Dorrah, D H (2024) Development of integrated decision support framework for payment management and negotiation in construction projects. PhD thesis, University of Toronto, Canada.
Abstract
Effective cash flow management has become of increasing importance for the success of projects and involved participants given the wide payment-related problems combined with the relatively high financial risks encountered in the construction industry worldwide. The power asymmetry in the conventional top-down payment decision-making process is a key contributor to an imbalanced cash flow management culture with adverse impacts that cascade down the construction chain. Unfortunately, previous studies mostly addressed cash flow and payments from a single participant perspective and did not fully extend the developed approaches to model and support a joint decision-making process, engaging the different participants affecting financial operations. Other jurisdictional efforts include the enactment of prompt payment legislation for the regulation of payment practices which also require investigations of their efficacy and micro/macro impacts.In light of this, this research proposes an adaptive decision support framework for evaluating, managing, and negotiating payments in construction projects while incorporating the individual and collective financial roles of key participants (owner, contractor, and subcontractors). The framework is comprised of three modules. The first module for data acquisition represents the input data for the project under study. The second module focuses on the simulation, analysis, and negotiation of payment and financial arrangements by integrating agent-based simulation, data envelopment analysis, and game theory, respectively. The third module finally sets the basis for informed joint decision-making, providing recommendations for improved performance. The framework modules support a multi-level study of the project performance while capturing the driving force of participants in negotiating mutually rewarding payment arrangements. Furthermore, the research establishes two formulations for the joint decision-making process under single and multiple contractors along with the owner and respective subcontractors. The framework implementation is demonstrated using an illustrative case study project to assess varying conditions of payment cycles, status, advance payments, and interest rates. It is also tested using a real-life complex project to assess its applicability and benefits. Finally, this research can be utilized as a valuable resource for industry practitioners and jurisdictions to collaborate towards enhanced contractual arrangements that alleviate the financial risks encountered in the construction industry, serving the economy at large.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Thesis advisor: | McCabe, B Y |
| Uncontrolled Keywords: | culture; decision support; game theory; cash flow management; decision making; legislation; negotiation; regulation; owner; project performance; case study; simulation; interest rate; payment; subcontractor |
| Index terms: | decision support, cash flow, legislation, game theory, jurisdiction, practitioner, regulation, negotiating, construction project, decision-making, interest rate, subcontractor, agent, cash flow management, case study, owner, decision-making process, investigation, project performance, module, payment legislation, data acquisition, negotiation, complex project, data envelopment analysis, implementation, construction industry |
| Subjects: | financial management, project management theory and practice, sociology, decision analysis, conflict resolution, political science, industry analysis, data collection methods, decision models, data analysis and analytics, architectural elements, production management, practitioner, strategic project management, economic analysis, legal systems, contractual arrangements |
| Topics: | Governance, Stakeholder Management, Roles and Professions, Research Practice, Business Strategy, Cost Management, Design Practice, Procurement, Risk Management, Project Management, Legal Issues |
| Descriptive scope: | 5 PCTEA |
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