Construction industry procurement

In NSW, construction industry procurements work a little differently to others. We outline some of the key differences.
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What you need to know
  1. Construction contracts work a little differently to goods and services contracts.
  2. As a buyer, you have a different accreditation scheme and different contract limits.
  3. Covered procurements involving construction contracts have further requirements still.
  4. You also have more obligations when it comes to reporting on WHS, industrial relations, environmental management and other factors.

Why is construction different?

Construction industry procurement works a little differently to other procurements. That’s only natural when you consider the contract values are often higher, the margin for error lower and the number of suppliers on any one project often greater.

For this reason, there are often different rules that apply to construction procurement.

Construction accreditation

Construction procurement has its own accreditation scheme, which operates independently of the goods and services accreditation program.

Under the scheme, you can be accredited or partially accredited. This impacts the maximum value of any construction contract you can procure without additional support.

The construction accreditation scheme is under review so you can’t apply to become accredited right now.

If you’re already accredited, you must adhere to the Accreditation Scheme Guidelines.

View the Agency Accreditation Scheme for Construction Guidelines (for accreditations granted pre 2015).

View the  Accreditation Scheme for Procurement  PDF, 885.22 KB(for accreditations granted 2015 onwards).

See a list of all currently accredited agencies DOCX, 119.49 KB.

How to buy for construction projects

Generally, how you buy for construction projects depends on your level of accreditation.

If you’re unaccredited, you can run projects valued up to $1.3 million (excluding GST) without outside help. Above this amount, you must get independent support and use certain contracts.

Partially-accredited agencies have higher contracts limits for low and medium risk procurements. Fully accredited agencies have no limit on the value of goods and services they can procure.

Read more about the contract value limits for construction contracts

Covered procurements

If your contract is over a certain threshold it may be subject to Australia’s trade agreements as a ‘covered procurement’. The current threshold for construction procurements is $9.247 million (excluding GST).

Covered procurements are subject to the rules contained in PBD-2019-05 Enforceable Procurement Provisions. These impact how you procure.

Find out more about covered procurements.

Reporting requirements

Construction contracts often come with reporting requirements when it comes to:

  • Aboriginal participation
  • apprentices
  • WHS
  • environmental management
  • quality management
  • industrial relations.

Read more about your other obligations for construction contracts