Industry Update

New Building Code 2016 Eligibility Rules and Evidence

What’s changing?

From 1 September 2017 contractors will not be able to express interest in, tender for or be awarded directly Commonwealth funded building work if they or their related entities are covered by a non-compliant enterprise agreement unless one of the exemptions outlined in Schedule 5 applies.

The exemptions in Schedule 5 relate to:

  • enterprise agreements made before 25 April 2014 and not since varied in accordance with section 207 of the Fair Work Act 2009;

  • enterprise agreements made before 2 December 2016, that apply to the contractor, participant or related entity in respect only of building work relating to an expression of interest or tender lodged by the contractor or participant before 2 December 2016; and

  • the awarding, before 29 November 2018, of building work related to an expression of interest lodged by the contractor in the period beginning 2 December 2016 and ending on 16 February 2017 (unless the contractor is also covered by a non-compliant agreement made on or after 2 December 2016).

What does this mean for contractors?

From 1 September 2017 the evidence of eligibility that a contractor must submit when expressing interest in and tendering for Commonwealth funded building work will be simplified.  Respondents must submit Self-Declaration A or C, or an ABCC Letter of Compliance to demonstrate eligibility.  Contractors must provide this evidence in respect of the industrial instrument that will apply to them in relation to the building work the contractor is bidding for.  This has been streamlined from the five types of self-declaration previously available during the transition period.

The updated Proof of Eligibility Table explains the necessary evidence for a contractor to demonstrate compliance, including whether they need a Self-Declaration or an ABCC Letter of Compliance.  This provides contractors and funding entities assurance that Code requirements are being met by both parties.

Contractors must also submit an amended Declaration of Compliance including Attachment A Mandatory Information which requires them to declare that they, and their related entities, are not covered by any non-compliant agreements.  In this Declaration, contractors are now required to list all of the enterprise agreements that cover the contractor and its related entities and reference the evidence that demonstrates the compliance of these agreements.

The updated Model Clauses for Tender and Contract Documentation for Contractors and Subcontractors (Model Clauses Type B) and Model Clauses for Code Covered Entities when engaging Subcontractors on Head Contractor Building Code 2013 projects (Model Clauses Type C) include these new requirements.

What do contractors need to do?

On Commonwealth funded building work only, contractors that are 2016 code covered entities* need to:

  • update their EOI/tender and contract documentation for new projects** to include the revised Model Clauses (or equivalent provisions) for processes commencing from 1 September 2017; and

  • ensure they confirm that valid evidence of eligibility has been submitted by subcontractors responding to EOIs/tenders from 1 September 2017 (updated Declaration of Compliance and Attachment A Mandatory Information, and either a Letter of Compliance or Self-Declaration A or C).

*Contractors are code covered entities (CCE) once they have expressed interest in or tendered for Commonwealth funded building work on or after 2 December 2016.

**After becoming a CCE, the CCE must ensure subcontractors are eligible to tender on new projects.

What if the EOI or tender commenced prior to 1 September 2017 and the contract has not yet been awarded?

Contractors who expressed interest prior to 1 September 2017 and submit a tender from 1 September 2017 for the same project

  • If contractors expressed interest for a project prior to 1 September 2017 utilising Self-Declarations B, D or E they must provide an ABCC Letter of Compliance to demonstrate eligibility to tender after 1 September 2017.

  • Contractors should also complete a new Declaration of Compliance including Attachment A Mandatory Information to confirm they and their related entities are not covered by any non-compliant agreements.

Contractors who tendered prior to 1 September 2017 and are to be awarded the work after 1 September 2017

  • If contractors tendered for a project prior to 1 September 2017 utilising Self-Declarations B, D, or E they must provide a Letter of Compliance to demonstrate eligibility to be awarded the work after 1 September 2017.

  • Contractors should also complete a new Declaration of Compliance including Attachment A Mandatory Information to confirm they and their related entities are not covered by any non-compliant agreements.

For further information, advice and assistance please visit our website www.abcc.gov.au, contact our hotline on 1800 003 338 or send an email to enquiry[at]abcc.gov.au.

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