Financial Liquidity and financial cost factors assessment in construction government contracts.

• DOI: 10.22533/at.ed.47823270611

• Palavras-chave: -

• Keywords: Construction Management, Cash Flow, Financial Liquidity, Financial Cost, Cost and Time Integration, Contractor.

• Abstract:

  The construction industry operates in a highly competitive environment that encourages
  contractors to use low markups on their bids for government construction contracts affecting
  companies' financial liquidity and financial costs. There is common agreement in the literature
  that cash flow, financial liquidity, and accurate estimation of financial costs are crucial elements
  for the construction contractors' survival and their projects' successful completion. Many factors
  affect the financial liquidity and the financial cost of the projects, such as the advance payment,
  collection and payment frequency, delay of payments, the project schedule, the credit agreed with
  the suppliers, credit institutions' interest rates, etc. The authors investigated some of these factors'
  contractual and actual values in Yucatan, Mexico. In addition, they assessed their impact on
  financial liquidity and the financial cost of construction projects derived from government
  contracts. The authors proposed a methodology based on a cost-time integration model; they
  show a step-by-step procedure using specific software and BIM technology to make information
  management more effortless. This procedure was tested on a complex building construction
  project. The results show that assessing the variation in liquidity and financial cost for different
  combinations of factors is feasible and practical and has the potential to improve decision-making
  in project management.