PPMP20015: Reviewing Payment Dispute Resolution in Construction

This report provides a comprehensive review of payment disputes in construction projects, addressing the challenges and issues related to effective payment management. It critically assesses the impact of poor payment systems on project success and explores the importance of proactive dispute resolution. The report includes a table of relevant articles, a summary and critical assessment of a key article focusing on the fair value option for payment management, and preliminary research questions for further investigation. Personal reflections on the complexity of construction project execution and the importance of stakeholder management and agile methods are also included. The report concludes by emphasizing the need for empirical analysis to validate payment management methods in practical projects. Desklib offers similar solved assignments and past papers for students.

Running head: Payment Dispute In Construction Project
Payment Dispute In Construction Project
Name of the Student
Name of the University
Author note

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Payment Dispute In Construction Project
Table of Contents
1A...............................................................................................................................................2
Description of the topic:.............................................................................................................2
Table for the four relevant articles:........................................................................................3
Summary of the most relevant article....................................................................................4
Critical assessment of the article:...........................................................................................5
Preliminary research questions:.............................................................................................6
Personal reflection..................................................................................................................6
References:.................................................................................................................................8

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Payment Dispute In Construction Project
1A.
Description of the topic:
The concept of resolving payment related dispute has always found the way in the
field of project development and control. As the construction project, involves a lot
equipment and also it involves a lot of contracts that needs to be signed between the
developer and the several third parties supplying the equipment In order to execute the
project with desired success, project managers always try to create a payment system that is
able to avoid any kind of dispute during the project execution.
Construction Project does not always witness the success in resolving payment
dispute for poor payment management technique. Hence, there has been a constant
requirement for developing a method that ensures success in executing a project. Successful
payment policies is an important issue in the construction project execution field for its
effectiveness in controlling projects. In this context, a review will be prepared for assessing
the effectiveness of the proper payment system and particularly how the issue hampers
project success.

3
Payment Dispute In Construction Project
Table for the four relevant articles:

4
Payment Dispute In Construction Project
Journal Articles
Keywo
rds
Construction projects,
payment dispute, process,
process adaptation
Construction
projects; payment
issues; project
delay
Constructi
on
projects,
payment
issues,
legal
contract
Construction
projects, delay,
payment issue
Citatio
n
Fulford, R. and Standing,
C., 2014.
Construction
industry
productivity and
the potential for
collaborative
practice. Internatio
nal Journal of
Project
Management, 32(2
), pp.315-326.
Ngacho, C., and
Das, D. 2015. A
performance
evaluation
framework of
construction
projects: insights
from
literature. Internat
ional Journal of
Project
Organisation and
Management, 7(2)
, 151-173.
Zhang,
S.B., Fu,
Y.F., Gao,
Y. and
Zheng,
X.D.,
2016.
Influence
of trust
and
contract on
dispute
negotiation
behavioura
l strategy
in
Hughes, W.,
Champion, R.,
and Murdoch,
J.
2015. Construc
tion contracts:
law and
management.
Routledge.

5
Payment Dispute In Construction Project
constructio
n
subcontrac
ting. Journ
al of
Managem
ent in
Engineeri
ng, 32(4),
p.0401600
1.
Retriev
ed
from
Google scholar Google scholar Google
scholar
Google scholar

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Payment Dispute In Construction Project
Summary of the most relevant article:
The authors of the first article has assessed the poor payment design and the impact it
has on the project management, particularly in long term projects. The traditional payment
management approach that tries to resolves the issues at the end of the project had some
faults in terms of project execution and modelling. This outcomes has been tried to improve
in this new method. Traditional construction project execution method as argued by the
authors follows cascading payment planning which is not so effective in long term project
execution. The new method called fair value option according to the article, is particularly a
better choice for executing project in complex and chaotic settings. According to the article
the fair value option is useful for projects that works with contracts which might contain poor
bargain.
According to the article, the success factors of project payment, no matter in which
field is being applied, three parameters needs to be addressed for better project executions.
These factors, according to the article are efficiency, stakeholder satisfaction including the
contractors and the executions of the contracts as a whole. However, the way the three factors
will influence a particular project is inclusive in nature and the effect of these parameters will
be decided by the level of choice in which the project will be executed.
The article has presented a discussion on procedure for making an assessment of the
impact of the fair value option. The authors have suggested for the regression model for this
purpose. According to the authors regression is a perfect choice for this task. The regression
model confirms the effectiveness of the fair value options. The model shows that the process
is particularly helpful in situations where there is a requirement for increasing the interaction
of the process that are closely related with the project. Sometimes during the project
execution phase, the contracts are needs be terminated. This creates issues as the contractors

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Payment Dispute In Construction Project
demand the principle amount that was agreed when the contract was signed.. Hence, there
should be proper method which might be able to avoid dispute and hence fair value option is
an effective approach which will help the contractor to avail the payment if the termination is
not the fault of the contractor.
Critical assessment of the article:
The article has illustrated the issue of payment management in a lucid way and also
developed the need for having a better payment system for resolving the dispute in the
construction project with better project controlling approach. The authors with proper
argument has chosen the fair value option over the others, specially the traditional
approaches. However, one important thing is missing in the discussion of the article. The fair
value option which have been suggested by the authors, is not tested against any empirical
method which might have been made the argument much stronger and provide it a necessary
validations. This very fact might be considered as the shortcomings related to the article.
The authors have only considered the effectiveness of the fair value option and that
too in the theoretical context. The article has not discussed about the large scale implications
of the particular method. In order to understand whether the particular method is really
effective in practical applications or not, there should be a large empirical analysis that
considers several layers that the projects goes through. This analysis will provide the practical
basis for the application of the model.
The fair value method provides effective measures for managing project that delivers
results. But before applying the method one thing should be noted that the model only
considers single item measurements which might not be always reliable. However the
problem can be well managed if some modification is done in the approach. The approach is
to introduce an index that solves the issues with the measurement. However the authors has

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Payment Dispute In Construction Project
not suggested or opted for such methods and that goes into the shortcomings of the otherwise
a very well presented article.
Preliminary research questions:
In the review, we study the following research questions:
 RQ1: What payments challenges need to be addressed for achieving success in
construction project?
 RQ2: What issues are most important for effective payment management for
construction project?
 RQ3: Does the payment related issue really matters for successful projects?
 RQ4: Is it really important to review the factors before dispute arises later in the
projects?
Personal reflection
The topic of construction project execution is very complex in nature and this requires
very professional approach for conducting project at corporate levels (Kerzner, 2018). Only a
professional and experience team is not enough in this regard (Kerzner and Kerzner, 2017).
While doing the research for preparing the paper I have learned that although the topic of
construction project execution is highly complex, but the process is possible to manage if
proper approach is followed. Without having a proper control method in place it is not
possible to drive the project with success. However it is not easy to understand which process
will work best for a given project as the complexity and nature of the project varies
significantly. Hence, it requires an in depth study of the project deliverables to understand the
project in details. However, irrespective of the project topic, three variables are very
important and they are customer satisfaction, stakeholder management, proper negotiations
and the overall performance of the team assigned for the process. All these parameters are

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Payment Dispute In Construction Project
effectively addressed by the agile method. Although the agile method was exclusively
developed for the software industries, over the years the method has become very popular for
its capability to address project related issues very effectively so that the project becomes
successful or the chance of the success becomes high. However, the traditional methods of
designing payment system for construction project execution is not so effective when
compared to the fair value method. The primary reason for traditional methods not being so
successful and required replacement, that these methods follows cascading payment system
which is not very much effective for project that must be executed in chaotic setup. However,
before applying the fair value option in project management, it must be verified through
empirical analysis to develop a stronger concept about the method being applied in practical
projects, especially projects that are deployed in large scale.

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Payment Dispute In Construction Project
References:
Fulford, R. and Standing, C., 2014. Construction industry productivity and the potential
for collaborative practice. International Journal of Project Management, 32(2), pp.315-
326.
Hughes, W., Champion, R., and Murdoch, J. 2015. Construction contracts: law and
management. Routledge.
Kerzner, H. and Kerzner, H.R., 2017. Project management: a systems approach to planning,
scheduling, and controlling. John Wiley & Sons.
Kerzner, H., 2018. Project management best practices: Achieving global excellence. John
Wiley & Sons.
Ngacho, C., and Das, D. 2015. A performance evaluation framework of construction projects:
insights from literature. International Journal of Project Organisation and
Management, 7(2), 151-173.
Zhang, S.B., Fu, Y.F., Gao, Y. and Zheng, X.D., 2016. Influence of trust and contract on
dispute negotiation behavioural strategy in construction subcontracting. Journal of
Management in Engineering, 32(4), p.04016001.