerned city talks about such issues or some administration offices for the benefit of the decision government uncovers their thoughts regarding financing approaches and protection from change
The
investigation surveys the state of agreements that the development business
relate as a fundamental edge of reference and to sum up the entire idea. There
is an extraordinarily approved sanctioned relegated to investigate the
agreements as from 1985 – 2004, the Royal Institution of Chartered Surveyors
utilized studies to research the offer and estimation of agreements relying on
various acquirements, their courses and their diverse condition over the area.
The explored qualities and the portions of agreements help in distinguishing
the genuine examples of agreements in development industry and their conduct
with various acquisition courses in the development showcase and thus the
examination will research and study the entire hole between the acquirement of
courses and development agreements and how the entire whole situation is being
dealt with all around the globe and what measures are being taken to conquer
the hole
The
troublesome idea of the development business and its exceptionally divided
classes are consistently up-to guaranteeing the changing degrees of
globalization with world changing headways in the business and this is one of
the elements why the business is upsetting its impact to get the hang of
overseeing approaches like vital alliances to offer capacity to the different
members of the business and to upgrade their abilities. This informs a
profoundly confined planned future concerning the business which exceptionally
relies upon the variables that development firms mull over when they need to
choose their key and association accomplices to check their reliability to go
on further professional interactions with them and to pick up involvement in
their insight.
Australian
development has consistently been running on customary standards and aggregate
understandings of their workers that have likewise made them win numerous honors
for their consistency and mechanical connections that additionally accomplished
them modern honor and made the business propitious of their standards and
councils. The most compelling motivation behind every one of these prizes and
their positive picture was their workers and worker's organizations that
propped them up with their reliability and dedication. Aggregate understandings
used to be the reason for singular course of works and their total plans used
to depend upon that. For instance, causing the workers to talk commonly about
their creative thoughts which consistently supports the two gatherings for new
plans
The
development area requires elevated levels of trust and incorporation between
flexibly chain and cooperation of them with the development segment. The
flexibly chain can accomplish nothing alone as it works with the assembling
from where the development begins. Yet at the same time the connection between
the contractual workers and subcontractors is vigorously being affected by
numerous variables that causes poisonous characteristics of doubt. This
examination researches the difficult and revolting components that impact the
trust connections between the contractual workers and their subordinates and
the manners in which how they can keep up sound dependable relationship to
carry accomplishment to the development ventures. This made the specialists to
direct a few meeting with the temporary worker and their encounters with their
accomplices and different organizations. There were numerous variables that had
an impact over the trust relationship including financial changes, atmosphere
changes, installment rehearses, future work openings and occupation execution
and the setting of the undertaking both the gatherings are dealing with
Incorporated
undertakings are to be structured by community approaches and objectives of the
multiparty understandings of the development part. While the customers assume
the most basic job as everything relies upon us how we use and dispose of the
items which decides the post-use estimation of the item utilized. For some,
ecological job begins with devouring the item and discarding it in the reusing
container and that causes them to feel that they have done their part. While,
we as a whole know that we ought to reuse however sadly, knowing how and where
to reuse it is still under the dim. Individuals need to have mindfulness where
they can discard the correct items so they can be utilized productively for
reusing purposes. Knowing appropriate methods of disposing of your effects
ought to be run as open mindfulness
The
administration strategies are presently installed with development encouraging
foundations and approaches to guarantee that the development division
experience less dangers to private gatherings. This examination researches the
talk connection between contract conditions and venture parts. Conventional
tasks experience numerous infrastructural dangers and conveyance courses of
action are constantly undermined. Another type of electronic integrative
applications is named as infrastructural ventures which are growing up the
whole way across the world. Its prevalence comes from the unmistakable quality
on intelligent client commitment and support on the development ventures while
sewing together outsider information. The manner in which it spreads its underlying
foundations everywhere throughout the Internet makes it call a high delicate
undertaking understanding drawing upon content which did not depend on the
source understandings yet recovered from different information sources that lay
outside its authoritative limits.
Venture
conveyance frameworks have inserted new roots into venture alliancing
particularly in the business building area. It is a community model of
individuals and the frameworks that describe the development ventures. Inside
the previous decade, individuals when presented with this term business
building development, seized on the open doors rising in the media-circle that
already basic develop crude material or assembling needs advances used to give.
It turned into much simpler to join gracefully chain and pieces of crude
material and structures into one, new and various substance. It likewise
incorporates the client characterized entryways in web content applications
that can on the whole make customized and high-esteem information item for
dissemination and utilization. Organizations are slanted towards creating
applications that gives the endeavor space to mashup electronic substance.
These information mashups are recipient for power-clients, investigators or
business people who typically used to depend on dashboards and filter through
reports with basic information beforehand
Number
of various bombing contractual worker firms used to be productive endeavors
back throughout the entire existence of liquidation. Under the procedure of
capitalization, there were such a large number of troubles in getting certain
credits alongside getting the significant expense of getting account and so on,
all these used to cause contractual workers for the consummation of specific
tasks by having the negative completion of the equalizations. So along these
lines, it is basic and imperative to have the best possible arranging of income
alongside its investigation for the accomplishment of any development venture
Significance
of the installment is being progressed further in the development business is
one of the capital serious, capacity of the customers to pay the constructors
on time will decrease the income issues of various constructors of the
development business. For the most part it is being acknowledged that delay in
the installments of development in Australia is answerable for the extreme
income issues and especially to the constructors as their life rotates around
these development extends and paying late would have an overwhelming and
stunning thump on sway down the entire acquisition chain. Installment of the
undertaking that is being granted could regularly be founded on the advancement
of the specific venture. There is a particular requirement for the contractual
workers for construction labors
The
ineffective project management is also a major cause of delay in payment. When
the project is not managed by the project team accurately than various issues
arise. Sometimes the faults in the construction design occur that not only
increase the cost of the project but also on-time delivery of the project
suffers. When the project is not being managed accurately than the payments
also experience delay because as discussed earlier the payment is given to the
contractors or constructors on the basis progress made in the completion of the
project
The researches have shown
that thanks to technology many issues which the project managers faced in the
past are now resolved. With the latest management software various activities
can be done with accuracy and the project managers can deliver the project on
time. The financial management and payment mechanism has also improved thanks
to technology. However, the external environment factors such as economic
factors, legal factors have a significant impact on the project and cause
issues like delay. But such issues can be mitigated with proper strategy and
contingency plans. With such initiatives the delay in payments can also be
controlled up to a lot of extents
The studies have stated
that construction or infrastructure projects get successful only when the
project is delivered on time. If the projects are completed within the
specified budget and with good quality material only then the construction
project is considered to be successful. It has been seen that when the delay in
the construction project occurs not only the cost of the projected increase but
also the overall productivity, efficiency, and usefulness of the project
declines up to a lot of extents. In the worst-case scenario the project might
be abandoned do the financial loss which has to be suffered by the construction
parties
The research studies have
discussed various cost implications that occurs due to delay in the
construction process. These costs increases than have to beard by the citizens
of Australia. In short, it can be said that the increasing costs of the
projects have huge impacts not only on the suppliers, contractors, constructors,
and consultants but also to the general public as well. As discussed earlier
there isthe various reason for cost increases. The cost of the project not only
increases due to delay but also increases due to economic changes and changes
in the market trends
The studies have shown
that the delay in payment and overall delay in construction projects happens
all across the world. It means that this is a global problem and the world has
to take various initiatives to control this problem. According to the results
of various studies, it can be said that the problem regarding a delay in
payments is more common in developing countries rather than developed
countries. In developed countries they have the mechanism and equipment for
managing the project efficiently. The developed countries have skilled labor
which allows the project team to complete the project on time. However, in
developing countries there are limited resources that cause various issues for
completion of the project.
The developing countries
have limited resources which causes hurdles for the project team and
organization. In developing countries, the external environment factors like
economic factors, political factors, legal factors, and social factors also
keep on changing with the passage of time. The instability in the economic and
political environment causes various issues for the project and completion of
the project in such countries becomes quite difficult. The solution to this
problem is that the project manager should create such a plan through which it
can mitigate the impact of external environmental factors
the largest challenge which has been confronted by some of the contractors is the late price which has been made without appropriate management detail and in this regard mission could be behind schedule and has no longer be constructed together with the value which has been anticipated and it will have an effect on the fine at the end of the product and diversely impact the intention of construction industry alteration plan which has been made under the satisfactory of thrust and productivity which is attainable. As well as it could additionally be stated that the work of construction includes a wide amount of money and lots of other contractors also located it quite difficult.
The major reason behind
payment delays includes bad management, quality of work, unethical practices,
and ineffective approaches to project management. If the project manager
focused on these issues than the payment delays can be mitigated up to lots of
extents. it is important for the project head to identify the reasons which are
causing a delay in the project. After the identification of the causes the
project manager should establish the strategy for controlling the delay in the
payment
The studies have stated
that the perspective of contractors and the consultants regarding the delay in
payment is different. According to the contractors the local culture, financial
management of clients, implementation of governance, and delay in getting certification
are some of the major causes of delay in payment. However according to
consultants the major causes of delay in payment include delay in approval,
underpayment of different clients, and poor management. Overall the study has
stated that poor financial management is one of the major causes of delay in
payment. The ineffective project management is also a major cause of delay in
payment. When the project is not managed by the project team accurately than
various issues arise. Sometimes the faults in the construction design occur
that not only increase the cost of the project but also on-time delivery of the
project suffers. When the project is not being managed accurately than the
payments also experience delay because as discussed earlier the payment is
given to the contractors or constructors on the basis progress made in the
completion of the project. It is highly important for the project team to
recruit such employees in the construction project that are not only qualified
but also include the skills through which they can perform the duties
efficiently.
It is concluded in this section that the research is
completely based on the construction industry in Australia. The study is
covering several topics as well as different kinds of research questions along
with different types of construction-related things. In this research study,
all of the important contents of this study are divided as well as subdivided
into the many contents. As the topic of this research is telling that the
research is providing a brief introduction of this study and the knowledge gap
is providing the information related to this study that completely comes from
the literature review. Furthermore, it is not enough academic publications to
explain the function as well as the bimodal structure. In the explanation of
the bimodal structure some important information is provided in this section.
It is expected in the part of literature review that the current field of
knowledge is reviewed by us as well as it is very effective and beneficial in
the determination of the gap which tells briefly that what is missing from the
research as well as what are the unknown things in the research mentioned and
used already. It is very important to identify the gap or missing parts in the
research because it is the only thing that makes the researchers able to
determine the critical aspects of the research. When the researcher will be
able to determine the gaps in the research, current field of knowledge, missing
and the unknown things from the research, they can easily justify the important
aspects as well as important points of the research that will uncover the
information as well as uncover the different aspects of the research.
In this research study, it is briefly reviewed and
analyzed the research questions and the literature review of the research is
providing brief information related and provides the answers to those
questions. It is also concluded that it was necessary to define the research
methodology to conduct the research. So, it was reviewed into the research
methodology that how the research was conducted. To do the research on the
construction industry, the related background studies are also reviewed which
are briefly discussed in the research methodology. In the literature review, it
is explained that the program agreements as well as the construction projects
that have been recognized as in the form of obtaining for the excellent
structured projects related to engineering and the construction at the domestic
level equally brought for the water services, sewerage, rail and the road in
Australia. This thing is telling me that the financial contracts related to the
construction industry are associated with different aspects of the construction
because those things are really very important in the construction project. It
is because, the engineers working on the construction project, must have to
deal with sewerage and other related things because they can make the project
successful. Although, the agreements of the project are the evidence in only
two development projects of the institution that has presented in Australia.
The construction project is mainly examining and evaluating the project
proposals that have been made against the statement value as well as the plan
for the business for ensuring that the express clearly the benefits
strategically which has been provided in the research on the construction
industry. Although, it has also been designed in the projects of public sectors
which is completely based on the central attainment standards and these all
standards are described by the objectives strategically that the government has
presented in the project.
It is also concluded in this research is that many risks
related to the finance of the projects are now developed one of the most
obvious phrases of catch while the relationship between the finance and the
labor was not be manufactured in an effective way. The research is also
providing brief information related to the suggested financial agreements and
its types. It can be helped by such kinds of variations for giving the
protection as well as the lower risk for the owner. It is high described in the
research that the financial agreement among the parties in the construction
industry in Australia has four different types. There are four different types
of construction contracts which are mentioned in this study. The contracts are
the cost-plus contracts, Lump sum or fixed-price contracts, the unit price
contracts as well as time and material contracts.
These are the common
construction contracts that are necessary to start working on the construction
project. They are also explained in this section to get a better understanding
in a very short and effective way. The cost-plus contracts are the contracts in
which many risks and the construction threats are assumed by the owner. From
the activity of the construction, it produces the purchases, costs on the
overall project on the construction site as well as the other expenses and
these contracts are elect the client in the project to pay construction-related
expenses
The contractor in the construction project is taking on
more risk in this condition because there is always a possibility of higher
prices as well as the potential problems. The allowances which are selected
certain costs, are contained by some fixed-price or the lump sum contracts in
order to protect the contractor and to the owner, if it is gone by the
contractor over budget. It can also include the incentives for the contractors
if they complete the construction project before the given time or below the
budget assigned to the contractor and the penalties if the project is finished
by them in case of late completion of the project. The research is also
providing brief information related to the suggested financial agreements and
its types. It is high described in the research that the financial agreement
among the parties in the construction industry in Australia has four different
types. To evade dealing with the change of the orders, it is wanted by the
owner because this type of contract is mostly used in the construction industry
of Australia for the unspecified work
In the unit priced contracts, both of
the parties are focusing on the minor risks into the project. the contractor
determining the particular price for a certain task is involved by the unit
price contracts. For the contractor provision’s price for the number of units,
it must be agreed by the owner thee after this. On the other side, the time and
material contracts are the fourth types of the common construction contract in
which the owners directly involve and they assume a large number of risks in
the project as well as in the contract. Furthermore, the owner of the project
or the land is involved by the time and material contracts for the spent of the
materials and the time on the construction project. Although, the owner of the
project is usually involved as well as the contract agrees on the prices of the
materials and time including extra expenses into the project which could also
come over the project course. Moreover, the maximum clause of prices will
generally be developed or made by the time and material contracts in order to
protect the owner. The time and material type of contracts are mostly used in
the construction industry in Australia at the time of the small or unclear
scope of the project
Some extra contract-related information is also provided
in this document that provides the information that the owner and the
contractor of the project must have to ensure before sign on the agreement that
the contract is protecting both of the interests in the project. A great deal
of the money and the risk is entailed by the construction contracts in
Australia. That’s why the owner of the project needs to ensure that he is
selecting the right type of contract for the construction project. It means
that the signing of the contract can be risky and harmful if the owner signs or
agree with the contract without seeing or observing all areas of the contract
because there is no way back the owner or the contact has signed on the
contact. So, the contractor has to consider and analyze all of the aspects of
the project.
The summary of the literature on the construction is also
telling that Australian construction has always been running on traditional
rules and collective agreements of their employees that have also made them win
many awards for their consistency. Furthermore, the relationships related to
the industry that also achieved them the industrial award and made the industry
auspicious of their principles and tribunals. For the explanation of this
aspect, it also has very strong and biggest reason in the background of all of
the rewards as well as their positive image was also their trade unions and the
employees that keep them with their faithfulness and their loyalty. The
conclusion is also providing the information that the common issue of the
deregulation was also faced by Australia that was related to the labor in the
construction market across the world. On the other side, the new federal laws
for the community of employees were introduced by the conservative government
which controlled the employers and the employees int the construction project
to delay among the labor individuality plus the regulations as well as the
operations of the organization to keep the employees away from the basic
affairs.
Some payment issues are also discussed in this section
which is already explained in the literature review. The study is telling that
the payment issues types related to the payments that are commonly based on the
industry of the construction in Australia. While their responsibilities have
harmed the upstream companies or industries that are related to the payment to
force the low-level players in the industry also, the several types of
conditions are has been accepted by the sub constructor. In the last of the
conclusion study, it is also described the quality of work in the study that
the industry of construction sometime argued for their bad performance on the
quality, cost security and speed mainly. The bad performance of one party must
majorly disturb or disrupt the performance of other upcoming parties. In this research study, it has also been
mentioned that the summary of findings of the research and reveals the
phenomenon of total quality management which has been utilized successfully in
the production of industry. The construction industry is one of the very
important economic locomotives that arouse the economy of any state.
Furthermore, the construction area practices many ethical challenges that are
associated with attitudes that have been based on bid shopping, undependable
servicers, deceitful.
The recommendation section in this research is very
significant that provides some important suggestions that can bring
improvements to the research work as well as it can also make the project of
the construction more effective. There are several types of aspects of the
study on construction projects in the industry of construction in Australia. As
the study is discussing four common types of construction contracts and
provides brief information related to the construction industry. It is
recommended that the flexibility should/must be integrated the flexibility in
their ideas by the company’s infrastructure to introduce some important
modifications in the construction and contract ideas to achieve the goals.
Furthermore, the infrastructure companies or the construction organizations
must have to calculate the methods to achieve the goals over further time and
it should more effectively as the simulations of the programs are covered by
several kinds of goals and objectives. Therefore, the different types of
project areas such as contributing to the performance of the team as well as
distributing the value and the prizes to the employees in the team on their
outstanding performances though the potential recipients
It is also recommended that values and the rewards into
the workplaces must not be for the owners of the projects including the
contractors. These facilities must be provided or assigned them who are working
in the supervision of the contractors because the provision of values and
rewards to employees and labor will increase the level of confidence of every
employee at the workplace. Furthermore, the provision of values and reward is
also essential because it can make it confirm that the cost on the construction
will be below and it also gives surety to complete the project before time as
well as reduces the risks of penalties into the project.
As the research study is also showing several types of
factors specifically for the consideration of this kind of heavy construction
project in Australia as well as the alliances related to the construction but
there are major three factors that are very effective in the construction. It
is recommended that the two heads or brands would have their minds all set for
the risk management as well as they must also have the proper arrangements to
achieve the demands against the risks. After the fulfillment of risky demands,
it needs a better private consortium. Furthermore, the perfect financial market
should also available for every kind of construction project and the
development projects in Austral to buy and sell the projects assumed
Furthermore, it should also be recycled but inappropriately knowing where and how to recycle because the people must have to be aware of some aspects related to products and product quality that they may also place or arrange the right products. So, they must also be used effectively for recycling purpose. The recommendations part in this study is also providing the solution to resolve issues and problems related to the project as well as clash though giving the proper guidelines. It is also recommended that it should resolve matters of payment as well as it must also be penalized the delinquent payers and they must also be learned the geared solutions. It is also recommended in this study that the despite form the poor performance of employees in the workplace should move toward the argumentative relationship and the disagreement between the parties. As the contracts have four types and each type is used in different situations. It is very hard to select the appropriate contract method because there is no way back after signing on the agreement. So, the contractor must have to evaluate and analyze critically all risks effects in the projects and then select the project contract type because the contact type is necessary to make the project successful.
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