Contractor Failure: Analysis
Publication: Journal of Performance of Constructed Facilities
Volume 5, Issue 3
Abstract
The possibility exists for any construction contractor to fail to filfill the contract requirements associated with a facility. Contractor failure occurs when a contractor is unable to perform his/her contractual duties, thus requiring the facility owner to invoke the contract's nonperformance clause. This paper provides aggregate contractor business failure statistics and outlines potential causes for failure. A framework to identify and quantify the associated costs is also introduced. Several case studies are presented to examine the cause and cost of failure and the means by which the facilities were completed. Alternatives available for project completion when contractor failure occurs are discussed. Recommendations to identify and monitor contractors at high risk for failure are outlined as well. This paper provides facility owners with a greater awareness of the possibility of contractor failure, how to quantify costs of contractor failure, and avoidance techniques.
Get full access to this article
View all available purchase options and get full access to this article.
References
1.
“Anjo's inexperience debated.” (1991). Engrg. News Record, 226(7), 9–10.
2.
“Brown & Root strikes back.” (1982). Engrg. News Record, 209(24), 11.
3.
“Bonding, insurance falling short.” (1988). Engrg. News Record, 220(13), 38–43.
4.
Business failure record. (1951–1987). Dun and Bradstreet Corp., New York, N.Y.
5.
Business statistics. (1988). U.S. Dept. of Commerce, Washington, D.C.
6.
“Changing of the guard remains a problem.” (1990). Engrg. News Record, 224(20), 15–16.
7.
“Contractor giants exiting Florida as market troubles multiply.” (1988). Engrg. News Record, 221(1), 10–11.
8.
“D.C. subway authority terminates contracts.” (1990). Engrg. News Record, 224(20), 15–16.
9.
Farid, F. (1990). “Pricing construction contracts under tax reform act of 1986.” J. Constr. Engrg. and Mgmt., ASCE, 116(2), 300–315.
10.
“Florida bonding case has sureties worried.” (1989). Engrg. News Record, 222(10), 16.
11.
“Florida's Metrorail dismisses contractor.” (1982). Engrg. News Record, 208 (11), 55–56.
12.
“Green construction to fold.” (1989). Engrg. News Record, 222(22), 16.
13.
“Half‐finished job to be rebid.” (1989). Engrg. News Record, 222(8), 14.
14.
Kangari, R. (1988). “Business failure in construction industry.” J. Constr. Engrg. and Mgmt., ASCE, 114(2), 172–190.
15.
“Lift‐slab builder bankrupt.” (1988). Engrg. News Record, 220(14), 17–18.
16.
“MMR files for bankruptcy.” (1990). Engrg. News Record, 224(14), 16.
17.
“Navy ends Kings Bay contract.” (1987). Engrg. News Record, 218(3), 11–12.
18.
Netherton, R. L. (1978). “Licensing and qualification of bidders.” Selected studies in highway law, J. C. Vance, ed., Vol. 3, Nat. Cooperative Highway Res. Program, Transp. Res. Board, Nat. Res. Council, Washington, D.C., 1043–1122.
19.
“Owner, contractor settle.” (1990). Engrg. News Record, 224(25), 28.
20.
“Profitable companies may miss trouble signs.” (1990). Engrg. News Record, 224(27), 10–11.
21.
Quarterly business start, first quarter 1978‐fourth quarter 1986. (1986). Dun and Bradstreet Corp., New York, N.Y.
22.
Russell, J. S. (1988). “A knowledge‐based system approach to the contractor prequalification process,” thesis presented to Purdue University, at West Lafayette, Ind., in partial fulfillment of the requirements for the degree of Doctor of Philosophy.
23.
Russell, J. S. (1990a). “Surety industry: overview.” J. Mgmt. Engrg., 6(3), 323–341.
24.
Russell, J. S. (1990b). “Surety bonding and owner contractor prequalification: comparison.” J. Profl. Issues Engrg., 116(4), 360–374.
25.
Russell, J. S., and Skibniewski, M. J. (1988). “Decision criteria in contractor prequalification.” J. Mgmt. in Engrg., ASCE, 4(2), 148–164.
26.
Schleifer, T. C. (1987). A contractor's survival guide managing with confidence. Asian Press, McLean, Va.
27.
“Surviving in southern style.” (1990). Engrg. News Record, 224(12), 42.
28.
“TVA takes contractor off job.” (1989). Engrg. News Record, 222(25), 16.
Information & Authors
Information
Published In
Journal of Performance of Constructed Facilities
Volume 5 • Issue 3 • August 1991
Pages: 163 - 180
Copyright
Copyright © 1991 ASCE.
History
Published online: Aug 1, 1991
Published in print: Aug 1991
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.