Addressing Inequitable Payment Practices

More contractors go bankrupt due to cash flow than because of profitability. EC contractors have little leverage to change owner and GC behavior on payment.

Addressing Inequitable Payment Practices explores various perspectives on payment practices, payment clauses, the impact of carrying costs, and recommended strategies to mitigate payment challenges.

Review how inequitable payment practices and clauses are significantly impacting specialty subcontractors’ cash flow cycle including:

  • Limiting company growth as new projects cannot be financed
  • Requiring staff reductions to lower overhead costs in order to avoid losses or reduce the inability to hire additional people
  • Delayed payment to vendors and material suppliers leading to higher materials costs, ultimately impacting future bid competitiveness
  • Reduced profitability caused by the cost of financing working capital requirements
  • Slow-paying jobs, hindering a contractor’s ability to take on additional projects
  • Possible bankruptcy

Learn specific mitigation strategies EC contractors can adopt to help address payment problems.  The report’s appendices serve as useful guidelines on state-specific payment laws and lien rights, talking points for owners and general contractors, and vendor education to help EC contractors understand how the issue impacts their pricing.




Michael McLin


Maxim Consulting

Publication Date:

July 2018

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