Kaka, A P (2001) The case for re-engineering contract payment mechanisms. In: Akintoye, A (ed.) Proceedings of 17th Annual ARCOM Conference, 5-7 September 2001, Salford, UK.
Abstract
In the UK, the normal practice in the construction industry is for the contractor to be paid monthly during the execution of the works. The value of these payments is determined by agreement between the respective Quantity Surveyors of the employer and the Contractor. Advances based on measurement is a system of payment which requires detailed and time consuming management. It does not reward achievement nor does it distinguish between the inefficient and efficient contractor. Of crucial importance, it does not deliver to the customer best value for money. The paper will review current mechanisms available to the construction industry and will demonstrate that these mechanisms fall short of facilitating best practice and ultimately client satisfaction. It will do so by highlighting issues that are affected by cash flow and of key relevance to performance and client satisfaction. It will also examine these issues from a contractor's perspective thus, underlining adverse consequences of moving away from the traditional system. The paper concludes by a call for reengineering the payment mechanism and suggesting the criteria by which new methods can developed.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | cash flow; reengineering; payment mechanism; procurement |
| Index terms: | client satisfaction, best value, best practice, payment mechanism, construction industry, cash flow, quantity surveying |
| Subjects: | industry analysis, financial management, bidding, economic analysis, profession, business, client relations |
| Topics: | Research Practice, Cost Management, Business Strategy, Procurement, Roles and Professions, Stakeholder Management |
| Descriptive scope: | 3 PCT |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here