Updated Model Clauses and dedicated webpage

To assist funding entities and funding recipients to apply the Code for the Tendering and Performance of Building Work 2016 (2016 Code) on applicable building projects the ABCC has revised a number of key resources including:

As a result of these changes, funding recipients are no longer required to comply with some elements of the 2016 Code on indirectly Commonwealth funded building work.

Specifically, funding recipients are strongly encouraged, but no longer required to:

  • obtain ABCC approval for a Workplace Relations Management Plan prior to entering into a contract with a code covered entity;
  • only enter into a contract with a code covered entity that only uses products in building work that comply with the relevant Australian standards and
  • notify the ABCC of certain matters including any expressions of interest or tenders subject to the 2016 Code, when a contract has been awarded and allegations of breaches of the 2016 Code.

These requirements still apply to funding entities. As a matter of best practice, the ABCC strongly encourages funding recipients to also implement these Code requirements.  Doing so will help ensure contractors are best placed to comply with the 2016 Code on the project and will promote best practice safety standards.

Indirectly funded projects - How to determine if a State or Territory project that has Commonwealth funding meets the applicable threshold for the Code to apply

The 2016 Code applies to building work that is indirectly funded by the Commonwealth by a grant or other program in circumstances in which funding for the building work is an explicit component of the grant or program; and for which:

  1. the value of the Commonwealth’s contribution to the project that includes the building work is at least $5,000,000 and represents at least 50% of the total construction project value; or
  2. the Commonwealth’s contribution to the project that includes the building work is at least $10,000,000 (irrespective of its proportion of the total construction project value).

Following feedback from funding recipients about how to apply this test, the ABCC can now clarify the financial threshold test is applied at the project level.  Two examples are set out below.

Example 1:

The Commonwealth enters a $27.5 million funding agreement with a Territory Government for general road infrastructure.

  • This funding is used by the Territory Government to deliver four separate road infrastructure projects with varying Commonwealth contributions and total construction project values as set out in the table below.

 

Project

Commonwealth Funding for Project

Total Construction Project Value

A

$15 million

$40 million

B

$5 million

$9 million

C

$5 million

$11 million

D

$2.5 million

$5 million

 

  • In this example:

    • Project A is an indirectly Commonwealth funded project as the Commonwealth funding for the project is at least $10 million.

    • Project B is an indirectly Commonwealth funded project as the Commonwealth funding for the project is at least $5 million and represents at least 50 percent of the total construction project value.

    • Project C is not an indirectly Commonwealth funded project as while the Commonwealth funding for the project is at least $5 million, the funding does not represent at least 50 percent of the total construction project value.

    • Project D is not an indirectly Commonwealth funded project as the Commonwealth funding for the project is less than $5 million.

Example 2:

  • The Commonwealth enters into a $27.5 million funding agreement with a Territory Government for a particular road infrastructure project.
  • The Territory Government splits the particular road project into four separate packages of works allocating various Commonwealth contributions to each package as set out in the table below.

 

Package

Commonwealth Funding for Package

 

Total Construction Package Value

A

$15 million

$40 million

B

$5 million

$9 million

C

$5 million

$11 million

D

$2.5 million

$5 million

  • In this example, the four packages together constitute the particular road project. As the Commonwealth funding for the project is at least $10 million, it is an indirectly Commonwealth funded project.
  • As the project is indirectly funded, the 2016 Code will apply to all of the packages of works constituting the project. This applies even though the Territory Government has split the project into four separate packages.

For further information please contact the ABCC at 1800 003 338 or email governmentcodeenquiries@abcc.gov.au.

Funding Entities – what has changed?

No changes have been made to the implementation of the 2016 Code as it applies to funding entities.

However when entering funding agreements with funding recipients, funding entities should ensure they use the updated funding agreement clause included here. These clauses reflect the changes referred to above.

A dedicated webpage for funding entities which outlines their responsibilities is available on the ABCC website.

For further information please contact the ABCC at 1800 003 338 or email governmentcodeenquiries@abcc.gov.au.

E-Alert
15 January 2018

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James Martin

Senior Adviser - Media James.Martin@abcc.gov.au 0436 375 478
Media contact

Edda Mwangi

Adviser - Media Edda.Mwangi@abcc.gov.au (03) 8509 3087 0438 321 171