EXPLORING AND IMPROVING LATE PAYMENT AND UNDERPAYMENT ISSUES IN THE MALAYSIAN CONSTRUCTION INDUSTRY: AN EXPLORATORY STUDY

• Published in: Malaysian Construction Research Journal
• Main Author: Judi S.S.; Mustaffa N.E.
• Format: Article
• Language: English
• Published: Construction Research Institute of Malaysia 2021
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85129727990&partnerID=40&md5=2e907a32fc91f60e4bf81222cf57b2f3

Late payments, underpayments and unnecessary deduction in clients’ construction payments are critical issues in the Malaysian and global construction industry. This exploratory study endeavoured to investigate on the issues faced by Malaysian construction stakeholders regarding late and under payments and subsequently addressing them. Qualitative and interpretative methods have been adopted as part of the ultimate aim of the study in understanding why payment issues have arisen in construction projects. Semi-structured interviews were conducted with respondents selected through purposive sampling comprising of private clients and G7 contractors in the Malaysian construction industry. The findings highlighted pertinent issues related to delay claim payment application issues which amongst others include lack of trust between Client and Contractor, contractors’ lack of knowledge in variation order (VO) document submission, challenges in providing claim documentation, lack of competent staff, insufficient financial resources, and non-participation in joint payment valuations These delayed payments issues may be addressed by providing competent staff, developing trust between parties, using appropriate contracts, enhancing financial management and external benchmarking. The findings shed light on how to manage payment to avoid entrenched conflict leading to payment being made on time. © 2021, Construction Research Institute of Malaysia. All rights reserved.