Notice of RetractionCountermeasures of Payment Risk in Construction Contract
The contractor lacks of identification ability of risks in construction contracts, which result in loopholes and risks that could be avoid in the signing and implementation process of the instruction contract. Due to lack of identification and prevention of these risks, lead to the losses of the contractors in the project construction courses. To the contractor, the significant risk is the owner's payment risks. It is a universal phenomenon there exist plenty of owners in arrears with project payment or repudiate payment, which result not only from insufficient management of contractors, but also closely related to the credit of owners. This paper firstly elaborate contract management of construction project, and then analyze the risk of construction contract and put emphasize on employer payment risk. Finally, point out that employer payment bond is an effective method of risk transferring in preventing employer arrear, to ensure the profitability and construction can be carried through smoothly.
Surety Bonds for Construction Contracts
This book presents the complex field of suretyship for construction contracts by describing and analyzing each element of the surety bonding process in basic terms. Russell unravels the suretyship puzzle through numerous examples and extended case studies drawn from real-world experience. Sample bond forms and surety documents, as well as an extensive glossary of key terms, serve to further illustrate each step of the bonding process.
Predicting Contract Surety Bond Claims Using Contractor Financial Data
This paper describes the results of a study to predict contract bond claims based upon contractor financial data. Financial statements of 87 contractors (36 claim and 51 nonclaim) were obtained from four companies underwriting construction-contract surety bonds. A claim contractor was defined as one that defaulted on a bond, many times requiring the surety to pay a loss. A nonclaim contractor was defined as one that has not defaulted on a surety bond. A predictive model was developed using discrete choice modeling. Variables identified in the model are cost monitoring, underbillings/sales, total current liabilities/sales, retained earnings/sales, and net income before taxes/sales. This model predicts the probability of experiencing a claim in the accounting period following the period in which the financial statement was prepared. Considering each variable, recommendations are presented for reducing the probability of claim. Additionally, questions related to the variables have been developed for consideration by the management of construction companies. The model can assist construction-industry professionals by providing them with a quantitative tool to evaluate contractors.