Report 31

Assessment of Progress to Improve Payment Security for Government Construction Subcontractors

Legislative change has occurred and more is planned

SBDC's - Legislative change has occurred

[6] Collins, B QC 2012, Final Report Independent Inquiry into Construction Industry Insolvency in NSW, New South Wales Government.

The Building Commission has done a range of work to address the SBDC’s recommendation that it review the suite of dispute resolution legislation and services for which it has oversight. Principally, it supported an independent review[1] of the Construction Contracts Act 2004 (CCA).

In its support of the review, the Building Commission provided staff and other administrative services, including the management of reference groups. It has also worked with Parliamentary Counsel to draft amendments to the CCA based on the recommendations of the review. Parliament passed the first of 2 proposed sets of legislative amendment in November 2016.

The amendments passed in November 2016 mostly address increased time for subcontractors to lodge payment dispute claims. The second proposed set of amendments would address issues such as professional development of adjudicators of payment disputes, penalties for failure to comply with the CCA, and reducing overlap in the CCA.

The Building Commission has told us that in December 2016 it received Government approval to fund 2 positions to deliver process improvements to support the recent amendments and the proposed second set of amendments.

In regard to Part b of this suite of SBDC recommendations, the Commission advised that it has reviewed the Collins report as part of previous research it undertook about statutory trusts for construction contracts. Further, it intends to establish a reference group so that it can advise Government on matters concerning construction industry insolvency.

Responsibility for 2 of the SBDC recommendations were not assigned

SBDCs - Awarding of contracts

We found that Parts c and d of this suite of the SBDC’s recommendations were not assigned to a specific agency and that no agency has stepped forward to take responsibility for them. We also found no agency is currently intending to take responsibility for these recommendations.

In our view, BMW and the Building Commission need to clarify with Government whether it wishes to implement these recommendations.

 

[1] Professor Philip Evans, Report on the Operation and Effectiveness of the Construction Contract Act 2004 (WA), August 2015.

 

 

 

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