Construction Projects Funding Sources Essay Example | Topics and Well Written Essays - 1250 words

Construction Projects Funding Sources - Essay Example The researcher states that the American Recovery and Reinvestment Act (ARRA) has outlined special requirements which are to be adhered to in construction projects. All public construction contracts must contain these requirements so as to enable the funding of these construction projects. The applicable state construction contract rules should be adhered to in acquiring contracts for the projects funded under the ARRA. The following are some of the ARRA requirements; all the workers employed by contractors should be paid at rates that are not less than those that other workers doing similar projects in the same locality. The Buy American Act; all the construction materials being used in the construction projects of public property should be manufactured in the country. The construction contract will be terminated if these rules will not be adhered to. ARRA is always strict that these funds should be committed to the projects fully. In contract funding, there is a wide variety of fund ing methods. One of the funding sources is through the use of Cash reserves. This is money that is deposited in the bank accounts of clients. A client can fund a construction project through the use of short-term bank deposits in form of savings or fixed deposits, cash deposited in bank accounts in the form of savings or money that was invested in the money markets and treasury bills. Money market instruments are financial instruments that are given by banks and other financial institutions or from the government. These instruments can vary from treasury bills and certificates of deposit that are thought to be of very low risk. Most of these instruments have low returns, but, at the same time, they are very safe since they are supported by the state and reputable institutions. A client might have invested in the money markets, hence, if the client wants to fund a construction project, then the client will have to sell the treasury bills or certificate of deposits and use the cash ac quired to develop his/ her construction projects.