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Abstract

Payment retentions in construction contracts have existed for many years and have increasingly been subject to debate as a result of the negative impacts they can have within the supply chain. Despite industry and government efforts to abolish or amend the way the payment retention system works it still remains a popular method for construction clients to use in managing quality and risks within the construction stage of projects.

This dissertation focuses on an investigation of the different factors that may influence the effectiveness that payment retentions have as a risk management tool on contract performance. This dissertation met the research aims through a comprehensive study of relevant literature and the implementation of primary research. The primary research was carried out through a survey questionnaire of blended quantitative and qualitative questions targeted towards professionals engaged in the construction industry with an understanding or application of payment retention in their professional role.

Several key findings were produced from the research: the survey confirmed payment retentions were an effective tool in positively influencing contract performance for construction clients and also that it aided as a mechanism to uphold quality standards and risk mitigation. Several inefficiencies were highlighted with some suitable alternatives to collaboratively improve the process. Recommendations from government were identified to encourage the industry away from the negative impact retentions have and some organisations have proactively implemented alternative provisions or removing retention clauses in construction contracts completely. The main conclusion from this report were that the current approaches to payment retentions are effective largely because poor quality and latent defects are still a concern to construction clients. This research promotes a decision-making assessment tool as one of its outputs for construction clients that explores the alternative retention solutions available to help mitigate the negative impacts while maintaining a good risk management profile for effective contract performance.

Course: Construction Project Management - MSc - C1659

Date Deposited: 2023-02-13

URI/permalink: https://library.port.ac.uk/dissert/dis14101.html