Administration of Construction Contract Interim Payments Based on Earned-Value Reduction Techniques

Identifying and analyzing effects of interdependencies on construction contractor payment risks

“…This is demonstrated by actions like under-certifications, which indicate manipulation to align work value with pre-contract strategy. This is further illustrated by factors such as initiating projects without adequate funding (Peters et al, 2019) and opportunistic counterclaims against alleged substandard quality (Demachkieh and Abdul-Malak, 2019). This suggests a link between the procuring party's informational advantages and the contractors’ exposure to payment risks.…”

“…The economics of transaction costs frequently conceptualizes interdependence through the lenses of transaction frequency, asset specificity, uncertainty, bounded rationality, and opportunism (On The irreversibility of the inputs incorporated into the end-product because its ownership rights exclude non-owners even if they contributed to its construction (Chang and Ive, 2007b) • Disputes over the value of progress and final account payments (Chang and Ive, 2007a) 5. Substantive uncertainty The inefficacy of payment remedies due to the misinterpretation of ambiguous and incomplete information (Barman and Charoenngam, 2017) • Ineffective payment remedies (Demachkieh and Abdul-Malak, 2019) 6. Hold-up The ability of the owner or his agents to coerce the contactor into dropping its claims for additional payments (Chang and Ive, 2007a) • Unfair termination ( • Shortage of funding due to the unreliability of the projected cash-inflow sources • Inaccurate owner forecasts…”