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2. ENGINEERING AND TECHNOLOGY
Cash-flow is very important to any construction business and its effective management is a key function of quantity surveyors, particularly those working in the contracting sector. Successful cash-flow management is challenging at the best of times, but takes on a heightened importance in times of economic difficulty. Irish contractors and, in particular, subcontractors are currently experiencing unprecedented financial difficulties in the wake of the banking and property market collapse. In an attempt to alleviate these difficulties and improve cash flow within the Industry, Senator Feargal Quinn introduced The Construction Contracts Bill 2010, (The Bill) in the Seanad. This study investigates whether the proposed legislation will improve payment practice and the ease cash-flow pressures among those engaged in the Industry. The study is primarily literature based and considers the importance of cash-flow to the smooth running of construction contracts. It outlines the right to payment under contract law and describes the various methods by which payment is made. It explains the payment procedures of the most widely used standard form of subcontract in Ireland. The study sets out the provisions of the Construction Contracts Bill 2010 and reports the perceptions of legislators and senior industry representatives to what the Bill may achieve and their attitudes towards its introduction. The study also examines the effectiveness of similar legislation in other jurisdictions.
This review concludes that the Bill is welcome but needs to be modified to address industry concerns and practical operational issues. Overseas experience has shown that while similar legislative initiatives have delivered benefits, a more critical eye might view the results as disappointing. It is one thing to change the law; changing the culture is another thing entirely.
Cunningham, T. (2013). Will The Construction Contracts Bill Improve Subcontractor Cash Flow? doi:10.21427/gygy-8k71