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From: STEPHAN,Pete
Sent: Tuesday, 21 October 2008 11:27 AM
To: CAMARA,Regina; WHITE,Adrian; KETTLE, Mark
CC: WILLING,Jeff
Subject: FW: CPG amendments impact on the Code and Guidelines
Hello again
Attached is the letter to agencies referred to in our meeting this morning. I understand that you may have
received a copy previously.
If you have any questions on the contents of the letter, or other matters related to the code and guidelines,
please feel free to give me a call.
Regards
Pete
Pete Stephan
Director - Policy Implementation Team
Building Industry Branch
Phone 02 6121 5654
Fax 02 6204 2384
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Your Ref
Our Ref
Heads of Corporate
Australian Government Agencies
Dear Head of Corporate
Minister Tanner's announcement concerning revised Commonwealth Procurement Guidelines
On Friday 10 October 2008, the Minister for Finance and Deregulation, the Hon Lindsay Tanner MP, issued a
media release which foreshadowed the imminent release of revised Commonwealth Procurement
Guidelines (CPGs).
A key change to the CPGs, foreshadowed by Minister Tanner, is the addition of a concise explanation of how
policies impacting on procurement apply under Regulation 9 of the Financial Management and
Accountability Act. This change allows examples of policies which impact on procurement, such as the
National Code of Practice for the Construction Industry (the Code), to be deleted from the CPGs.
In order to ensure there is no misunderstanding, the removal of the examples of policies which impact on
procurement does not remove the existing obligation that agencies have in relation to the Code and the
Australian Government Implementation Guidelines for the National Code of Practice for the Construction
Industry (the Guidelines) or the Federal Safety Commission (FSC) Scheme.
Code and Guidelines
As you are aware, current Government policy, as articulated in the Guidelines, requires departments and
agencies to ensure all contractors, subcontractors and material suppliers tendering for Australian
Government funded construction to be compliant with the Code and Guidelines, particularly in regard to
having compliant workplace relations arrangements. As a result, many significant state and local government
construction projects are covered by the Code and Guidelines.
However, the Government's commitment to infrastructure spending, particularly in cases where the nature
and scale of the project is unique, has meant that aspects of construction policy pose some risks.
To overcome these situations, there continues to be capacity to waive elements of the 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
Those elements of a project which may only be carried out by a public utility whose industrial
instrument is not currently Code compliant (e.g. movement of electrical mains); or
where no suitable compliant tenderer is identified at the completion of a competitive tender process.
In such circumstances, consistent with past practices, the following conditions must continue to be met:

the scope of any Code and Guidelines requirements which are not to be applied must be determined
and documented for each project; and
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
the following elements of the Guidelines must always be applied:
o project monitoring and reporting requirements; and
o acceptance of the sanctions regime.
The power to approve such waivers, consistent with FMA regulations, rests with the relevant funding
agency. Consistent with the past practice the application of the Code and Guidelines will be monitored by
the Code Monitoring Group. Funding agencies should continue to advise the Code Monitoring Group of the
alleged breaches of the Code and Guidelines.
The Department will be undertaking presentations to assist Agencies with their Code and Guidelines
responsibilities under the revised CPGs. Should you wish to organise a meeting, or would like additional
assistance or information, please contact Mr Guy Randell, Director, Building Industry Branch on (02) 6121
6875.
For further information see “Public Interest Test – A Guide for Government Agencies” enclosed at
Attachment A.
FSC Scheme
You should also be aware the changes to the CPGs do not affect your legislative requirement to apply the
Australian Government Building and Construction OHS Accreditation scheme. The Office of the Federal
Safety Commissioner (OFSC) has prepared a summary of these requirements, which is enclosed at
Attachment B.
Further information on the correct application of these Australian Government policies which interact with
the CPGs can be obtained from the following points:


questions regarding the application of the Code and Guidelines to the Australian Government
funded projects should be directed to
Mr Jeff Willing, Branch Manager Building Industry Branch, (02) 6240 1988
(jeff.willing@deewr.gov.au) or
Mr Guy Randell, Director Building Industry Branch, (02) 6121 6875
(guy.randell@deewr.gov.au); and
questions regarding the FSC Scheme should be directed to
Ms Helen Marshall, Federal Saftey Commissioner, (02) 6218 3182
(helen.marshall@deewr.gov.au); or
Mr Matt Gardiner, Director Scheme Operations & Liaison, (02) 6121 5133
(matthew.gardiner@deewr.gov.au)
Advice on the revised CPGs is available from the Department of Finance and Deregulation, at
http://www.finance.gov.au/publications/fmg-series/procurement-guidelines/index.html
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I would appreciate if you could ensure this advice is provided to all relevant staff in your agency.
Yours sincerely
Michael Maynard
Group Manager
Workplace relations Implementation Group
13 October 2008
Attachment A: Public Interest Test – A Guide for Government Agencies
Attachment B: OFSC Fact Sheet
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Attachment A
Fact sheet: National Code of Practice for the Construction Industry (the Code) and
the associated Australian Government Implementation Guidelines (the Guidelines).
Public Interest Test - A Guide for Government Agencies
The Code and Guidelines set out the responsibilities of all parties on building and construction projects funded
by the Australian Government. The Guidelines were developed to assist Government agencies and interested
parties to interpret and implement the Code.
Where the Code and Guidelines apply
The 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 construction projects to which the
Australian Government has contributed funding.
In the event that a funding Agency believes that strict application of the Code and Guidelines would entail an
unreasonable restriction or penalty for the Government in pursuing its other policy objectives, particularly in
the area of infrastructure development, the Agency may in limited situations waive specific requirements of
the Code and Guidelines.
Circumstances in which a waiver may be considered:
 The nature of the project requires it to be carried out by a public utility (eg movement of electrical
mains).
 The project is urgently required because of an emergency (eg natural disasters).
 Where no suitable compliant tenderer is identified at the completion of a competitive tender process.
Conditions of the waiver:
 The scope of any waiver is to be determined on a project-by-project basis.
 Waivers cannot exclude the entire project from all aspects of the Guidelines – the waiver must record the
specific elements of the Code and Guidelines which are to be waived.
 In the instance that a company is granted a waiver, in relation to specific requirements of a project, the
company is not required to apply the Code and Guidelines to their related entities and on privately
funded projects until such time as they next tender for an Australian Government building and
construction project..
 Onsite behaviours must be in accordance with the Code and Guidelines except for the specific elements
that are being waived. For the specific elements the contractor must ensure onsite practices are in
accordance with law.
Elements that cannot be waived:
 Obligations to pass the requirements of the Code and Guidelines along the contractual chain.
 Project monitoring and reporting requirements (eg. Australian Building and Construction Commission
access to the project).
 Acceptance of the sanctions regime of the Code and Guidelines.
October 2008
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Granting of a waiver:
The power to approve waivers will rest with the relevant funding agency.
FMA Regulation 8 and CAC Regulation 47 requires compliance with government procurement requirements
as far as practicable, and where officials act in a manner inconsistent with the Commonwealth Procurement
Guidelines, they must document their reasons for doing so.
Model Tender and Contract Documentation
Model tender and contract documentation are available at www.workplace.gov.au/building.
Agencies that have satisfied the requirements of the public interest test and require assistance with
documentation for application of a waiver should contact the Building Industry Branch of the Department of
Education, Employment and Workplace Relations, on the following contacts, who will assist with advice and
construction of model clauses.
Government agencies should use these clauses when preparing expressions of interest, tenders, contracts
and funding agreements for building and construction projects funded directly or indirectly by the Australian
Government, including those issued with a waiver.
Further information
Questions regarding the application of the Code and Guidelines to Australian Government funded projects
should be directed to;
Mr Jeff Willing, Branch Manager Building Industry Branch, (02) 6121 4435 (jeff.willing@deewr.gov.au)
or Mr Guy Randell, Director Building Industry Branch, (02) 6121 6875 (guy.randell@deewr.gov.au)
The Code and Guidelines documents are available from the Workplace website:
www.workplace.gov.au/building; by emailing a request to building@deewr.gov.au; or calling the Code
Hotline on 1300 731 293.
08_416B
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Attachment B
Advice to Agencies: Applying the Australian Government Building and Construction
OHS Accreditation Scheme
The Australian Government Building and Construction OHS Accreditation Scheme (the Scheme) is
established under the Building and Construction Industry Improvement Act 2005 (the BCII Act).
The BCII Act places specific legal obligations on agencies as clients of the building and construction
industry. It is critical that staff involved in procurement processes understand these obligations and
ensure procurement documentation reflects these requirements.
The Scheme enables the Australian Government to use its influence as a major construction client and
provider of capital to improve the OHS performance of the building and construction industry. Through the
Scheme, the government aims to foster a culture where work must be performed on budget, on time and
safely.
The Scheme operates such that, subject to certain thresholds, only head contractors who are accredited
under the Scheme can enter into contracts for building work that is funded directly or indirectly by the
Australian Government.
What is directly funded building work?
Projects are considered to be directly funded where an Australian Government agency is the client. This
includes pre-commitment leases and similar arrangements.
Typical examples of directly funded projects are the Department of Defence constructing a new military
facility or an agency arranging for the construction of a new office or a fit out of an existing building.
The Scheme must be applied to all directly funded building work with a value of $3 million and above
(including GST).
What is indirectly funded building work?
Projects are considered indirectly funded where the Australian Government contributes funding to a third
party recipient, such as a state government, through funding agreements, grants or other programs.
Some typical examples of indirectly funded building work are where the Australian Government provides
funding for a state government to construct a road, or where the Australian Government provides funding to
a university to construct a research facility.
Application of the Scheme must be a condition of funding agreements and grants where:
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
the Australian Government contribution to the project is $5 million and represents at least 50 per
cent of the total project value; or
$10 million, irrespective of the overall proportion.
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Resources for agencies
A suite of resources for agencies is available from the link fsc.gov.au, including model clauses for your tender
documents, contracts, grants and so forth, plus a full list of accredited head contractors.
Assistance for agencies
For assistance on how to meet obligations under the BCII Act, agencies can contact the Office of the Federal
Safety Commissioner on 1800 652 500 or email to ofsc@deewr.gov.au.
GPO Box 9879 Canberra ACT
2601 ABN 63 578 775 294
Ph: 1800 652 500
fsc.gov.au
The vision of the Federal Safety Commissioner is world class safety throughout the Australian building and
construction industry
Current at 7 July 2008