Factors Contributing to Delay of Interim Payment in Civil Engineering Projects

Abstract

Delay of interim payment remains a chronic problem in the Malaysian construction industry and has relatively increased in number in recent years. Other than causing conflict among the contracting parties, the impacts it brings could shatter the entire delivery chain. Thus, the unfavorable contractual behavior of the client is a matter of great concern that should be addressed by all parties involved to ensure satisfactory project performance. However, research has revealed that the factor causing it is not solely because of the client's faults but also caused by other factors. Therefore, the purpose of this research is to determine the factors that lead to the occurrence of delay of interim payment in government-initiated civil engineering projects in Malaysia. The perceptions of civil engineer consultants and contractors were compared in relation to a list of factors derived from the literature review. The data were collected through an industry-wide questionnaire survey from 288 respondents. This research developed a list of 22 items that might influence the delay of interim payment based on four domains, namely project characteristics, quality of Standard Form of Contract (SFoC), external factors and participants and local attitude. The results found that the occurrence of delay of interim payment in civil engineering project is very high frequency. Correlation analysis performed revealed that the three major factors are positively correlated, namely project scope and design changes, ground uncertainty under the project characteristics domain, and bureaucracy in government agencies under the participants and local attitude domain. These results can help the project participants to better understand the relationship between the groups of factors and the delay of interim payment and encourage them to find solutions or implement mitigating actions to improve the outcomes of civil engineering project.

Keywords

• civil engineering
• construction
• delay
• payment
• standard form of contract