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  • Writer's pictureJohn Lowry

The Comonwealth Building Code - What is it?

What is the Commonwealth Building Code? The Code is a legislative instrument created under section 34 of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth). The Code has applied to all new tenders and expressions of interest for Commonwealth funded building work since 2 December 2016. Transitional provisions apply for expressions of interest and tenders entered into under the previous Building Code 2013.

The meaning of "Building work" is defined by schedule 1 of the Code.

Once a contractor or building industry participant tenders for Commonwealth funded building work, it automatically becomes a "Code Covered Entity".

From then on, it must comply with the Code on all building work undertaken, including unrelated projects that are privately funded. A Code Covered Entity's related entities also become subject to the Code at the same time. A contractor or building industry participant cannot be awarded Commonwealth funded building work unless it complies with the Code.

The Code is enforced by the ABCC. If a Code Covered Entity fails to comply, the Minister for Employment may issue a formal warning or an exclusion sanction preventing the entity and its related entities from tendering for and being awarded Commonwealth funded work for up to one year.

Commonwealth agencies (Funding Entities), State agencies and State Owned Corporations participating in Joint Funding Agreements (Funding Recipients) must also comply with Code requirements across all stages of procurement and throughout the life of the project. These obligations include a requirement to request specific information from preferred tenderers regarding Australian-manufactured content of materials and contribution to Australian skills growth. Further information, resources and model clauses for Funding Entities and Recipients are available on the ABCC's website. Funding Entities and Recipients can also contact the ABCC Manager of Government Code Compliance, Cassie Woods, on (02) 6121 5528 or at to seek further assistance.

Security of Payment The Minister for Employment has described the Code as "probably the strongest security of payments law the building industry has ever seen". Contractors should be aware that the Code imposes additional Federal security of payment obligations and penalties on top of existing State and Territory laws. These new requirements include obligations to ensure that payments are made in a timely manner and not unreasonably withheld, to have and comply with a documented dispute settlement process that details how disputes about payments to sub-contractors will be resolved, and to report to the ABCC any progress claims/payments referred to adjudication (disputed payments) and any failures to pay amounts determined by an adjudicator (delayed payments). To make a report, contractors should use the Delayed or Disputed Progress Payment Reporting Form available on the ABCC's website and email this Form to

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