Payment Disputes In Construction Projects: Government Initiatives In Australia (essay).

Choose an initial research topic using a supplied research topic generation tool. Next, you will conduct a literature search to identify relevant scholarly sources. You will provide a summary of the most relevant scholarly article using your own words. You will then critically evaluate the article by identifying patterns, themes, similarities and differences as compared with the other articles you have identified. The evaluation process should lead you to identify a potential gap or an opportunity that may warrant further research. This gap or opportunity can be distilled from any explicit or implicit limitations, recommendation of further research and/or flaws in that article. If you are unable to identify such gap, it is acceptable that, with justification, you opt to replicate the research reported in that article in a different context, country or perspective. As a logical conclusion of this assessment task, you must derive up to two preliminary research questions to address the gap or the opportunity. You must also include a screenshot of Turnitin similarity report showing the similarity percentage. Then, you will provide your personal reflection of your learning experience in this phase. The reflection should record your experiences, feelings and reactions during the entire phase. This may include your commentary on Turnitin similarity percentage and evaluation of the adopted approaches, techniques or tutorial activities that have been helpful or unhelpful. You must also reflect on the consultation process you have had with your lecturer/tutor, peers and Moodle sources.

Specifications:

Your critical review report. The report must substantially include the following components:

A description of the topic using a supplied tool.
A table of four relevant articles (presented in Harvard format) and keywords or combination of keywords used to identify each article.
A summary of the most relevant article to the topic. 
A critical appraisal of the article. 
Preliminary research questions.
A screenshot of the Turnitin similarity report.
Your personal reflection.

The nature of construction projects are hugely fragmented where different parties have different objectives to it. The lack of integration between the processes in the construction industry results in the development disputes in construction projects. Payment dispute in one such factor that affects the overall performance of the projects including project time schedule and budget. Security of payment is a contributor in disputes in majority of the projects and various analysis shows that 50% of the disputes arise due to payment issues (Mitkus&Mitkus 2014,pp.777-786). The functionability of a project depends on the payments as initially the two parties involved in this process are the clients and the contractors have agreed upon a particular amount. However, lack of timely payments results in delay of the project activity which will cause dispute between the involved parties. In the modern day practice, it has been seen that the percentage of the payment is withheld by the principal contractor to its subcontractor depending upon the scenario (Zarei, Sharifi & Chaghouee 2018,pp.29-40). However, this results in the development of complicated situations as it is clear whether it is appropriate to withheld payment or not. Payment dispute is an issue which has not been addressed in majority of cases ad the study will have the following objectives:

• To identify the cause of payment disputes in context to construction projects in Australia
• To critically evaluate the impact of payment disputes to construction projects in Australia
• To recommend suitable strategies to resolve payments disputes to construction projects in Australia

Bailey S. & Chew A., 2013. Collins inquiry into construction insolvency: Part 2 - safeguarding sub-contractor payments. Mondaq Business Briefing, Mondaq Business Briefing, Feb 12, 2013.

Industrial disputes have been considered as one of the risk factors that the global as well as the Australian sectors are facing these days. There are ample of evidences where it can be found that bankruptcy or insolvency in the construction projects has been escalated in a great deal of manner (Smith 2010). Based on this scenario, this article is going to discuss the role of the New South Wales (NSW) construction industry insolvency enquiry. In fact, the purpose of this article is to provide an understanding regarding the disputes of the sub contractor payments and safeguard their interests in this context. As far as the NSW government initiatives are concerned, it can be argued that the authority has installed a NSW building and construction commission with the aim to set up and administer the project trust accounts and ensuring the security of payment legislation for the sub-contractors.

In addition to this, the article also reflects other regulatory measures that the NSW government is following to make the construction business sector more effective and transparent. In this regard, the article mentioned other regulatory frameworks like the Ontario’s Construction Liens Act and the Maryland Construction Trust Fund Statute that are entitled to safeguard the payments down to the lowest tier subcontractors. Furthermore, the article also encompasses the idea of protection mechanism in terms of the set-off rights, security, termination and recovery of damages. The aim of this article is to put emphasis on the role of the contractors to take the payment responsibilities which is not prevalent in most of the regions in Australia. Therefore, entrusting on the government initiatives and existing legislation will be a better way to resolve payment disputes in the construction sectors in Australia. In this context, the Maryland statutory trust scheme and the Ontario construction Liens Act and Project Bank accounts are getting more importance in this article.

Factors behind Payment Disputes

Industrial disputes are considered to be common phenomenon in the context of the business sectors across the world. There are series of problems and issues regarding the business operations that can pose a serious threat to the business operations. Among those issues the disputers in payments or insolvency is identified as one of the major issues that the business organizations are facing with. However, in the context of Australian business sector, this kind of issues can be seen in the construction sectors primarily. As per the report of the Dun & Bradstreet, a great number of small and medium scale companies are failed to retain their market orientation between 2010 and the first quarter of 2011 (Doloi 2012, pp.316–337). The deteriorating trend of the payments is observed as one of the major causes regarding this declination. Subsequently, the role of the banks as a savior in dire situation is not happened in case of the bankruptcy.

However, it can be argued that the article rightly pointed out the crisis scenario of the Australian construction companies and their inabilities to give payments to the sub-contractor. Moreover, the article also addressed the government measures in terms of the legislations and the regulatory framework but there was no mention of the factors behind this insolvency and payment disputes. The government initiatives in order to safeguard the payments of the sub-contractors is identified as an effective tool but without having proper understanding of the factors behind the emergence of payment disputes the remedies may fail to deliver an effective result. Therefore, it is very important to highlight the factors responsible to create payment disputes in the construction sector in Australia and after figuring out the causes it will be beneficial to plan accordingly.

• What are the causes of payment disputes in context to construction projects in Australia?
• What is the impact of payment disputes to construction projects in Australia?

This project has been challenging and provided a great learning experience. I have learned about the different types of project disputes especially in the construction industry in Australia. I had no idea that payment dispute is one of the major disputes in projects and the remaining disputes arise due to this factor.  I gained knowledge about the origin of disputes and working through different peer reviewed journals to identify the most effective ways of settling the disputes. I have knowledge regarding the process of conducting critical analysis as it was difficult for me to collect appropriate data. There are limited resources in this topic as the gap arises due to the fact that majority of the literatures have addressed all the disputes as a whole. However, none of the literature have solely focused on the payment disputes and the study will identify this gap. I have developed research objectives based on my understanding of the project and have developed research questions based on it.

I have developed the annotated bibliography based on the topic and the most relevant articles discusses the payment disputes and insolvency. The article has provided different acts and measures that has been executed to reduce the disputes. However, there has been significant in specifying the different factors of payment disputes which make the solutions quite superficial. This is the reason I want to conduct the research with this topic so that I can focus on the factors of payment disputes and how it impacts the performance of the organization. In this research, I will focus on the precautionary measures that will have to be taken to reduce the chances of disputes between two parties. However, relevancy and significant data is less in this topic and it took considerable amount of time to collect data.

References

Bailey S. & Chew A., 2013. Collins inquiry into construction insolvency: Part 2 - safeguarding sub-contractor payments. Mondaq Business Briefing, pp.Mondaq Business Briefing, Feb 12, 2013.

Doloi, H., 2012. Understanding Impacts Of Time And Cost Related Construction Risks On Operational Performance Of Ppp Projects. International Journal of Strategic Property Management, 16(3), pp.316–337.

Mitkus, S. &Mitkus, T., 2014. Causes of conflicts in a construction industry: A communicational approach. Procedia-Social and Behavioral Sciences, 110, pp.777-786.

SME failures balanced by start-ups: the Australian economy is in good shape, as an increase in the level of insolvencies reported this year has been balanced by a corresponding boost in the number of small businesses being launched. (2016). Australian Banking & Finance, [online] 3(5), p.11. Available at: https://go.galegroup.com.ezproxy.cqu.edu.au/ps/i.do?id=GALE%7CA261631351&v=2.1&u=cqu&it=r&p=AONE&sw=w [Accessed 6 Aug. 2018].

Smith, C., 2010. Internationalising industrial disputes: the case of the Maritime Union of Australia. Employee Relations, 32(6), pp.557–573.

Zarei, B., Sharifi, H. &Chaghouee, Y., 2018. Delay causes analysis in complex construction projects: a Semantic Network Analysis approach. Production Planning & Control, 29(1), pp.29-40.