Taylor said the requests and timeframes given by HNZ were unreasonable.
The contracts normally contained a liquidated damages clause, which is a clause agreeing a certain amount of money will be paid if the contract is breached.
"That's all well and fine to have liquidated damages, if you've got a reasonable timeframe to build the property.
"What we're finding, and what I'm hearing from the members is that it's just unreasonable timeframes and unreasonable requests," Taylor said.
Area Manager for HNZ, Andrew Cairns, said HNZ's procurement activity followed guidelines established by the Ministry of Business, Innovation and Employment.
"If people do have specific concerns about our tender process, we'd be happy to speak with them about it," Cairns said.
He said HNZ's build programme, both in Hawke's Bay and nationally, is increasing in pace and scale to accommodate increasing need.
"This will see HNZ deliver 49 new, warm and dry and homes in Napier and Hastings as part of our regional housing programme, with all the homes expected to be finished by later this year."
Cairns said HNZ works closely with contractors during the process to ensure any issues are managed.
Taylor said the tendering process is an issue nationwide, but it can be exacerbated in areas where there is high growth, like Hawke's Bay.
"Hawke's Bay is pumping," Taylor said.
He said the building boom meant contractors did not have to take on HNZ work.
"It's lowly paid, very high-risk, and why would you take that on when you could take on other work?"
New Zealand has an increasingly high need for social housing.
NZ Government Procurement and Property General Manager John Ivil , says MBIE does not mandate contract liability.
"This is agreed between the agency and the respondents," Ivil said.
"The construction guidelines are just that, 'guidelines'."
There are however rules around sourcing which must be followed by mandated agencies which includes HNZ.
These rules cover the tendering process from the planning stage until the contract is awarded.
"Government is invested in the construction sector's viability into the future, and maintaining good relationships with the businesses they contract with," Ivil said.
Earlier this week Hawke's Bay Today reported on a HNZ unit in Tamatea, which has been left for seven months after being burnt.
This was due to a lack on interest in the original bid to tender.
In March of this year there were 436 people across Napier and Hastings waiting for social housing.
Nationally there were 7890 New Zealanders on the wait list for social housing, up from 6182 in December 2017.