Security of payment reforms - implementation options

Submission cover sheet

  • Name of organisation or individual making this submission

    Contract Administration Group

  • Authorised delegate/contact person

    Tim Sullivan

  • Position

    Director, Adjudicator, Adjudicator Trainer

  • Organisation

    Contract Administration Group

Questions on possible options

  1. Please provide your comments on the options paper for the Security of Payment reforms

    Question 1 - The proposed start date is feasible. Question 2 - No reasons from our stance. Question 3 - The proposed start date is feasible. Consideration should be given to having the start date for amendments to sections 8 and 13 come into force in say 6 months rather than 3 months from February 2019 for claims made in relation to construction contracts entered into before date xxx/February 2019 . This could be particularly important in respect of large projects where issues are already simmering if not boiling over. A 3 month window may be attractive to claim banking with a mass of claims being made in June. Having to wait 6 months for present issues to be claimed under the amended Act may be less attractive. This would also align with the proposed start date for amendments relating to trust accounts. Question 4 - See response to Q3. Question 5 - The proposed start date is feasible. Question 6 - The Code of Practice should be implemented immediately with the first of the other amendments to take effect. Question 7 - No. Implementation of changes to only take effect in relation to construction from a certain date did not operate smoothly under the charges to Victorian SOPA. Implementation of changes to take effect in respect of all contracts removes the parallels systems which will inevitably cause problems. Consider - Head Contract entered into in January 2019 with some major subcontracts let much later and after the amendments to the Act come into effect. It is not difficult to envisage the problem. A deferred start may be in order for existing contracts but after the honeymoon period parties should have their house and finances in order. Many major contracts cater for effects of legislative changes that come into force after tender or after date of contract. Question 8 - See comments to question 7. Question 9 - See comments to question 7. Questions 10 to 18 - No comment at this stage. Questions 19 - 23 - Penalties have no impact unless there is an enforcement regime with sufficient troops and artillery available to the regulator. Unless Fair Trading is fair dinkum in using the penalty provisions it becomes like a repeated threat to a naughty child which is not followed through and therefore just ignored. Otherwise, I have no issues with the proposed penalties. Questions 25 - 25 - Yes to both. Questions 26 - 27 - No comment at this time. Regards Tim Sullivan

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