Resolving retention polarity: the perceptions of structural steel fabricators

Abeysekera, Vasantha (2012) Resolving retention polarity: the perceptions of structural steel fabricators. In: World Construction Conference 2012: Global Challenges in Constrcution Industry, 28-30 June 2012, Colombo, Sri Lanka.

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This study aims to understand the perceived polarity between main contractors and subcontractors with a view to resolving problems connected with retentions in an environment where a sliding-retention regime is utilised with a retention rate of 10% for work below NZ $ 200,000. Eight structural steel subcontractors operating in Auckland were interviewed. Contrary to popular belief, subcontractors are not averse to retentions with most taking a middle ground. Nevertheless, the apparently fair practice of using back-to-back contract terms is not seen as fair and reasonable. Most solutions acceptable to subcontractors impact negatively on contractors’ cash flow highlighting the need for some form of reciprocity from subcontractors (price discounts, improved performance, etc.) to induce contractors to offer favourable retention regimes. This highlights the need for a theory on ‘retention reciprocity’ to supplement the five theories on retentions. However, given that not all contractors can be expected to display reciprocity fairness, an interventionist approach may be necessary in order to neutralise any imbalances in power between the contracting parties possibly through amendments to the Construction Contracts Act, and when doing so, there is a need to exercise much caution as the outcome of chaotic systems could be quite unpredictable.

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Item Type: Conference or Workshop Item (Commonwealth Reporting Category E) (Paper)
Refereed: Yes
Item Status: Live Archive
Additional Information: Published version © Ceylon Institute of Builders - Sri Lanka.
Faculty / Department / School: Historic - Faculty of Engineering and Surveying - Department of Agricultural, Civil and Environmental Engineering
Date Deposited: 16 Jul 2012 05:21
Last Modified: 16 Sep 2014 22:45
Uncontrolled Keywords: reciprocity, retentions, construction contracts act
Fields of Research : 12 Built Environment and Design > 1202 Building > 120299 Building not elsewhere classified
12 Built Environment and Design > 1202 Building > 120201 Building Construction Management and Project Planning
Socio-Economic Objective: B Economic Development > 87 Construction > 8799 Other Construction > 879999 Construction not elsewhere classified

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