Odeyinka, H A and Kaka, A (2005) An evaluation of contractors' satisfaction with payment terms influencing construction cash flow. Journal of Financial Management of Property and Construction, 10(3), pp. 171-180. ISSN 1366-4387
Abstract
Construction cash flow models developed in previous researches demonstrated that cash flow profiles vary for differing procurement methods. However, the issue of whether contractors are satisfied or dissatisfied with payment terms impacting cash flows in differing procurement methods is yet to be investigated. This is the concern of this study. The study identified from literature, payment terms potentially thought to impact construction cash flow. Using a 6-point Likert-type scale, a questionnaire survey was administered to UK construction contractors in order to assess their level of satisfaction with identified payment terms influencing construction cash flow. Responses from the survey, which focused on traditional and design and build procurement methods were analysed using mean response analysis and one-way analysis of variance. Results showed that while contractors were satisfied with most of the contractual factors investigated under both procurement systems, they were dissatisfied with two of the factors, namely, time lag between entitlement to receive and actually receiving cash payment and percentage of contract sum retained. This dissatisfaction calls for action to consider devising alternative means of dealing with retention and delay payments.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | cash flow; design and build contract; payment term; traditional procurement |
| Index terms: | survey, cash flow, design and build, construction contractor, questionnaire, traditional procurement, satisfaction, retention, procurement method, variance, procurement system |
| Subjects: | data collection methods, practitioner, contractual arrangements, project delivery, financial management, management, measurement and scaling |
| Topics: | Human Resources, Project Management, Research Practice, Cost Management, Procurement, Roles and Professions |
| Descriptive scope: | 4 PCEA |
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