Issues of Late and Non-Payment among Contractors in Malaysia

Chong, Kim Yu (2023) Issues of Late and Non-Payment among Contractors in Malaysia. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

Late and non-payment scenario has seriously plagued the construction industry and affects the contractor’s cash flow, thereby can have a devasting effect down the contractual payment chain. This paper presents findings of studies on the root causes and consequences of late and non-payment issues towards the contractors together with possible solutions in resolving the late and non-payment issues. The study reveals that root cause of late and non-payment issues was largely due to employer’s poor financial management (withholding of payment), poor documentation, poor communication and conflicts among the employer and contractor and disagreement on the valuation of work done. Study also shows that late and non-payment problems could result in suspension of works as well as determination of contractor’s own employment. Study reveals that Negotiation, Mediation, Arbitration, Adjudication and/or Litigation, among others, could be the effective means in addressing issues associated with late and non-payment among the contractors