Mr BALDWIN - 1996-11-27
I understand that Cabinet recently approved changes to the contractor accreditation scheme, and also the requirements for quality assurance. Could the minister explain the details of the changes that have been approved?
ANSWER
Mr Speaker, Cabinet approved changes to the operation of the contractor accreditation scheme in response to feedback that the government received from the private sector, and also from an information review that has been undertaken of the first year's operation of the scheme in order to ease the burden on small contractors operating in the Northern Territory. For those members who are not familiar with the scheme, I will outline it quickly.
Contractor Accreditation Ltd (CAL) is a private sector company sponsored by the Territory Construction Association, the Northern Territory Chamber of Commerce and Industry and the Northern Territory Small Business Association. It is administered by a board of directors which includes equal representation of the sponsoring entities and an independent chairman, at this time Mr George Cridland. Daily operations of CAL are managed by a full-time registrar who is appointed by the board. CAL was formed by the private sector to provide a system of accreditation of contractors in the building construction, project management, civil works and service industries. It is unique in Australia and it provides the basis for industry self-assessment with a view to engendering the confidence of local civil construction and service industries.
For its part, the Northern Territory government, when inviting tenders for public works and services, now deals only with contractors who are accredited and rated by CAL at least to the level specified in the tender. A code of practice to which accredited contractors must adhere, to obtain or retain accreditation, further protects subcontractors. The code requires full and timely payment to subcontractors and suppliers by principal contractors. This has been a source of concern previously to government and industry generally. Contractors who do not wish to work for the Northern Territory government are not required to ...
Mr COULTER: A point of order, Mr Speaker! The honourable minister was clearly asked for the details of changes.
Mr SPEAKER: There is no point of order, but I ask the minister to get on with answering the question.
Mr POOLE: Mr Speaker, CAL expects that individual private sector clients are likely to take an increasing interest in the credentials of the industry as the initiatives become better known, and this is proving to be the case. CAL assesses applicants with respect to technical capacity, management capacity, financial capacity, past performance, local factors and the code of practice. Each of these assessments is made by a panel of appropriately qualified and experienced industry members. To ensure impartiality, individual applicants are advised of the
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membership of their particular assessment panel and may ask for members to be replaced should they wish.
CAL accreditation has been available to contractors in the building construction category since May 1995 and the building services and civil works categories since August 1995. As requested by my colleagues this morning, I am happy to pass on this information that they are desperately waiting on. CAL accreditation has been applied to tender evaluation in the building construction industry category since 1 November 1995 and the building services and civil works categories since 1 January 1996.
As of today, a total of 584 applications have been received for accreditation. CAL reduced its fees and charges by 20% from July this year, following the gaining of 12 months operational experience, coupled with the number of fully-accredited contractors. Cost to contractors will now be further eased by a simultaneous rationalisation from 115 to 59 of CAL categories for which they need to apply. CAL accreditation is generally accepted and has attracted the interest of other jurisdictions throughout Australia. As advised, Cabinet has recently approved adjusting from $10 000 to $30 000 the thresholds at which government agencies apply the requirements for works and service providers to be CAL-accredited. Following recent consultations, the CAL board of directors is considering fees and charges of around $100 for renewal of accreditation in a single category to $50 000. The board is also looking to simplify its renewal of documentation, including certification by an applicant's own
accountant. These measures should ease the burden on small contractors.
On a related issue, Cabinet also approved changes to the requirement for quality assurance (QA). In order to ensure that this policy is adhered to in a persistent manner, QA procedures will not be applied to projects valued at less than $50 000 unless the Procurement Review Board determines the project to be high risk. QA procedures will continue to be applied to all projects valued at greater than $50 000, but on the basis of the project being determined as low, medium or high risk by the Procurement Review Board. While major contractors have generally embraced the concept of QA systems, many small contractors have struggled, with some spending unnecessary time and expense on superfluous systems and certifications. The rationalisations will ensure QA requirements for a simple, routine job, regardless of value, whereby requirements for a complete project could be full third-party certification.
Mr Ah Kit interjecting.
Mr POOLE: The small contractors are affected most. I know you are not interested, Jack.
Mr Ah Kit: I am interested, but this should be a ministerial statement.
Mr SPEAKER: Order!
Mr POOLE: Mr Speaker, I know the honourable member for Arnhem is not particularly interested in this answer, but I am sure the building industry in the Northern Territory is.
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The small contractors, which deliver projects valued at less than $50 000, are affected most. This group represents about 70% of total contracts let by the Department of Transport and Works, and the vast majority of these contracts are for simple, repetitive work of low risk. The government remains committed to QA and, in recent times, Territory taxpayers have benefited from its application. The rationalisation will be welcomed by small contractors and the large number of contractors who have invested in and implemented QA systems will appreciate the clarification.
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ANSWER
Mr Speaker, Cabinet approved changes to the operation of the contractor accreditation scheme in response to feedback that the government received from the private sector, and also from an information review that has been undertaken of the first year's operation of the scheme in order to ease the burden on small contractors operating in the Northern Territory. For those members who are not familiar with the scheme, I will outline it quickly.
Contractor Accreditation Ltd (CAL) is a private sector company sponsored by the Territory Construction Association, the Northern Territory Chamber of Commerce and Industry and the Northern Territory Small Business Association. It is administered by a board of directors which includes equal representation of the sponsoring entities and an independent chairman, at this time Mr George Cridland. Daily operations of CAL are managed by a full-time registrar who is appointed by the board. CAL was formed by the private sector to provide a system of accreditation of contractors in the building construction, project management, civil works and service industries. It is unique in Australia and it provides the basis for industry self-assessment with a view to engendering the confidence of local civil construction and service industries.
For its part, the Northern Territory government, when inviting tenders for public works and services, now deals only with contractors who are accredited and rated by CAL at least to the level specified in the tender. A code of practice to which accredited contractors must adhere, to obtain or retain accreditation, further protects subcontractors. The code requires full and timely payment to subcontractors and suppliers by principal contractors. This has been a source of concern previously to government and industry generally. Contractors who do not wish to work for the Northern Territory government are not required to ...
Mr COULTER: A point of order, Mr Speaker! The honourable minister was clearly asked for the details of changes.
Mr SPEAKER: There is no point of order, but I ask the minister to get on with answering the question.
Mr POOLE: Mr Speaker, CAL expects that individual private sector clients are likely to take an increasing interest in the credentials of the industry as the initiatives become better known, and this is proving to be the case. CAL assesses applicants with respect to technical capacity, management capacity, financial capacity, past performance, local factors and the code of practice. Each of these assessments is made by a panel of appropriately qualified and experienced industry members. To ensure impartiality, individual applicants are advised of the
Page 1845
membership of their particular assessment panel and may ask for members to be replaced should they wish.
CAL accreditation has been available to contractors in the building construction category since May 1995 and the building services and civil works categories since August 1995. As requested by my colleagues this morning, I am happy to pass on this information that they are desperately waiting on. CAL accreditation has been applied to tender evaluation in the building construction industry category since 1 November 1995 and the building services and civil works categories since 1 January 1996.
As of today, a total of 584 applications have been received for accreditation. CAL reduced its fees and charges by 20% from July this year, following the gaining of 12 months operational experience, coupled with the number of fully-accredited contractors. Cost to contractors will now be further eased by a simultaneous rationalisation from 115 to 59 of CAL categories for which they need to apply. CAL accreditation is generally accepted and has attracted the interest of other jurisdictions throughout Australia. As advised, Cabinet has recently approved adjusting from $10 000 to $30 000 the thresholds at which government agencies apply the requirements for works and service providers to be CAL-accredited. Following recent consultations, the CAL board of directors is considering fees and charges of around $100 for renewal of accreditation in a single category to $50 000. The board is also looking to simplify its renewal of documentation, including certification by an applicant's own
accountant. These measures should ease the burden on small contractors.
On a related issue, Cabinet also approved changes to the requirement for quality assurance (QA). In order to ensure that this policy is adhered to in a persistent manner, QA procedures will not be applied to projects valued at less than $50 000 unless the Procurement Review Board determines the project to be high risk. QA procedures will continue to be applied to all projects valued at greater than $50 000, but on the basis of the project being determined as low, medium or high risk by the Procurement Review Board. While major contractors have generally embraced the concept of QA systems, many small contractors have struggled, with some spending unnecessary time and expense on superfluous systems and certifications. The rationalisations will ensure QA requirements for a simple, routine job, regardless of value, whereby requirements for a complete project could be full third-party certification.
Mr Ah Kit interjecting.
Mr POOLE: The small contractors are affected most. I know you are not interested, Jack.
Mr Ah Kit: I am interested, but this should be a ministerial statement.
Mr SPEAKER: Order!
Mr POOLE: Mr Speaker, I know the honourable member for Arnhem is not particularly interested in this answer, but I am sure the building industry in the Northern Territory is.
Page 1846
The small contractors, which deliver projects valued at less than $50 000, are affected most. This group represents about 70% of total contracts let by the Department of Transport and Works, and the vast majority of these contracts are for simple, repetitive work of low risk. The government remains committed to QA and, in recent times, Territory taxpayers have benefited from its application. The rationalisation will be welcomed by small contractors and the large number of contractors who have invested in and implemented QA systems will appreciate the clarification.
Page 1847
Last updated: 09 Aug 2016