Return to Tender: Your guide to tendering for Victorian Government building and construction work
By Peter Micevski, Solicitor, Lovegrove Smith & Cotton
Construction firms seeking to tender for Victorian State projects need to consider how the Victorian Code of Practice for the Building and Construction Industry (“the Code”) and accompanying Guidelines affect their policies and practices.
The Code establishes the minimum standards of practice and behaviour that the Victorian Government expects of parties involved in public sphere construction.
In light of the devastating wall collapse in Melbourne that tragically killed three people in March 2013, the Victorian Government has heightened their expectations of construction industry participants regarding industrial relations and safety. The Government continues to vigilantly monitor and investigate compliance with the Victorian Code and Guidelines.
Nowadays tenderers for Victorian Government building and construction work, and privately-funded projects, won’t succeed if they fail to comply with the Code.
This article summarises some important consequences of the Code and Guidelines and the key implications for Victorian construction industry participants.
How does the Code and Guidelines impact Contractors?
The Code and Guidelines apply to all public building and construction work that is the subject of an expression of interest or request for tender.
Public building and construction work is defined by s 3 of the Project Development and Construction Management Act 1994, and includes any matter relating to the construction, maintenance, rehabilitation, alteration, extension or demolition of any improvements on land by, or on behalf of, departments or public bodies. This includes design and construction practices, tendering process, project delivery and contract administration.
Below are three of the most important consequences of the Code and Guidelines for contractors:
- Occupational Health & Safety
A tenderer must be able to demonstrate how they will be able to achieve the objectives of the Victorian Code and the Guidelines in relation to safety, including encouragement of best practice and promotion of the highest standards in the industry and application of relevant OH&S legislation, regulations and codes.
Amongst other things, a tenderer must:
- demonstrate that its senior managers are proactively involved in, committed to, achieving safety objectives and improving safety outcomes;
- submit a Health and Safety Management Plan;
- demonstrate a track record of delivering construction projects safely;
- detail how it intends to engage with other parties about safety on the project and resolve safety issues that arise; and
- demonstrate how it intends to improve OHS outcomes.
- Workplace Relations
A tenderer must, as part of any expression of interest or tender response, provide a Workplace Relations Management Plan (“the WRMP”) where the Victorian Government department or public sector body contribution to a project is $10 million or more or is at least $5 million and represents at least 50% of the total construction project value.
The WRMP must address specific issues including the following:
- labour requirements and the engagement of labour, including selection procedures;
- how workplace arrangements will be regulated (ie enterprise agreements);
- how disputes will be resolved; and
- an approach to developing and maintaining a productive workforce, ensuring the optimal use of labour requirements (eg an approach to managing inclement weather, RDOs).
The Construction Code Compliance Unit (“CCCU”) has developed a model WRMP to assist contractors with preparing their WRMP.
- Monitoring and Compliance
The CCCU undertakes monitoring and compliance work including site visits, site inspections and audits.
In particular, the CCCU is concerned with reviewing provisions in project contracts and tender documentation, reviewing industrial instruments such as enterprise agreements, investigating your current workplace compliance as well as the compliance of your related entities and subcontractors.
The CCCU has powers to issue sanctions against contractors who are not complying with the Code and/or Guidelines. These sanctions include:
- a formal warning;
- referral of the contractor to a relevant industry association or statutory body for assessment (eg the ASX);
- publication of the breach and the identity of the non-complying contractor; and
- exclusion of a non-compliant contractor from tendering for Victorian Government projects for a specified time.
The Code and Guidelines also set out standards in respect of legal and related obligations, cost, efficiency and productivity, project agreements, dispute settlement, industrial action and strike pay, freedom of association and right of entry.
What is known for now though is that failure to meet the required Code and Guidelines will lead to a failed bid. Further, if the Code and Guidelines are not met during building and construction work, this will expose a contractor to potential breaches of safety legislation and their contractual obligations with the Victorian Government.
For further information and advice about submitting a tender for building and construction work in Victoria, contact Peter Micevski on (03) 9600 1643.
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© Lovegrove Smith & Cotton 2014