New procurement Guidelines for all NSW infrastructure projects will come into effect on 1 July 2013. Changes to the existing guidelines were driven by the Hon. Mike Baird (NSW Treasurer and Minister for Industrial Relations) who has stated that he was responding to pressure to maintain consistency with Victoria and Queensland.

All construction companies who tender, or are planning to tender, for NSW Government infrastructure projects will be affected by these new Guidelines. The Guidelines will impact on every part of the tender process, including the implementation of various industrial relations standards and enterprise agreements.

Here is what you need to know about the new NSW Guidelines:

  • They will apply to privately funded construction companies
  • Construction companies will need to demonstrate their past compliance with all applicable legislation and industrial elements
  • Construction companies will need to demonstrate compliance and best practice with regards to any relevant safety laws, including the submission of a Work Health and Safety Management Plan or Site Specific Management Plan
  • Construction companies must not enter into any formal arrangements that restrict the efficient performance of work, including arrangements that contain provisions that restrict productivity improvement
  • Construction companies must commit to follow the correct procedures and taking the right steps to bring any unprotected industrial action to an end (including taking legal action where possible and necessary)
  • They prohibit any form of “sham” contracting
  • They have been designed to stop and prohibit any arrangements that avoid compliance with legislation and court orders, undermine the freedom of association obligations, avoid strike pay, relax the right of entry requirements and any that are contrary to the objectives stated in the Guidelines
  • They prohibit the use of coercion and pressure tactics to make over-award payments

The NSW Government’s new construction Guidelines will place a number of restrictions on the content of enterprise agreements, which extend what is necessary and required by the law. In a nutshell, it means more work for construction companies going for tender. Even if the enterprise agreement complies with the Commonwealth Building Code 2013 and the Fair Work Act, it may still not meet the requirements detailed in the new Guidelines.

A Construction Compliance Unit will be established by the Government, whose role it will be to monitor and ensure compliance with the Guidelines. The unit will also investigate and then report any breaches of the Guidelines, and consequently refer those matters to the relevant authorities who have the power to impose sanctions.

Construction companies going for tender from 1 July 2013 will need to ensure they are fully compliant with the new Guidelines. Compliance is also going to be expected with respect to privately funded projects. The NSW Government has stated that they are in the process of developing materials and programs that will assist construction companies comply with the Guidelines; however legal advice is still recommended to ensure there are no breaches, as there a number of very strict requirements.

Finally, construction companies should note that compliance with the NSW Guidelines does not automatically occur by virtue of their compliance with the National Code of Practice for the Construction Industry and its Implementation Guidelines. This has now been replaced by the Building Code 2013. The NSW Government has stated that the Building Code 2013 will not impede or impact construction companies when it comes to them complying with the new NSW Guidelines.