Construction contracts and conditions
The general conditions of contract approved and recommended for public construction in Victoria are specified in the Guide to Ministerial Direction No 2: Contractual provisions for public construction.
These conditions have been developed or adopted for Victorian public construction on the recommendation of the Construction Contracts Advisory Panel, based on the principles outlined in Ministerial Direction No 2.
General conditions of contract for public construction must provide for:
- the allocation of risk to the party best able to manage the risk
- prompt and fair entitlement to payment
- a requirement that the head contractor must provide the contract principal with proof of payment to subcontractors and suppliers
- a co-operative approach to dispute resolution to minimise adversarial action; and
- where applicable, a requirement to use standard subcontract conditions compatible with the head contract.
To reinforce the applicability of the Victorian Building and Construction Industry Security of Payment Act 2002 contracts recommended or approved for public construction must not include:
- “pay when paid” or “pay if paid” clauses in subcontracts; or
- the amendment of clauses relating to payment timing in standard subcontracts.
Forms of contract
The forms of contract specified in the Guide to Ministerial Direction No. 2 are suitable for construction contracting strategies such as:
- Major and minor construct only contracts
- Design and construct contracts
- Design only contracts
- Sub-contractor engagements
Special Conditions of Contract
Victorian Public Sector Special Conditions of contract for public construction projects have been developed by Building Policy and the Construction Contracts Advisory Panel to amend Australian Standard general conditions of contract.
Special Conditions are revised from time to time to reflect changes in Victorian Government policy and contracting practices.
Model Conditions of Tender for Construction
Model Conditions of Tender for Construction (Model Conditions) have been developed by Building Policy and the Construction Contracts Advisory Panel for use by departments and public bodies to create a tendering process where innovation can be embraced.
For more information about construction contracts, Special Conditions of contract and the Model Conditions of Tender contact Building Policy on Tel: (03) 9223 1824 or by email to building.policy@dpcd.vic.gov.au.