Major changes to the Building Code 2016 now in force

This article is co-authored with Jonathan McMillan.

The Code for the Tendering and Performance of Building Work 2016 (Code) has been significantly amended by the Code for the Tendering and Performance of Building Work Amendment Instrument 2022 (Amendment), which came into effect on 26 July 2022.

Key takeaways

The Amendment has removed the majority of the substantive requirements from the Code. This has a significant impact on funding and procuring entities and tenderers (including tenderer subcontractors) in the procurement and delivery of Commonwealth funded building work. Tender documents and contracts will need to be revised to reflect the reduced requirements.

What has been removed?

A number of substantive tendering and building work provisions in the Code have been removed including, but not limited to, the following:

• Eligibility requirements for those seeking to be awarded Commonwealth funded building work, including the requirement to submit a letter of compliance to the Australian Building and Construction Commission’s (ABCC);
• Requirement for an approved Workplace Relations Management Plan;
• Restrictions on the content of enterprise agreements applying to Code covered entities;
• Clauses relating to sham contracting, collusive tendering practices and conduct relating to above-entitlement payments;
• Clauses relating to security of payment, freedom of association, right of entry to premises and industrial action;
• Clauses relating to fitness for work and drug and alcohol testing;
• Requirement for tenderers to provide certain information in tenders and expressions of interest;
• The ABCC’s powers under Part 4 of the Code in relation to compliance, monitoring and enforcement; and
• Notification requirements to the ABCC when a tender process is completed, and where there have been alleged breaches of the Code.

What remains

The following provisions will continue to remain in effect:

• The mechanism by which building contractors and building industry participants (and their related entities) become Code covered entities;
• Exemptions for essential service providers and essential services infrastructure, although the exemptions will now be considered and granted by the Minister rather than the ABCC Commissioner;
• Obligations to undertake labour market testing prior to engagement of non-citizens or non-permanent residents;
• Obligations on funding entities to ensure preferred tenderers provide information relating to domestically sourced and manufactured building materials, compliance with relevant Australian Standards, whole-of-life costs and impacts on jobs and skills growth in respect of Commonwealth funded building work prior to contracting; and
• Funding Entities 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.

If you have any questions about drafting or how your project’s tender, procurement or contract finalisation process might be affected, please contact our team.