Code for the Tendering and Performance of Building Work 2016

made under section 34 of the

Building and Construction Industry (Improving Productivity) Act 2016

Compilation No. 4

Compilation date: 26 July 2022

Includes amendments up to: F2022L01007

Registered: 11 August 2022

About this compilation

This compilation

This is a compilation of the Code for the Tendering and Performance of Building Work 2016 that shows the text of the law as amended and in force on 26 July 2022 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Legislation Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on the Legislation Register for the compiled law.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on the Legislation Register for the compiled law.

Self‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

Contents Page

Part 1 Introductory

1 Name of code of practice

3 Definitions

4 Funding entities

Part 2 Conduct

6 Application of the code of practice

6A Exemption for essential service providers

6B  Exemption for essential services infrastructure

Part 3 Requirements to be complied with by code covered entities in respect of building work

11F Engagement of non-citizens or non-residents

Part 5 Funding Entities

25A Information to be provided by preferred tenderer

26 Contracts

Part 6 Application and transitional provisions

30 Transitional provisions relating to the Code for the Tendering and Performance of Building Work Amendment Instrument 2022—exemptions

31 Transitional provisions relating to the Code for the Tendering and Performance of Building Work Amendment Instrument 2022—exclusion sanctions

Schedule 1 Building work to which code of practice applies

Endnote 1—About the endnotes

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4 –Amendment History

Part 1 Introductory

1 Name of code of practice

 This code of practice is the Code for the Tendering and Performance of Building Work 2016.

3 Definitions

(1) In this code of practice:

Act means the Building and Construction Industry (Improving Productivity) Act 2016.

code covered entity has the meaning given by section 6.

Note 1: paragraph 34(3)(a) of the Act provides that the code may require a person to comply with it in respect to building work only if the person is a building contractor that is a constitutional corporation.

Note 2: paragraph 34(3)(b) of the Act provides that the code may require a person to comply with it only if the person is a building industry participant carrying out work in a Territory or Commonwealth place. The definition of ‘building industry participant’ includes building contractors.

Commonwealth funded building work means building work described in any of items 1 to 8 of Schedule 1, other than building work to which item 10 of that Schedule applies.

essential services infrastructure: see subsection 6B(5).

funding entity: see section 4.

infrastructure exemption: see subsection 6B(2).

intelligence or security agency has the same meaning as in section 85ZL of the Crimes Act 1914.

security has the same meaning as in the Australian Security Intelligence Organisation Act 1979.

subcontractor is not confined to an individual.

(2) In this code of practice, an entity (the second entity) is a related entity of a code covered entity if the second entity is engaged in building work and is:

(a) connected with the code covered entity by being a member of the entity; or

(b) an associated entity (within the meaning of section 50AAA of the Corporations Act 2001) of the code covered entity.

Note: two entities will be associated if they are related bodies corporate.

(3) In this code of practice, an exclusion sanction means a period during which a code covered entity is not permitted to tender for, or be awarded, Commonwealth funded building work. An exclusion sanction may:

(a) be for any period that the Minister is satisfied is appropriate, but no longer than 1 year in duration;

(b) be subject to conditions that apply the exclusion sanction only to a division of a business operating in a particular state or territory; and

(c) be extended to related entities if the Minister is satisfied it is appropriate to do so.

(4) In this code of practice, building work has the same meaning as in section 6 of the Act, but does not include:

(a) work that is described in paragraph 6(1)(e) of the Act;

(b) the off-site prefabrication of made-to-order components to form part of any building, structure or works unless that work is performed on an auxiliary or holding site that is separate from the primary construction site or sites.

4 Funding entities

In this code of practice, each of the following is a funding entity:

(a) a non-corporate Commonwealth entity within the meaning of the Public Governance, Performance and Accountability Act 2013;

(b) a corporate Commonwealth entity within the meaning of the Public Governance, Performance and Accountability Act 2013 that is directed by the Minister for Finance to comply with this code of practice.

Part 2 Conduct

6 Application of the code of practice

(1) A building contractor or building industry participant that could be required to comply with this code of practice by section 34 of the Act becomes subject to this code of practice (a code covered entity) from the first time they submit an expression of interest or tender (howsoever described) for Commonwealth funded building work on or after the date this code of practice commences.

Related entities become code covered entities

(2) A related entity of an entity (the first entity) becomes a code covered entity subject to this code of practice at the time the first entity becomes subject to the code of practice. 

Code of practice applies to all new work

(3) A code covered entity is subject to this code of practice in respect of all building work that is described in any of items 1 to 9 of Schedule 1 for which an expression of interest or request for tender (howsoever described) was called on or after the date this code of practice commenced.   

Note 1: see section 2 for commencement date.

Note 2: Commonwealth funded building work is a defined term, see section 3.

Note 3: related entity is a defined term, see subsection 3(2).

Note 4: once a building contractor or building industry participant is subject to this code of practice, it and its related entities must comply with this code of practice on all new projects, including projects that are privately funded.

6A Exemption for essential service providers

(1) The Minister may exempt a building contractor or building industry participant from this code of practice if the Minister is satisfied that:

(a) building work performed by the building contractor or building industry participant involves the provision of essential services related to supply of electricity, natural gas, water, waste water, or telecommunications; and

(b) granting an exemption would be appropriate in the circumstances.

(2) An exemption must be issued in writing and may apply to building work performed by the building contractor or building industry participant for a period of time or may apply to a specified project.

(3) If the building contractor or building industry participant is a code covered entity the effect of an exemption is that the entity is deemed to not be a code covered entity for the duration of the specified period or in relation to the specified project.

(4) If the building contractor or building industry participant is not a code covered entity the effect of an exemption is that section 6 does not apply in relation to work covered by the exemption.

6B  Exemption for essential services infrastructure

Applying for exemptions

(1) A building contractor or building industry participant may apply to the Minister for an exemption from this code of practice.

(2) The Minister must grant the exemption (the infrastructure exemption) if the Minister is satisfied that:

(a) the principal business of the building contractor or building industry participant involves performing work for the provision of essential services related to supply of electricity, natural gas, water, waste water, or telecommunications; and

(b) the principal building work of the building contractor or building industry participant involves performing work for the provision of essential services infrastructure.

(3) An infrastructure exemption must be issued in writing and applies:

(a) for the period specified in the exemption; or

(b) if no period is specified, until it is revoked.

Revoking exemptions

(4) The Minister must revoke an infrastructure exemption (including an exemption issued for a specified period) if the Minister is satisfied that paragraph (2)(a) or (b) no longer applies in relation to the building contractor or building industry participant.

Meaning of essential services infrastructure

(5) Essential services infrastructure means systems or networks:

(a) to which consumers can connect for supply of electricity, natural gas, water, waste water, or telecommunications; and

(b) that:

(i) are important for the life, the personal safety or health, or the welfare, of the population or a significant part of it; or

(ii) make a significant contribution to the Australian economy or an important part of it.

Effect of infrastructure exemption

(6) If a building contractor or building industry participant is a code covered entity the effect of an infrastructure exemption is that the entity is deemed to not be a code covered entity while the exemption applies.

(7) If a building contractor or building industry participant is not a code covered entity the effect of an infrastructure exemption is that section 6 does not apply while the infrastructure exemption applies.

Part 3 Requirements to be complied with by code covered entities in respect of building work

11F Engagement of non-citizens or non-residents

(1) A code covered entity must ensure that no person that is not an Australian citizen or Australian permanent resident (within the meaning of the Migration Act 1958) is employed to undertake building work for the code covered entity unless:

(a) the position is first advertised in Australia; and

(b) the advertising was targeted in such a way that a significant proportion of suitably qualified Australian citizens and Australian permanent residents would be likely to be informed about the position; and

(c) any skills or experience requirements set out in the advertising were appropriate to the position; and

(d) the employer demonstrates that no Australian citizen or Australian permanent resident is suitable for the job.

Note: The Migration Act 1958 and its subordinate legislation contain requirements relating to the engagement of persons that are not Australian citizens or Australian permanent residents.

Part 5 Funding Entities

25A Information to be provided by preferred tenderer

(1) A funding entity must ensure that before a contract is entered into in respect of Commonwealth funded building work, the preferred tenderer provides the following information:

(a) the extent to which domestically sourced and manufactured building materials will be used to undertake the building work;

(b) whether the building materials to be used to undertake the building work comply with relevant Australian standards published by, or on behalf of, Standards Australia;

(c) the preferred tenderer’s assessment of the whole-of-life costs of the project to which the building work relates;

(d) the impact on jobs of the project to which the building work relates; and

(e) whether the project to which the building work relates will contribute to skills growth.

26 Contracts

(8)  A funding entity must only enter into a contract in respect of Commonwealth funded building work with a code covered entity that only uses products in building work that comply with the relevant Australian standards published by, or on behalf of, Standards Australia.

Part 6 Application and transitional provisions

30 Transitional provisions relating to the Code for the Tendering and Performance of Building Work Amendment Instrument 2022—exemptions

(1) An exemption given by the ABC Commissioner under section 6A or 6B of this instrument and in effect immediately before the commencement of the Code for the Tendering and Performance of Building Work Amendment Instrument 2022 (the amending instrument) continues in effect, and may be dealt with, as if it were an exemption given by the Minister under section 6A or 6B (as the case may be) as in force after that commencement.

(2) If:

(a) before the commencement of the amending instrument, a building contractor or building industry participant makes an application under subsection 6B(1) to the ABC Commissioner; and

(b) at that commencement, the ABC Commissioner has not made a decision on the application;

 then, at and after that commencement, the Minister may deal with the application as if it had been made to the Minister under subsection 6B(1) as in force after that commencement.

31 Transitional provisions relating to the Code for the Tendering and Performance of Building Work Amendment Instrument 2022—exclusion sanctions

(1) This section applies to a code covered entity (the sanctioned entity) that was subject to an exclusion sanction immediately before the commencement of the Code for the Tendering and Performance of Building Work Amendment Instrument 2022 (the amending instrument).

(2) Despite the amendments made by the amending instrument, the exclusion sanction continues in force after that commencement (subject to paragraph 3(3)(a)) with the effects set out in subsections (3) to (5) of this section.

Effects of exclusion sanction

(3) Another code covered entity must not enter into an agreement in respect of building work with the sanctioned entity as a subcontractor, unless approval to do so is provided by the Minister.

Note: See paragraph 8(3)(a) of this instrument as in force before the commencement of the amending instrument.

(4) The sanctioned entity is not eligible to be awarded Commonwealth funded building work.

Note: See paragraph 23(1)(b) of this instrument as in force before the commencement of the amending instrument.

(5) A funding entity must not enter into a contract in respect of Commonwealth funded building work with the sanctioned entity.

Note:See subsection 26(1) of this instrument as in force before the commencement of the amending instrument.

Schedule 1 Building work to which code of practice applies

(subsection 6(3))

1 Building work that is being undertaken for, or on behalf of, a funding entity (irrespective of the value of a project).

2 Building work:

(a) 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

(b) for which:

(i) 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

(ii) 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).

3 Building work:

(a) for which the Commonwealth provides assistance in advance of the commencement of construction; and

(b) which has an identified capital component; and

(c) for which:

(i) 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

(ii) 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).

4 A Build, Own, Operate, Transfer (‘BOOT’) project initiated by an agency of the Commonwealth for the delivery of functions or services of the Commonwealth.

5 A Build, Own, Operate (‘BOO’) project initiated by an agency of the Commonwealth for the delivery of functions or services of the Commonwealth.

6 Building work that involves a pre-commitment lease to which a funding entity is a party.

7 Building work that involves a Public Private Partnership (‘PPP’) for the delivery of functions or services of the Commonwealth.

Note: a PPP involves 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. An agency of the Commonwealth 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.

8 Building work that involves a Private Finance Initiative (‘PFI’) for the delivery of functions or services of the Commonwealth.

Note: a PFI involves 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. An agency of the Commonwealth 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.

9  Building work (privately funded building work):

 (a) whose funding is not described in any of items 1 to 8; or

 (b) whose funding is described in any of those items, if it is building work to which item 10 applies.

10  This item applies to building work for which both of the following conditions are met:

 (a) the building work forms part of a project to support the operations of an intelligence or security agency;

 (b) a Minister, who administers the provision of the Act under which the agency exists or the Department that the agency forms part of, has determined in writing that disclosing the connection of the Commonwealth with the work or project would prejudice security.

Endnotes

Endnote 1—About the endnotes

The endnotes provide information about this compilation and the compiled law.

The following endnotes are included in every compilation:

Endnote 1—About the endnotes

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4—Amendment history

Abbreviation key—Endnote 2

The abbreviation key sets out abbreviations that may be used in the endnotes.

Legislation history and amendment history—Endnotes 3 and 4

Amending laws are annotated in the legislation history and amendment history.

The legislation history in endnote 3 provides information about each law that has amended (or will amend) the compiled law. The information includes commencement details for amending laws and details of any application, saving or transitional provisions that are not included in this compilation.

The amendment history in endnote 4 provides information about amendments at the provision (generally section or equivalent) level. It also includes information about any provision of the compiled law that has been repealed in accordance with a provision of the law.

Editorial changes

The Legislation Act 2003 authorises First Parliamentary Counsel to make editorial and presentational changes to a compiled law in preparing a compilation of the law for registration. The changes must not change the effect of the law. Editorial changes take effect from the compilation registration date.

If the compilation includes editorial changes, the endnotes include a brief outline of the changes in general terms. Full details of any changes can be obtained from the Office of Parliamentary Counsel.

Misdescribed amendments

A misdescribed amendment is an amendment that does not accurately describe how an amendment is to be made. If, despite the misdescription, the amendment can be given effect as intended, then the misdescribed amendment can be incorporated through an editorial change made under section 15V of the Legislation Act 2003.

If a misdescribed amendment cannot be given effect as intended, the amendment is not incorporated and “(md not incorp)” is added to the amendment history.

Endnote 2—Abbreviation key

Endnote 3—Legislation history

Endnote 4 –Amendment History