Further changes to contracts, tendering and security of payments
Did you know that the reinstatement of the ABCC has dramatically changed contractual obligations and tendering requirements for Commonwealth funded projects?
To date, there has been a great deal of attention placed upon the ABCC’s powers to crackdown on union officials, curb coercion and regulate the engagement
of foreign workers. The other issues relating to security of payments, the terms required in construction contracts and affecting contract administration
have largely passed without comment despite being extremely important.
The new Code for the Tendering and Performance of Building Work 2016 (the Code) imposes rigorous new requirements upon ‘code covered entities’. These include
but are not limited to, building contractors, building industry participants and related entities that tender for Commonwealth funded building projects.
Businesses subject to the Code are required to:
- Comply with all security of payment laws and requirements under state or territory based adjudication processes
- Not unreasonably withhold payments and must pay in a timely manner
- Have a documented dispute settlement process in contracts dealing with payments to subcontractors and the resolution of disputes
- Endeavour to resolve all payment disputes in a reasonable, timely and cooperative manner
- Comply with project bank account and trust arrangements that apply to the entity; and
- Report any disputes or delayed progress payments to the ABC Commissioner as soon as reasonably practicable after the date on which the payment falls
- Contracts and subcontracts are compliant for projects which have any component of Commonwealth funding. For example, the inclusion of compliant clauses
for the mandatory dispute resolution process.
- Internal procedures are updated to meet your new obligations. This includes procedures to ensure that the relevant notifications are given to the ABC
Commissioner as and when required.
- Project Managers and other relevant staff understand the obligations imposed under the Code.
- Business complies with other obligations in the Act and Code, such as those relating to your EBA, subcontractor and other employment arrangements.