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Builders Prequalification Scheme

Contractors bidding for a construction contract likely to be $500,000 or more may need to be prequalified under the Builders Prequalification Scheme.

The scheme minimises the risk of the Department of Finance signing contracts with contractors that lack financial and technical capability and capacity.

The Department aims to:

• be an informed and responsible part of the industry
• have consistent, fair and transparent tenders and selections
• lower costs of tenders and assessments
• raise standards and continuously improve performance
• promote a sustainable building and construction industry in Western Australia

The scheme generally applies to contracts over $500,000 that:

• require a registered builder
• involve the construction, alteration or addition of a building.

The Builders Prequalification Scheme is meant for construct-only contracts. However, the Department may use it for other procurement and construction.

Prequalified contractors must apply for their prequalification to be renewed every three years and are monitored to ensure they continue to meet the minimum financial capacity requirement for prequalification during any procurement process.

Refer to Builders Prequalification Scheme to access related documents, including the Aboriginal and Regional Contractors Project Specific Upgrade Program or contact us at BuildersPrequalification@finance.wa.gov.au for further information.

Business Risk Assessments

Business Risk Assessments assess contractors’ financial viability and their capacity to fulfil the contract.

They may be contractors who want to:

• become prequalified
• continue prequalification
• bid for a Department of Finance contract.

Refer to Business Risk Assessment for Prequalification and Tender Evaluations to access related documents, including the Business Risk Assessment Calculator.

Tax obligations

As part of the prequalification and tendering process, contractors may be asked to give consent for RevenueWA to release information on any outstanding state tax obligations to the Department’s officers involved in the prequalification and tendering process. Where the contractor has an outstanding state tax obligation, the matter will be discussed with the contractor. If a contractor has an outstanding tax obligation, or it fails to provide consent for RevenueWA to share information, this may affect a builder’s prequalification standing, and the contractor may become ineligible to be awarded a contract.

Consultants are procured by the Department of Finance to help deliver the state government’s non-residential buildings program.

Consultants such as architects, engineers and cost consultants assist the Department to plan, design, deliver and maintain government building projects. The Department may procure services from consultants through panels or, depending on the expected commission value, through restricted or open tender processes. Where a consultant is being engaged through an open tender process, this opportunity will be advertised on Tenders WA.

The professional services consultancy panels are (click on the name of the panel to view the request document):

• Architectural Services 2018
• Art Coordination Services 2018
• Building Certification Services 2016
• Cost Management Services 2017
• Engineering and Building Specialists 2014
• Interior Fitout and Workplace Design Services 2020 (commences 1 January 2020)
• Leasing and Property Consultants 2018
• Occupational Safety and Health Consultancy Services 2014

The panels are reviewed from time to time to ensure they meet the Department’s requirements. When more consultants are needed, applications will generally be sought through the Tenders WA website.

Consultants are appointed to the panels based on evaluation criteria are set on a case by case basis and are included within the request document that is used to form the panel. Common criteria include:

• experience of the firm
• capabilities of key personnel
• past performance
• the way in which the consultant will deliver its services to meet the Department’s needs.

In some cases the Western Australian Industry Participation Strategy and the Buy Local Policy will also be relevant.

Each panel will describe the manner in which the consultant’s fees will be calculated for contracts placed under the panel. In general terms, fees are determined through a restricted quotation process (where one or more panel members are invited to submit a quote for a particular service) or with reference to a predetermined percentage fee scale or submitted hourly rates.

All of the Department’s panels have defined end dates. Most panels will remain open for up to five years, often with an initial term of two or three years, with options to extend.

The way in which panel members are engaged through the panel varies from panel to panel. In most cases the Department can directly approach one panel member and invite them to undertake the work. The Department may invite two or more panel members to submit quotations where the proposed contract is high value or high risk, or where taking such an approach will deliver value for money.

Being on the panel is not a guarantee of work. Go to Finding work with the Department of Finance or How to submit an offer to see how we distribute work, and how to improve your selection chances.

Suppliers with a history of insolvency or bankruptcy may not be eligible to work with the Department of Finance (Finance).

Unless otherwise approved by Finance, suppliers that have experienced (or suppliers with key personnel who have experienced) an insolvency or bankruptcy event within the last three years are not eligible to work with the Department of Finance. This includes any supplier:

• applying for prequalification, membership to a panel or other contractual framework, including the low value maintenance panel and the service alliance 2012 or
• submitting a quote, tender or an expression of interest.

This action is taken to minimise Finance’s business risk exposure and to discourage suppliers from engaging in phoenix activities that cause third parties to incur losses.

Finance may contact a supplier suspected of having an insolvency or bankruptcy event in its history (or that of its key personnel) to provide details such as the:

• particulars of the reported insolvency or bankruptcy event
• relationship between the supplier and the supplier that suffered the insolvency or bankruptcy event
• issues that caused the insolvency or bankruptcy and how each one has been addressed
• extent to which creditors have been paid amounts owing
• extent to which employees and employee-related entitlements have been satisfied.

Definitions

A bankruptcy event includes where the supplier, director or key person:

• is the subject of a bankruptcy petition
• is made bankrupt
• has had a deed of assignment or deed of arrangement made, accepted a composition, been required to present a debtor’s petition or had a sequestration order made under Part X of the Bankruptcy Act 1996 (Cth).

An insolvency event includes where:

• a supplier has stated that it is unable to pay its debts when they fall due
• a supplier has had an execution levied against it by a creditor
• notice is given of a meeting of creditors with a view to the supplier entering a deed of company arrangement
• the supplier enters a deed of company arrangement with creditors
• an external controller or an external administrator is appointed
• an application is made to a court for the supplier’s winding up
• a winding up order is made for the supplier
• the supplier resolves by special resolution that it be wound up voluntarily (other than a member’s voluntary winding up)
• a mortgagee of any of the supplier’s property takes possession of that property.

Key personnel within an organisation may be defined as a natural person who is:

• a beneficial owner or majority shareholder
• an office holder such as a Director or Company Secretary
• a partner or trustee
• a decision-maker who has a role such that by conduct, it is fair to assume they represent the organisation and/or entity. Some of these decisions may relate to financial, design, procurement and/or construction.

Finance reserves the right to determine at any time and in its sole discretion whether a person meets the definition of a Key Personnel within an organisation and/or entity.