The following information is provided to advise of the introduction and applicability of Project Bank Accounts for building work which may include survey related work.
In 2017, the Queensland Government introduced a suite of reforms to the building and construction industry through the Building Industry Fairness (Security of Payment) Act 2017 (the BIF Act). As part of these reforms, Project Bank Accounts (PBAs) were introduced to safeguard progress payments, protect retention monies and allow for more timely payments to subcontractors.
Which projects require a Project Bank Account?
For Phase 1, which commenced on 1 March 2018, PBAs will apply to contractors and consultants where:
- the Queensland Government is the Principal under the contract;
- the contract value is between $1 million and $10 million (incl. GST);
- at least one subconsultant is engaged under the head contract; AND
- more than 50% of the contract price is for ‘building work’ (see details of ‘building work’ below).
Building work under the BIF Act (s8) includes:
- the preparation of plans or specifications for the performance of building work;
- work performed by architects, engineers, and surveyors to the extent the work relates to other building work;
- contract administration carried out in relation to the construction of a building designed by a person; and
- any site work related to building work (as defined under the Act).
If a consultancy contract meets these requirements, the consultant will be required to establish a PBA and meet all the obligations of a head contractor under Chapter 2 – Project Bank Accounts – of the BIF Act.
Building Work – Exclusion
Please note: civil, engineering and infrastructure projects such as bridges, roads and tunnels and public transport infrastructure (such as busways, roads, and railways) are not ‘building work’ for PBA purposes. (Therefore, the PBA requirements also do not apply to architectural, engineering, design, planning or site work associated with these construction activities).
What is a Project Bank Account?
A PBA is a set of three trust accounts where funds are held in trust until payments are due. If a PBA is required for a consultancy contract, all subconsultants engaged MUST be paid only from the PBA. The consultant and subconsultants are beneficiaries of the three trust accounts and, in events such as insolvency, the PBA accounts secure the progress payments, amounts in dispute and retention monies until they are due to be paid out.
The Department of Housing and Public Works is implementing PBAs throughout Queensland. In Phase 1, contracts with Queensland Government departments could require a PBA to be set up if several further criteria or thresholds are met. In Phase 2, expected to commence in 2019, all contracts over $1 million (including consultancy contracts) with local governments, statutory bodies, and the private sector will also be included.
The Department of Housing and Public Works is currently providing information sessions to head contractors and consultants (architects, engineers, surveyors, project managers) in urban and regional areas. The Department has offered to provide a tailored information session for surveyors.
If you would like to attend an information session please email the Board office email@example.com.