Building Code 2013 Supporting Guidelines for Commonwealth Funding Entities

Building Code 2013 Supporting Guidelines for Commonwealth Funding Entities 1 February 2013 Supporting Guidelines for Commonwealth Funding Entities, issued 1 February 2013 With the exception of the Commonwealth Coat of Arms and where otherwise noted all material presented in this document is provided under a Creative Commons Attribution 3.0 Australia (http://creativecommons.org/licenses/by/3.0/au/) licence. The details of the relevant licence conditions are available on the Creative Commons website (accessible using the links provided) as is the full legal code for the CC BY 3.0 AU licence (http://creativecommons.org/licenses/by/3.0/au/legalcode). The document must be attributed as the Supporting Guidelines for Commonwealth Funding Entities. 978-0-642-78732-3 The Australian Government, its employees, officers and agents do not accept any liability for the results of any action taken in reliance upon, based on or in connection with this document. To the extent legally possible, the Australian Government, its employees, officers and agents, disclaim all liability arising by reason of any breach of any duty in tort (including negligence and negligent misstatement) or as a result of any errors and omissions contained in this document.

Contents Section 1...1 Introduction...1 Section 2...1 Application...1 Section 3...2 Scope...2 Section 4...2 4.1 Tender Documentation...2 4.2 Tender Evaluation Criteria...3 4.3 Project Agreements...4 4.4 Contract documents and project management procedures...4 4.5 Minor works and very small contracts...5 4.6 Consultant contracts...5 4.7 Funding agreements...6 Section 5...6 5.1 Responsibilities of Funding Entities...6 5.2 Responsibilities of grant and funding recipients...7 Section 6...8 6.1 Workplace reform...8 6.2 Work health safety and rehabilitation (WHS&R)...9 Section 7...9 7.1 Department of Employment (Employment)...9 7.2 Fair Work Building Industry Inspectorate (operating as Fair Work Building and Construction (FWBC))...9 7.3 Code Monitoring Group (CMG)... 10 7.4 Department of Finance and Deregulation (Finance)... 10 Section 8... 10 8.1 Code Monitoring Group (CMG)... 10 8.2 Sanctions... 11 8.3 Complaints concerning Funding Entity breaches... 12 8.4 Appeals and complaints concerning sanctions applied... 13 Section 9... 15 Contact Details... 15 Abbreviations and Defined Terms... 16 Section 10... 17 Model Tender and Contract Documentation... 17

Section 1 Introduction 1.1 The Building Code 2013 (Building Code) commenced on 1 February 2013. The Building Code was issued under subsection 27(1) of the Fair Work (Building Industry) Act 2012 which provides that the Minister may issue a code of practice that is to be complied with by building contractors and building industry participants in respect of building work. The Building Code was developed to: a) promote fair, cooperative and productive workplace relations in the building and construction industry; and b) assist industry stakeholders to understand the Australian Government s expectations and requirements in relation to entities that tender for Commonwealth funded construction related work, are awarded Commonwealth funded construction related work, or both; and c) promote workplace reform. 1.2 These Supporting Guidelines have been developed to assist Funding Entities to understand how the Building Code affects them and their Commonwealth procurement obligations. These obligations flow from the Financial Management and Accountability Act 1997, which requires the proper use of Commonwealth resources. Funding Entities has the same meaning as defined in Section 4 of the Building Code. 1.3 Together the Building Code and these Supporting Guidelines are intended to use the Australian Government s purchasing power to promote best practice and ensure compliance with all legal obligations imposed on building contractors and building industry participants. 1.4 These Supporting Guidelines also: assist Funding Entities interpret and implement aspects of the Building Code in relation to construction projects; detail the processes to monitor and report on the Building Code; and detail the processes that will be used to determine whether a sanction should be imposed on a party for a breach of the Building Code. Section 2 Application 2.1 These Supporting Guidelines apply to any building work that is subject to the Building Code. 1

Section 3 Scope 3.1 Funding Entities are required to ensure compliance by building contractors and building industry participants with the Building Code, when: a) negotiating pre-commitment lease arrangements with a private sector developer; or b) initiating Build, Own, Operate, Transfer (BOOT) and Build, Own, Operate (BOO) projects for the performance of Commonwealth functions or the delivery of Commonwealth services; or c) negotiating building work that is part of a Public Private Partnership (PPP) or a Private Finance Initiatives (PFI) for the performance of Commonwealth functions or the delivery of Commonwealth services. 3.2 For many BOOT and BOO projects, a Funding Entity will be the subsequent tenant of the project and can make the Building Code, or a requirement to act in a manner that is consistent with the Building Code, as a condition of the agreement to lease. 3.3 PPPs and PFIs involve the creation of an asset through financing and ownership control by a private party and private sector delivery of related services that may normally have been provided by the Commonwealth. A Funding Entity may contribute to establishing the infrastructure, for example through land, capital works or risk sharing. The service delivered may be paid for by the Commonwealth or directly by the end user. Section 4 Tender and Funding Arrangement Requirements 4.1 Tender Documentation 4.1.1 All parties invited to express interest in Australian Government building and construction projects or projects to which the Australian Government contributes funding must be informed of the application of the Building Code to the project. 4.1.2 Advertisements calling for expressions of interest, requests for tenders, submissions, invitations to join Common Use Arrangements etcetera, must incorporate the following statement: The Building Code 2013, applies to this project. This document is available at www.employment.gov.au/buildingc ode 2

4.1.3 Compliance with the Building Code must be made a condition of tender for Australian Government funded construction work. Funding Entities must ensure the requirements of the Building Code are met. 4.1.4 Where a two-stage tender process is used, the first stage or expression of interest documents issued should clearly state that the Building Code applies. 4.1.5 Additionally, tenderers are to be advised that they must comply with the Building Code on all of their new privately funded Australian-based construction activities. 4.1.6 Prospective tenderers must also be advised that compliance with the Building Code is to extend to all subcontractors and consultants who may be engaged by the tenderer on the project. 4.2 Tender Evaluation Criteria 4.2.1 The Building Code is to be applied to the maximum practicable extent to all building and construction work undertaken for and on behalf of the Australian Government, and to building and construction projects to which the Australian Government has contributed funding, in a manner consistent with the Commonwealth Procurement Rules (CPRs) and the Fair Work Principles. 4.2.2 Consistent with the CPRs and the Fair Work Principles, Funding Entities must not enter into contracts with tenderers who have had an adverse Court, Commission, or Tribunal decision (not including decisions under appeal) for a breach of workplace relations law, work health and safety law, or workers compensation law and the tenderer has not fully complied, or is not fully complying, with the order. 4.2.3 Funding Entities are required to assess the previous performance of the tenderer on applying the Building Code to projects funded by the Australian Government. This will include confirming whether the tenderer has had any adverse court, tribunal, or Fair Work Australia Commission, order, or penalty awarded against it in the last two years. 3

4.2.4 While acknowledging that value for money is the core principle underpinning decisions on government procurement, preference may be given in projects funded by the Australian Government to tenderers that have a demonstrated commitment to: a) adding and/or retaining trainees and apprentices; b) increasing the participation of women in all aspects of the industry; or c) promoting employment and training opportunities for Indigenous Australians in regions where significant indigenous populations exist. 4.2.5 Funding Entities have the capacity to waive elements of the Supporting Guidelines in limited circumstances based on a strict public interest test. The public interest test includes: the project is urgently required because of an emergency (e.g. natural disasters or issues of public safety); or where no suitable compliant tenderer is identified at the completion of a competitive tender process, in which case, a new approach to the market must commence to comply with the CPRs. 4.2.6 The scope of any Supporting Guidelines requirements which are not to be applied must be determined and documented for each project. 4.2.7 The following conditions may not be waived under any circumstances: project monitoring and reporting requirements; and acceptance of the sanctions regime. 4.3 Project Agreements 4.3.1 The Building Code is based on the primacy of enterprise-level determination of pay and conditions. Nevertheless, there may be some situations where project agreements may be appropriate. Any project agreement must be made and approved under the FW Act or in accordance with applicable State industrial law. 4.4 Contract documents and project management procedures 4.4.1 While the form of wording will vary according to the contract form and the type of service supplied, the contract must incorporate the requirement for the contractor to comply with all aspects of the Building Code, and for building contractors and building industry participants associated with the project to comply. 4

4.4.2 The relevant contractual documents must allow Inspectors to access sites, documents and personnel to monitor compliance with the Building Code. Model contract clauses are at Attachment A. 4.5 Minor works and very small contracts 4.5.1 Funding Entities are required to ensure that the Building Code is applied to minor works contracts. Funding Entities are encouraged to use the model contract clauses available at Attachment A for tenders and contracts relating to minor works. 4.5.2 Funding Entities may determine whether the model contract clauses are appropriate for minor works projects based on the value and complexity of projects and their own operational requirements. 4.5.3 In relation to very small contracts (where the value of the contract is $25 000 or less), Funding Entities may consider including the following clause in tender or contractual documentation rather than the model contract clauses: The Building Code 2013 applies to this project. By agreeing to undertake the works, you will be taken to have read and to agree to comply with the Building Code. 4.5.4 Contractors, subcontractors and consultants raising purchase orders or minor contracts of $25 000 or less must ensure the above clause is included within purchase orders. 4.5.5 In circumstances where minor works or very small contracts are undertaken without tendering, building contractors performing the minor works or very small contract must commit to the requirement to comply with the Building Code. They should also be advised that the Building Code is available at www.employment.gov.au/buildingc ode. 4.6 Consultant contracts 4.6.1 The model contract clauses are also appropriate for consultant contracts for construction related activities. These include contract management contracts, project management contracts, and design and supervision contracts. Funding Entities should incorporate the model clause, or a clause based on the model, in all consultant tenders and contract documents and ensure that advertisements calling for expressions of interest from consultants include the statement: The Building Code 2013 applies to this project. 5

4.7 Funding agreements 4.7.1 Funding Entities acting as funding administrators (i.e. in relation to indirectly funded projects) must ensure that funding recipients include the requirement to apply the Building Code and these Supporting Guidelines to their projects in their deeds of agreement, grant documents or other documentation. 4.7.3 Funding Entities responsible for managing the transfer of funds or grants should ensure that any guidelines or administrative procedures governing funding require funding recipients to include these clauses, in all contracts relating to the construction projects concerned. Section 5 4.7.2 Model clauses for inclusion in deeds of agreement, grant documents and other legal instruments are also included at Attachment A. These model clauses can be used by Funding Entities for projects where the Building Code and these Supporting Guidelines apply, when effecting the transfer of funds from the Australian Government to State/Territory and local Governments and private sector organisations. Advice should be sought from Employment where significant modifications to these model clauses are proposed for particular projects. Building Code Responsibilities 5.1 Responsibilities of Funding Entities 5.1.1 The Funding Entity is responsible for ensuring that: the application of the Building Code is included as an integral component of construction project and contract management procedures within their organisations; all expressions of interest, tender and contractual documents clearly set out the requirements specified in these Supporting Guidelines; must not enter into contracts with tenderers who: o have had an adverse Court or Tribunal decision (not including decisions under appeal) for a breach of workplace relations law, work health and safety law, workers compensation law, 6

migration law or competition and consumer law and the tenderer has not fully complied, or is not fully complying, with the order ; or o are on the exclusion list as determined by the Code Monitoring Group (CMG). sanctions applied under these Supporting Guidelines are enforced, including the exclusion of identified parties from work opportunities in accordance with the CMG and Ministerial decisions; CMG Secretariat is notified of all allegations of breaches of the Building Code within 21 days of the Funding Entity becoming aware of the alleged breach; they respond to requests for information concerning Building Code-related matters made on behalf of CMG; and issues which may arise in relation to a project are responded to, with initial actions designed to encourage the voluntary modification or cessation of noncompliant behaviour. A Funding Entity may write to a party to request clarification of behaviour which is considered a Building Code breach, or request that the behaviour cease or be modified. In some cases Funding Entities may wish to advise relevant parties that the matter has been referred to The CMG Secretariat for further action. Funding Entities as funding administrator (i.e. indirect funding) 5.1.2 In situations where Funding Entities are not the client, but are responsible for administering Australian Government programme expenditure involving construction, the Funding Entity is responsible for ensuring the grantee or recipient of the Australian Government funding applies the Building Code to all projects funded with Australian Government funds. 5.2 Responsibilities of grant and funding recipients 5.2.1 Recipients of grants or funds from Funding Entities have a responsibility to ensure projects involving Australian Government programme expenditure are bound by the Building Code and these Supporting Guidelines. 5.2.2 Grant and funding recipients, including State and Territory agencies, must ensure that: they provide a commitment to the Funding Entity that the Building Code and these Supporting Guidelines will be complied with and that contractual obligations will be met as specified in section 4 of these Supporting Guidelines; all expression of interest, tender and contractual documents clearly set out the Building Code requirements; 7

they do not consider expressions of interest or tenders or provide work to building contractors and building industry participants on the exclusion list due to breaches of the Building Code (this information is available from the CMG Secretariat); they cooperate with and respond to requests for information concerning Building Code-related matters made on behalf of the Funding Entity, CMG and/or an Inspector; building contractors or building industry participants initiate voluntary remedial action aimed at rectifying non-compliant behaviour when it is drawn to their attention and notify CMG Secretariat of non-compliance and any remedial action taken; all parties involved in the project are aware of the requirement to report any alleged breaches or other Building Code-related matters to the CMG Secretariat within 21 days of the funding recipient becoming aware of the alleged breach; and sanctions applied under these Supporting Guidelines are enforced including the exclusion of identified parties from work opportunities in accordance with CMG decisions. Section 6 6.1.1 The FW Act creates a national workplace relations system that is fair, flexible and promotes productivity and economic growth. The FW Act also provides a framework with the flexibility to achieve a range of outcomes by promoting enterprise agreements that are tailored to suit the needs of businesses and employees. 6.1.2 Under the FW Act all parties are expected to demonstrate good faith when bargaining. 6.1.3 Workplace reform under the FW Act has the potential to strengthen the building and construction industry s viability through workplace and productivity improvements. Such improvements can foster positive changes for individual workplaces including: lower production costs; reduced waste and time lost; better quality products and services; a more flexible and adaptive workforce; improved motivation, morale and commitment; higher standards in WHS&R performance; and improved remuneration and working conditions for the workforce. Workplace Relations 6.1 Workplace reform 8

6.2 Work health safety and rehabilitation (WHS&R) 6.2.1 Improving the industry s WHS&R performance requires positive measures that aim for prevention rather than correcting things when they go wrong. This initiative is directed at making WHS&R management an integral part of the organisational culture of companies and enterprises. 6.2.2 The Australian Government is committed to being both a model client and to influence the WHS&R outcomes for the industry. The Australian Government implemented the Australian Government Building and Construction OHS Accreditation Scheme (the Scheme) administered by the Federal Safety Commissioner (FSC) in accordance with the Fair Work (Building Industry) Act 2012 (FWBI Act). The Scheme is separate to the Building Code or these Supporting Guidelines. 6.2.3 Further information about the Scheme is available at www.fsc.gov.au. Section 7 Australian Government administration of the Building Code 7.1 Department of Employment (Employment) 7.1.1 Employment has responsibility for the following activities related to the Building Code and these Supporting Guidelines: overall policy responsibility; providing policy advice to the Australian Government through the Minister for Employment; promoting Funding Entities awareness through a broad range of educational activities; and providing a secretariat to the CMG. 7.2 Fair Work Building Industry Inspectorate (operating as Fair Work Building and Construction (FWBC)) 7.2.1 FWBC has primary responsibility for monitoring building contractor and building industry participant compliance with the Building Code. This includes: monitoring all parties compliance with all applicable legislation, court and tribunal orders, directions and decisions and industrial instruments; promoting industry stakeholder awareness through a broad range 9

of educational activities, including holding seminars, producing fact sheets, etc; conducting on-site visits to promote awareness; conducting on-site audits to ensure compliance; conducting on-site investigations of alleged breaches of the Building Code; conducting investigations seeking the views of all parties who may be able to provide information relevant to the alleged behaviour; and referring matters outside of their jurisdiction to appropriate authorities and monitoring progress. 7.2.2 The FWBC will report on the results of these activities to CMG. Further information about the FWBC is available at www.fwbc.gov.au. 7.3 Code Monitoring Group (CMG) 7.3.1 CMG has responsibility for the following activities related to the Building Code: be applied under the Building Code and making recommendations to Ministers on preclusion sanctions for breaches of the Building Code. 7.3.2 CMG consists of a Senior Executive Service representative from each of the Department of Finance and Deregulation, the Department of Employment, the OFSC, the Department of Prime Minister and Cabinet, the Department of Defence and the Department of Infrastructure and Transport. The FWBC and the Office of the Fair Work Ombudsman will be nonvoting members of the CMG. 7.3.3 The CMG is supported by a secretariat drawn from Employment. 7.4 Department of Finance and Deregulation (Finance) 7.4.1 Finance is responsible for Australian Government procurement policy, including the CPRs. Section 8 setting the strategic direction for Building Code education and compliance activities of the FWBC; reviewing reports of alleged breaches of the Building Code which have come to its attention either independently or by referral from the FWBC; and deciding on possible sanctions to Compliance and monitoring provisions for the Building Code 8.1 Code Monitoring Group (CMG) 10

8.1.1 The CMG is advised of alleged breaches of the Building Code, these Supporting Guidelines and the CPR by voluntary reporting from Funding Entities or companies, and through audits and investigations by the FWBC. 8.1.2 Once the Director of FWBC becomes aware of a suspected breach, a course of action appropriate to the situation will be taken. This includes: an investigation by the FWBC if the alleged breach is related to workplace relations aspects of the Building Code; and for breaches of State and Territory legislation including WHS&R and security of payments legislation, referral of the matter to the relevant State/Territory regulatory authority. 8.1.3 CMG will be guided by administrative law principles including the right of parties to be aware of allegations of breaches of the Building Code and to be given the right to respond to such allegations. 8.2 Sanctions 8.2.1 Sanctions will be considered where a party has failed to meet their obligations under the Building Code, and the breach is not voluntarily rectified to the satisfaction of the CMG. Sanctions will be considered for all construction work covered by the Building Code. 8.2.2 A sanction can also be applied to a division of a business operating in a particular state or territory, or to a business as a whole when it operates as a single entity. The CMG will consider the application of such sanctions on a case by case basis. 8.2.3 The CMG will deal on a case by case basis with situations where a business that has incurred a sanction, or is subject to an allegation of a Building Code breach: is taken over by another business; or reconstitutes itself as another legal entity. 8.1.4 Where an alleged breach is sustained the Funding Entity or funding recipient will be responsible for seeking voluntary rectification of a breach, and advice on what remedial action has been taken. 11

8.2.4 If a party is sanctioned, the CMG may also consider, on a case by case basis, applying sanctions to closely related parties. In determining whether the parties are closely related, the CMG may refer to the definition of related body corporate in s.9 of the Corporations Act 2001 (Cth) and any legal principles considered relevant. 8.2.5 A formal warning may be issued if a breach occurs. In such cases the warning will indicate that future breaches may lead to sanctions such as preclusion from tendering for Government construction work. 8.2.6 If a first breach is of a serious nature, such as a breach of applicable legislation, a more serious sanction may be considered, such as preclusion from tendering. 8.2.7 Breaches will be reported to relevant ministers and may recommend that a party be precluded from tendering for a period of up to six months. The period of preclusion may be extended a further six months for each breach thereafter. 8.2.9 The Minister for Employment will consult with the Minister for Finance and Deregulation and the Funding Entity s minister before requiring that a significant sanction be imposed. 8.2.10 Once a decision is made regarding a breach the CMG will set out their decision and reasons in writing. If a sanction is to be applied, the party will be advised of its right of review. 8.2.11 The Select Council on Workplace Relations will also be advised of the imposition of a sanction. This advice will identify the party concerned, the nature of the breach and sanction. The advice will be communicated to all Australian Government agencies to ensure a whole of-government approach. An appropriate industry association may also be notified. 8.2.12 Details of the process for considering imposing a sanction are available at www.employment.gov.au/building Code 8.3 Complaints concerning Funding Entity breaches 8.2.8 Alleged breaches may be reported to an appropriate statutory body or law enforcement agency. 12

8.3.1 The Building Code and these Supporting Guidelines impose obligations on all parties. A Funding Entity or its representatives may breach, or be alleged to have breached, these Supporting Guidelines. In such circumstances the complaint may be dealt with by the relevant Funding Entity and Employment. However, this does not prevent complaints from being lodged directly with CMG or the FWBC. 8.3.4 It is possible that a funding recipient that is a State or Territory agency may breach these Supporting Guidelines. Where a State or Territory agency breaches these Supporting Guidelines the Funding Entity will raise the issue with the funding recipient. The Funding Entity will seek to have the funding recipient rectify the breach and obtain an assurance the funding recipient will comply with these Supporting Guidelines. 8.3.2 Where it has been established that a Funding Entity has breached these Supporting Guidelines, CMG will bring the breach to the attention of the relevant portfolio minister and the Minister for Finance and Deregulation. 8.3.3 If the breach has been committed by a party contracted to represent the Funding Entity, consideration may also be given to imposing sanctions on that party such as reduced business opportunities or exclusion from further work for a specified period. 8.3.5 Following consultation with Employment, the Funding Entity may refer the matter to its portfolio minister. The portfolio minister may write to the relevant State or Territory minister. 8.3.6 Continued non-compliance by a State or Territory agency may require broader consideration of an appropriate response by the Australian Government. 8.4 Appeals and complaints concerning sanctions applied 8.4.1 Parties who are subject to a sanction will have been afforded several opportunities to correct any misconceptions and/or address allegations including: the right to respond to allegations during the initial investigation; if necessary they will be asked by the CMG to show cause why the 13

CMG should not apply, or recommend, a sanction; and 14 days notice from the CMG of the intention to apply or recommend a sanction. 8.4.2 Existing avenues for the review of administrative decisions can be used to process complaints arising from the Supporting Guidelines. Access to the Administrative Appeals Tribunal or to a review under the Administrative Decisions (Judicial Review) Act 1977 are not available. 8.4.3 However, judicial review of executive decisions (including those of CMG or the Minister) may be available under s.75 (v) of the Constitution or s.39b of the Judiciary Act 1903. 8.4.4 Alternatively, parties may make a complaint to the Commonwealth Ombudsman, or seek internal review by the Secretary of Employment, who may review a CMG decision. 14

Section 9 Contact Details The contact for Fair Work Building and Construction is: Phone: 1800 003 338 Web address: www.fwbc.gov.au General queries about workplace relations matters can be directed to: the Building Code Hotline: 1300 731 293 the Building Code Mailbox: building@deewr.gov.au The contact for the Federal Safety Commissioner is: Assist-line: 1800 652 500 Fax: (02) 6121 9270 Web address: www.fsc.gov.au 15

Abbreviations and Defined Terms BOO Build, Own, Operate BOOT Build, Own, Operate, Transfer Building Code the Building Code 2013. Available at www.employment.gov.au/buildingcode CAC Act Commonwealth Authorities and Companies Act 1997 CMG Code Monitoring Group CPRs Commonwealth Procurement Rules Employment Department of Employment Finance Department of Finance and Deregulation FMA Act Financial Management and Accountability Act 1997 FSC Federal Safety Commissioner Funding Entity As defined in Section 4 of the Building Code FW Act Fair Work Act 2009 FWBC Fair Work Building and Construction FWBI Act Fair Work (Building Industry) Act 2013 FWBII Fair Work Building Industry Inspectorate Inspector a person appointed as a Fair Work Building Industry Inspector or Fair Work Inspector as defined under the FWBI Act and FW Act respectively OFSC Office of the Federal Safety Commissioner PFIs Private Finance Initiatives PPPs Public Private Partnerships Supporting Guidelines Supporting Guidelines for Commonwealth Funding Entities WHS&R Work (or Occupational) health, safety and rehabilitation 16

Section 10 Model Tender and Contract Documentation February 2013 Building Code 2013 (Building Code) and the Supporting Guidelines for Commonwealth Funding Entities (Supporting Guidelines) 17

Contents Introduction... 1 Funding agreement clauses... 2 Minor works and very small contracts ($25,000 or less)... 5 Advertisement clause: work valued over $25,000... 6 Conditions for participation clause: work valued over $25,000... 7 Tender clauses: work valued over $25,000... 8 Declaration of Compliance... 10 Contract clauses: agreements with contractors... 14 How to use this document: Enclosed in these grey boxes are instructions on the application of the model clauses. These are suggestions which may be added to documentation as they appear, or modified according to your requirements. This document should be read in conjunction with the Building Code 2013 (the Building Code) The Building Code can be downloaded from: www.employment.gov.au/buildingcode 18

Introduction This document is designed to provide guidance to Funding Entities in regard to the application of the Building Code 2013 (Building Code). All parties invited to express interest in, or tender for, Australian Government building and construction projects or projects to which the Australian Government contributes funding must be informed of the application of the Building Code to the project. For Funding Entities It is the responsibility of each Funding Entity to consider and document the extent to which compliance with the Building Code is required on a project by project basis. Funding Entities are responsible for ensuring all expressions of interest, tender and contractual documentation clearly set out the requirements of the Building Code, and include the relevant model clauses where applicable. 1

Funding agreement clauses The Building Code applies to construction projects initiated by Australian Government agencies. The Building Code also applies to construction projects which have been indirectly funded by the Australian Government subject to the thresholds in Schedule 1 of the Building Code. Where Funding Entities are not the direct client, but are responsible for administering Australian Government programme expenditure involving construction, the Funding Entity must ensure the grantee or recipient of the Australian Government funding applies the Building Code subject to the thresholds in Schedule 1 of the Building Code. Funding Entities acting as funding administrators must include a provision in funding agreements, requiring recipient organisations and all parties to a project to apply the Building Code. Similarly, the Building Code applies to pre-commitment lease projects, Build, Own, Operate, Transfer (BOOT) and Build, Own, Operate (BOO) projects initiated by a Funding Entity for the delivery of Australian Government functions or services. In many cases a Funding Entity will be the subsequent tenant of such projects and can request Code compliance in accordance with Section 3.1 of the Supporting Guidelines. The Building Code also applies to both Public Private Partnerships (PPPs) and Private Finance Initiatives (PFIs) as set out in Section 3.1 of the Supporting Guidelines. The service delivered may be paid for by the Australian Government or directly by the end user. The Department of Education, Employment and Workplace Relations can provide advice to funding agencies on the Building Code and Supporting Guidelines, including the limited circumstances in which requirements may be waived or varied. Departments, agencies, prescribed CAC Act bodies and contractors that are required to comply with the Building Code and Supporting Guidelines should include the following clauses in all funding agreements for both directly and indirectly funded projects: 2

1. In these clauses: a) the Building Code means the Building Code 2013. The Building Code can be downloaded from www.employment.gov.au/buildingcode b) the Supporting Guidelines means the Supporting Guidelines for the Building Code 2013. The Supporting Guidelines can be downloaded from: www.employment.gov.au/buildingcode c) the Organisation means the state/territory department, Funding Entity, agency or organisation to which the Commonwealth has directed the Programme Expenditure d) the Programme Expenditure means the funding provided by the Commonwealth for the Project e) the Project Parties means all contractors, subcontractors, consultants and employees who perform on site work in relation to the Project f) the Project means the works to be executed through the Programme Expenditure. 2. Where the Programme Expenditure specifically relates to building and construction activity, subject to the thresholds specified in the Building Code, the Organisation must comply and ensure that the Project Parties comply with the Building Code. 3. The Building Code requires the Organisation to ensure that: a) all requests for tender, expressions of interest, submissions and invitations to join Common Use Arrangements in relation to the Project made by it, or any of the Project Parties, contain the commitment to apply the Building Code as set out in the model tender documents; and b) all contracts entered into in relation to the Project by it, or any of the Project Parties, contain the commitment to apply the Building Code as set out in the model contract clauses. 4. The Organisation must maintain adequate records of compliance by it, and each of the Project Parties, with the Building Code. The Organisation must permit the Commonwealth and those authorised by the Commonwealth, including a person occupying a position in the Fair Work Building Industry Inspectorate, full access to the premises and records of the Organisation and the Project Parties to: a) inspect any work, material, machinery, appliance, article or facility; b) inspect and copy any record relevant to the Project and works governed by this agreement; and c) interview any person as is necessary to monitor compliance with the Building Code. Additionally, the Organisation undertakes that it, and each of the Project Parties will agree 3

to a request from the Commonwealth, including a person occupying a position in the Fair Work Building Industry Inspectorate, to produce a specified document within a specified period, in person, by fax or by post. 5. The Commonwealth and those authorised by it, may publish or otherwise disclose information in relation to compliance by the Organisation and the Project Parties with the Building Code. The Organisation must obtain the consent of the Project Parties to the publication or disclosure of information under this clause. 6. While acknowledging that value for money is the core principle underpinning decisions on government procurement, when assessing tenders the Organisation may preference contractors, subcontractors and consultants that have a demonstrated commitment to: a) adding and/or retaining trainees and apprentices; b) increasing the participation of women in all aspects of the industry; or c) promoting employment and training opportunities for Indigenous Australians in regions where significant indigenous populations exist. 7. The Organisation must not appoint a contractor, subcontractor or consultant in relation to the Project where: a) the appointment would breach a sanction imposed by the Minister for Employment; or b) the contractor, subcontractor or consultant has had a judicial decision against them relating to employee entitlements, not including decisions under appeal, and has not paid the claim. 4

Minor works and very small contracts ($25,000 or less) Funding entities are required to apply the Building Code and Supporting Guidelines to minor works or very small contracts (where the value of the contract is $25,000 or less) (see Section 4.4 of the Supporting Guidelines). Departments, agencies and prescribed CAC Act bodies may wish to include the following clause in advertisement, tender, purchase orders or contractual documentation rather than the full model tender and contract clauses: The Building Code 2013 (Building Code), applies to this project. By agreeing to undertake the works, you will be taken to have read and to agree to comply with the Building Code. Contractors and subcontractors must include the following clause in advertisement, tender, purchase orders or contractual documentation rather than the full model tender and contract clauses (see section 4.4 of the Supporting Guidelines): The Building Code 2013 (Building Code) applies to this project. By agreeing to undertake the works, you will be taken to have read and to agree to comply with the Building Code. 5

Advertisement clause: work valued over $25,000 The Supporting Guidelines require departments, agencies and prescribed CAC Act bodies to: Ensure tenderers and entities submitting expressions of interest or tenders demonstrate their Building Code compliance when they lodge an expression of interest or tender for Australian Government building and construction projects. Advise all tenderers that compliance with the Building Code is to extend to all subcontractors and consultants who may be engaged by the tenderer on the Project (see Section 4.1 of the Supporting Guidelines). Advise all tenderers that compliance with the Building Code is to extend to their future privately funded construction projects in Australia (see Section 4.1 of the Supporting Guidelines). Include in all advertisements calling for expressions of interest or request for tenders etc the following statement: The Building Code 213 applies to this project. 6

Conditions for participation clause: work valued over $25,000 Conditions for participation The Building Code requires compliance as a condition for participation in tenders for Australian Government funded construction work. Funding entities and building contractors must advise interested parties that the Building Code can be obtained from the department s website www.employment.gov.au/buildingcode. Conditions for participation are minimum requirements that must be met in order to be eligible for consideration in a tender. Funding entities and building contractors should include the following clause: It is a condition for participation that Tenderers comply with the Building Code 2013 (Building Code). It is also a condition for participation in this Tender that, at the time of lodgement of the expression of interest or tender, the Tenderer must not be precluded from tendering for Australian Government funded building and construction work. Further, consistent with Section 4.2.2 of the Supporting Guidelines, Funding Entities must not enter into contracts with tenderers who have had an adverse Court or Tribunal decision (not including decisions under appeal) for a breach of workplace relations law, work health and safety law, or workers compensation law and the tenderer has not fully complied, or is not fully complying, with the order. 7

Tender clauses: work valued over $25,000 Funding entities and building contractors should incorporate the clauses below into all tender documentation (including expressions of interest) for both directly and indirectly funded projects: 1. The Tenderer s attention is drawn to the Building Code 2013 (Building Code) and the Supporting Guidelines to the Building Code 2013 (Supporting Guidelines). Copies of the Building Code and Supporting Guidelines are available at www.employment.gov.au/buildingcode. 2. By submitting an expression of interest or tender to undertake the work/services you: a) will be deemed to have read; and agree that you must comply with the Building Code. Notwithstanding any other provisions of the Tender Documents, Tenderers hereby consent to the disclosure of information concerning compliance with the Building Code, including details of whether or not a sanction (see Section 8.2 of the Supporting Guidelines) has been imposed. This consent extends to disclosure by the Commonwealth, its agencies and ministers, and disclosure to others for the purposes of facilitating compliance with the Building Code and the exercise of their statutory and portfolio responsibilities. Tenderers must ensure that their proposed subcontractors and consultants are also aware of, and agree to comply with, these rights of use and disclosure. 3. Tenderers should be aware that the Building Code applies to: a) the project which is the subject of these Tender Documents; and b) all construction and building work undertaken by the Tenderer and its related entities (see section 8 of the Building Code) thereafter as defined in the Building Code, including work on all new privately funded construction projects in Australia. 4. Tenderers are required to comply with the Building Code. As part of their tender response, Tenderers must submit a signed Declaration of Compliance in accordance with the Declaration of Compliance which is attached to this Request for Tender. 5. Each Tenderer must indicate in its Tender response: a) whether the Tenderer or a related entity of the Tender has ever been subject to a sanction imposed under the Building Code and Supporting Guidelines; b) whether the Tenderer has had an adverse Court or Tribunal decision (not including decisions under appeal) for a breach of workplace relations law, work health and safety 8

law, or workers compensation law and the tenderer has not fully complied, or is not fully complying, with the order. c) whether the Tenderer has had any adverse court, tribunal, industrial relations commission or Fair work Australia finding, order or penalty awarded against them in the last two years (and if so provide details); d) how the Tenderer and its related entities have complied with the Building Code in the past (if the Tenderer has undertaken Australian Government funded construction work in the past); e) how the Tenderer intends to comply with the Building Code in performing the Contract, should it be the successful Tenderer; and f) where the Tenderer proposes to subcontract an element of the project, either: i) the information detailed in the above subclauses (a) and (b) in relation to each subcontractor, or ii) how the Tenderer intends to ensure each subcontractor complies with the Building Code. g) where the tenderer has an enterprise agreement made under the Fair Work Act on or after 1 February 2013, Australian Government agencies must require the tenderer to confirm, in their submission, that the agreement includes genuine dispute resolution procedures. 6. While acknowledging that value for money is the core principle underpinning decisions on Government procurement, tenderers should note that when assessing tenders, preference may be given to Tenders that demonstrate a commitment to: a) adding and/or retaining trainees and apprentices; b) increasing the participation of women in all aspects of the industry; or c) promoting employment and training opportunities for Indigenous Australians in regions where significant indigenous populations exist. 9

Declaration of Compliance The following Declaration of Compliance should be included as an attachment to tender documentation (including expressions of interest) for both directly and indirectly funded projects: Declaration of Compliance with the Building Code 2013. Name of Australian Government project tendered for: Name of Tenderer, ABN and ACN: 1. The Tenderer confirms that it has complied with the Building Code 2013 (Building Code), in preparing this Tender. 2. The Tenderer undertakes that it complies with the Building Code, and has complied with the Building Code from the time of lodgement of this tender, and that it will require compliance by its related entities (see section 8 of the Building Code). 3. The Tenderer undertakes to ensure compliance from all subcontractors and consultants engaged on this project, should it be the successful Tenderer. All contracts must expressly require compliance with the Building Code. 4. The Tenderer agrees that it and its subcontractors and its related entities will provide the Commonwealth or any person authorised by the Commonwealth, including a person occupying a position in the Fair Work Building Industry Inspectorate, with access to: (a) inspect any work, material, machinery, appliance, article or facility; (b) inspect and copy any record relevant to the Project and Works the subject of this Contract; (c) interview any person; and (d) any document requested under this contract. The document must be provided within the period specified either in person, by fax or by post, as is necessary to demonstrate its compliance with the Building Code. 5. The Tenderer acknowledges that it is aware the Commonwealth or Minister for Employment may impose a sanction on a Tenderer or Contractor that does not comply with the Building Code. The sanction imposed may include but is not limited to: 10

(a) (b) (c) (d) (e) (f) the reporting of the breach to an appropriate statutory body or law enforcement agency (if there is evidence that the breach may also be a breach of a Commonwealth or State law), or industry association; issuing of a formal warning that future breaches may lead to more significant sanctions; preclusion from Tendering for any Commonwealth funded building and construction work for a specified period; communication of sanction details to all Commonwealth agencies to ensure a whole-of-government approach; publication of details of the breach and identification of the party committing the breach; and a reduction in the number of tendering opportunities that are given. 6. The Tenderer is to select which of the following clauses in italics is appropriate and delete the remaining clause: OR a) The Tenderer hereby gives its consent, and confirms that its related entities give their consent, to disclosure by the Commonwealth, its agencies and ministers, of information concerning the Tenderer s and its related entities compliance with the Building Code and whether or not a sanction has been imposed on the Tenderer and/or related entity of the Tenderer, for the exercise of their statutory and portfolio responsibilities (the Purposes). b) The Tenderer has previously given its consent, and confirms that its related entities have previously given their consent, to disclosure by the Commonwealth, its agencies and ministers, of information concerning the Tenderer s and its related entities compliance with the Building Code and whether or not a sanction has been imposed on the Tenderer and/or a related entity of the Tenderer for the exercise of their statutory and portfolio responsibilities (the Purposes), and confirms that the Tenderer and its related entities have not revoked that consent. 7. The Tenderer has obtained or will obtain the consent of each subcontractor and consultant proposed in its Tender to disclosure by the Commonwealth, its agencies and ministers, of information concerning the proposed subcontractors, compliance with the Building Code and whether or not a sanction has been imposed on any proposed subcontractor, for the Purposes. 8. The Tenderer acknowledges that the consents provided in clause 6 are not limited to this Tender process as the Tenderer is expected to comply with the Building Code in future projects. 11

9. The Tenderer will: (a) Describe how the Tenderer has complied with the Building Code in the past (if the Tenderer has undertaken Australian Government funded construction work in the past) and how it will comply if successful. For example, the tenderer will: (i) comply with the Building Code; (ii) require compliance with the Building Code from all subcontractors before doing business with them; (iii) apply the Building Code to privately funded projects that commence after they first lodge an expression of interest or tender for an Australian Government project; (iv) ensure that contractual documents allow for a person occupying a position in the Fair Work Building Industry Inspectorate to access sites, documents and personnel to monitor compliance with the Building Code, including privately funded construction sites; (v) ensure project managers or head contractors establish appropriate processes to ensure freedom of association; (vi) ensure there is a work health safety and rehabilitation (WHS&R) plan for the Project; (vii) respond to requests for information concerning Building Code-related matters made on behalf of Code Monitoring Group (CMG); (viii) where practicable, ensure contractors or subcontractors initiate voluntary remedial action aimed at rectifying non-compliant behaviour when it is drawn to their attention; (ix) ensure that CMG secretariat is notified of any alleged breaches, voluntary remedial action taken or other Building Code-related matters within 21 days of the party becoming aware of the alleged breach; and (x) be aware that and ensure that sanctions applied under the Building Code are enforced including the exclusion of identified parties from work opportunities in accordance with decisions advised by CMG. (b) Where the Tenderer proposes to subcontract an element of the work, the Tenderer is either to: (i) provide the information detailed at (a) in relation to each subcontractor; or (ii) detail how the Tenderer intends to ensure compliance with the Building Code by each subcontractor. (c) Ensure that where threatened or actual industrial action occurs on a project, contractors, subcontractors, consultants or project managers report such action to the Funding Entity. 10. Where the tenderer has a Fair Work Act 2009 enterprise agreement that was approved on or after 1 February 2013 that enterprise agreement includes a genuine dispute resolution procedure that includes the following: 12

the ability for employees to appoint a representative in relation to the dispute; in the first instance procedures to resolve the dispute at the workplace level; if a dispute is not resolved at the workplace level, the capacity for a party to the dispute to refer the matter to an independent third party for mediation or conciliation; and if the dispute is still not resolved, the capacity for an independent third party to settle the dispute via a decision binding on the parties. Privately Funded Projects: 11. The Tenderer declares that, in respect to privately funded projects: (a) The Tenderer and its related entities will comply with the Building Code on all the Tenderer s and its related entities future privately funded projects. (b) The Tenderer must maintain adequate records of compliance with the Building Code by the Tenderer, its subcontractors and related entities. (c) The Tenderer agrees that it and any of its related entities will provide the Commonwealth or any person authorised by the Commonwealth, including a person occupying a position in the Fair Work Building Industry Inspectorate, with access to: (i) inspect any work, material, machinery, appliance, article or facility; (ii) inspect and copy any record relevant to the Project the subject of this Contract; and (iii) interview any person, as is necessary to allow validation of its compliance with the Building Code. (d) The Tenderer agrees that the Tenderer and its related entities will agree to a request from the Commonwealth or any person authorised by the Commonwealth, including a person occupying a position in the Fair Work Building Industry Inspectorate, to produce a specified document within a specified period, in person, by fax or by post. (e) The Tenderer will ensure that the Tenderer and its related entities permit the Commonwealth or any person authorised by the Commonwealth, including a person occupying a position in the Fair Work Building Industry Inspectorate, to have access to records and to the related entities and subcontractors premises (to inspect and copy records), as is necessary to ensure that the subcontractors and related entities are complying with the Building Code. [To be signed by Tenderer insert appropriate signature block.] 13

Contract clauses: agreements with contractors The Supporting Guidelines requires that compliance with the Building Code must be made a condition for participation for Australian Government funded construction work. Departments, agencies, prescribed CAC Act bodies and contractors should incorporate the clauses below into all contract documentation for directly funded projects and Funding Recipients and contractors for indirectly funded projects: 1. The Contractor must comply with the Building Code 2013 (Building Code). Copies of the Building Code are available at www.employment.gov.au/buildingcode. 2. Compliance with the Building Code shall not relieve the Contractor from responsibility to perform the Contract, or from liability for any defect in the works arising from compliance with the Building Code. 3. Where a change in the Contract is proposed and that change would affect compliance with the Building Code, the Contractor must submit a report to the Commonwealth specifying the extent to which the Contractor s compliance with the Building Code will be affected. 4. The Contractor must maintain adequate records of the compliance with the Building Code by: (a) (b) (c) (d) the Contractor; its Subcontractors; consultants; and its Related Entities (refer Section 8 of the Building Code). 5. If the Contractor does not comply with the requirements of the Building Code in the performance of this Contract such that a sanction is applied by the Minister for Employment, the Code Monitoring Group or the Commonwealth, without prejudice to any rights that would otherwise accrue, those parties shall be entitled to record that non-compliance and take it, or require it to be taken, into account in the evaluation of any future tenders that may be lodged by the Contractor or a related entity in respect of work funded by the Commonwealth or its agencies. 6. While acknowledging that value for money is the core principle underpinning decisions on Government procurement, when assessing tenders, the Contractor may give preference to subcontractors and consultants that have a demonstrated commitment to: (a) (b) (c) adding and/or retaining trainees and apprentices; increasing the participation of women in all aspects of the industry; or promoting employment and training opportunities for Indigenous Australians in regions where significant indigenous populations exist. 14

7. The Contractor must not appoint a subcontractor or consultant in relation to the Project where: (a) (b) the appointment would breach a sanction imposed by the Minister for Employment; or the subcontractor or consultant has had an adverse Court or Tribunal decision (not including decisions under appeal) for a breach of workplace relations law, work health and safety law, or workers compensation law and the tenderer has not fully complied, or is not fully complying, with the order. 8. The Contractor agrees to require that it and its subcontractors or consultants and its related entities provide the Commonwealth or any person authorised by the Commonwealth, including a person occupying a position in the Fair Work Building Industry Inspectorate, with access to: (a) inspect any work, material, machinery, appliance, article or facility; (b) inspect and copy any record relevant to the Project the subject of this Contract; and (c) interview any person as is necessary to demonstrate its compliance with the Building Code. 9. Additionally, the Contractor agrees that the Contractor and its related entities will agree to a request from the Commonwealth or any person authorised by the Commonwealth, including a person occupying a position in the fair Work Building Industry Inspectorate, to produce a specified document within a specified period, in person, by fax or by post. 10. The Contractor must ensure that all subcontracts impose obligations on sub-contractors equivalent to the obligations under these Contract Clauses. 15