For funding entities, the Code sets out several requirements for entering into contracts related to directly Commonwealth funded building work.

We’ve outlined these requirements for you below.

What must I do before entering a contract?

Before entering into a contract for Commonwealth funded building work, a funding entity must ensure that the preferred tenderer provides the following information:

  1. The extent to which domestically sourced and manufactured building materials will be used to undertake the building work.
  2. Whether the building materials to be used for the work comply with relevant Australian standards published by, or on behalf of, Standards Australia.
  3. An assessment of the whole-of-life costs (the total cost) of the project to which the building work relates.
  4. The impact on jobs of the project to which the building work relates.
  5. Whether the project to which the building work relates will contribute to skills growth.

Are there any other contract requirements?

Yes, the Code provides six further requirements to which funding entities must adhere.

  1. A funding entity must not enter into a contract for building work with a code covered entity that does not meet the eligibility requirements set out in section 23 of the Code.

  2. A funding entity must not enter into a contract for building work with a code covered entity that is excluded from performing work funded by a state or territory government—unless approval to do so is provided by the ABC Commissioner.

    If approval can’t be obtained, funding entities must apply exclusion sanctions (howsoever described) to the code covered entity (the contractor, in this case) pursuant to the relevant state or territory policy regarding Commonwealth funded projects.

  3. A funding entity must only enter into a contract for building work with a code covered entity if the funding entity is satisfied that the code covered entity will comply with this code of practice when undertaking the work.

    For example, the code covered entity has a history of compliance, or the funding entity believes it is sufficiently evident that the code covered entity will comply.

  4. A funding entity must not enter into a contract for building work with any code covered entity that:
    1. has had an adverse decision, direction or order made by a court or tribunal for a breach of the Act, a designated building law, work health and safety law or competition and consumer law
    2. has not fully complied, or is not fully complying, with such a decision, direction or order.

It’s important to note that points (4)(a) and (b) above (which summarise subsections 26(1) and (4) of the Code) do not apply if:

    1. the period for payment, or for other compliance with the decision, direction or order, has not expired
    2. the decision, direction or order is stayed or has been revoked.
  1. A funding entity must not enter into a contract with a code covered entity for a project of the type described in Schedule 2 of the Code if the funding entity has not obtained ABCC approval of a WRMP.
  1. A funding entity must only enter into a contract for building work with a code covered entity that will require its subcontractors to:
    1. advise, prior to entering into a contract, whether the subcontractor has in the preceding three year period:
      1. had an adverse decision direction or order made by a court or tribunal for a breach of a designated building law, work health and safety law or the Migration Act 1958

      2. been required to pay any amounts under an adjudication certificate or owed any unsatisfied judgement debts (including by any related entity) to a building contractor or building industry participant
    1. update the advice referred to above every six months for the duration of the contract between the code covered entity and the subcontractor.
  1. A funding entity can only enter into a contract for building work with a code covered entity if the code covered entity uses only products that comply with the relevant Australian standards published by, or on behalf of, Standards Australia.

How can I ensure my responsibilities are met?

To ensure your obligations under the Code are effectively met, we’ve developed Model Clauses for use by funding entities for Commonwealth funded building work .

The Model Clauses contain clauses for funding agreements for indirectly funded Commonwealth building work as well as all clauses for directly funded building work.

The Model Clauses aren’t mandatory, but have been designed to request all information that a funding entity must require from a contractor during procurement of Commonwealth funded building work.

Using the Model Clauses will help ensure that contractors declare compliance to contractual requirements imposed by the funding entity and that funding recipients apply the Code in their tenders and contracts.

This enables the funding entity to set up the appropriate framework to meet their obligations under the Code.

Should I notify the ABCC when I appoint a head contractor?

Yes—funding entities must notify the ABCC when a tender process is completed and a code covered entity has been awarded a contract to undertake Commonwealth funded building work.

The notification must include:

  1. the name and contact details of the code covered entity
  2. a description of the work
  3. the location of the proposed work
  4. the cost of the project
  5. projected start and completion dates.

To notify us of the contract award, you can use the ABCC Contract Notification Form:

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