The Adequacy of Malaysian Security of Payment Legislation for Sub- contractors in Construction Industry

In Malaysia, the particularly small sized subcontractors are definitely benefited from payment provisions in the proposed Construction Industry Payment and Adjudication Act (CIPA Act). However, they need to enhance their knowledge of the so-called the ‘Security of Payment’ Regime to benefits from the Act. Due to this, this on-going research attempts to introduce payment framework to the sub-contractors, in giving the knowledge, to claim for payment. This paper, though, is to disclose the finding of the level of knowledge that the sub-contractors have to the proposed Act, by preliminary analyzing the quantitative questionnaire survey. It was found that the adequacy of security of payment framework to the particularly small sized sub-contractors needs to be produced, and the analysis on effectiveness of the various avenues incorporated in the construction contract or statutes in the other developed countries as well as the proposed Act needs to be done. However, as long as the regime remains in proposal, the sub-contractors have to bear with the current structure of payment mechanisms in the standard forms of contract, which are payment upon certification, direct payment from the employer, and contingent or conditional payment.