Construct NSW

New South Wales
Government
Construct
New South Wales
New South Wales Government White Paper
Seizing opportunities to build a better construction industry
July 1998
Construct
New South Wales
Seizing opportunities to build a better construction industry
July 1998
Construct New South Wales

ISBN 03130733X
DPWS Report No. 98022
July 1998
Copies of Construct New South Wales are available
from the Construction Policy Steering Committee by
telephoning (02) 9372 8852 or alternatively faxing
(02) 9372 8851. Construct New South Wales will also
be available on the Construction Policy Steering Committee’s
web site http://www.cpsc.nsw.gov.au from August 1998.
Alternatively, you may write to the
Construction Policy Steering Committee
Level 23, McKell Building
2–24 Rawson Place
Sydney NSW 2000
Cover printed on 100% oxygen-bleached

(elemental chlorine free) paper. Paper for the inside
pages is 100% recycled and Australian-made.
Printed with vegetable-based mineral-oil-free inks.
NSW Government White Paper

Contents
Foreword 7
Acknowledgements 9
Introduction 10
Part 1 Strategic vision for the construction industry

Current profile of the construction industry 15
Future demand 17
What a responsive construction industry will look like 19
Seamless industry 20
Efficient and profitable industry 24
Innovative industry 26
Environmentally responsible industry 29
Part 2 NSW Government actions
Strategic information for decision making

Strategy 1 Strategic information to assist business development 32
Actions 1 Improve the accessibility of industry activity projections
2 Develop key performance indicators
3 Improve industry decision making related to projects
4 Identify enterprise improvement support programs
Business ethics and practices

Strategy 2 Wider adoption of the NSW Government Code of Practice 34
for the Construction Industry
Actions 5 Promote the benefits of NSW Code of Practice to private sector clients
6 Develop a process for review of contractor performance on
non-government projects
7 Improving DPWS performance as a client
8 Support national exchange of information on contractors’ compliance
with the Code of Practice
9 Improve contractor and subcontractor understanding of
doing business with government
10 Monitor movements in prices for materials
Strategy 3 Reducing the cost of doing business 36
Actions 11 Introduce innovative business practices
12 Pilot prepayment on government projects
13 Co-ordinate prequalification panels
14 Co-ordinate accreditation

Security of payment
Strategy 4 NSW Government construction projects will establish the 37
standards for industry in payments due to contractors,
subcontractors, consultants and suppliers
Actions 15 Improve NSW Government contractual requirements
16 Improve industry awareness of NSW Government
security of payment initiatives
17 Upgrade Statutory Declarations
18 Expand contractor and consultant prequalification
19 Allocate preference for prequalified contractors and consultants
20 Establish a common financial assessment arrangement for use by
NSW Government agencies
Strategy 5 The NSW Government will expand the available legislative 39
provisions to afford greater protection and access to remedies
Actions 21 The Oaths Act strengthened
22 The Contractors Debts Act modernised
23 Promote awareness of obligations in the Industrial Relations Act
24 Options for dealing with ‘phoenix’ companies
Strategy 6 The NSW Government will encourage and support industry-based 41
cost-effective security of payment strategies which do not require
direct Government intervention
Actions 25 Support industry-based schemes
26 Maintain continuous improvement
27 Require nomination of major subcontractors, consultants and suppliers
under the NSW Government’s C21 Contract
Management and workforce development

Strategy 7 Increase investment in training 42
Actions 28 A new policy for training on government construction projects
29 Promote training plans for private-sector projects
30 Require training facilities on selected government construction projects
Strategy 8 Improve access to training 43
Actions 31 Publish the NSW Construction Industry Training Resource Directory
32 Increase awareness and access to group training companies
33 Expand the workforce through structured entry-level opportunities
34 Expand skills of the current workforce
35 Enhance the skills of workers re-entering the construction industry
Strategy 9 Integrate training and skill formation into enterprise development 45
Actions 36 Support small and medium size enterprise business development
37 Improve pathways for career development
38 Widen construction industry education—workplace skills assessment
and portability
39 Effective application of skill formation in the construction industry

Strategy 10 Improve workforce diversity 46
Actions 40 Require workplace mentoring
41 Create and extend opportunities for Aboriginal and
Torres Strait Islanders
42 Raise support for women in construction
Strategy 11 Develop a long-term focus for training and identify the construction 47
industry’s future workforce development needs
Actions 43 Convene a forum on workforce development
Continuous improvement
Strategy 12 Encourage process improvement 48
Actions 44 Involve contractors in buildability reviews
45 Improved quality of construction contract documentation
46 Extending consistent agency practices in dealings with the
construction industry
Strategy 13 Mainstreaming industrial relations in project management 49
Actions 47 Identification of strategic workplace issues
48 Include industrial relations performance in contractor prequalification
49 Require tenderers to supply project-specific Industrial Relations Plans
50 Report on contractor industrial relations performance
51 Project Agreement guidelines
Strategy 14 Encouraging workplace reform 50
Actions 52 Encourage small and medium enterprises to implement workplace
reform initiatives
53 Develop best practice case studies
Strategy 15 Creating a safe working environment through continuous 51
improvement in Occupational Health Safety and Rehabilitation
Actions 54 Emphasise OHS&R training on government construction projects
55 Require construction industry OHS&R induction training
56 WorkCover Construction Industry Consultative Committee
57 WorkCover to develop Year 2000 Best Practice program
58 WorkCover to undertake construction industry research
59 WorkCover to streamline Occupational Health and Safety regulations
60 WorkCover to extend application of OHS&R management systems
by regulation
61 Accelerate OHS&R management system audits for government
construction projects
62 Audit OHS&R management system performance by contractors
on non-government projects
63 Extend the scope of the OHS&R Management System for government
64 Extend the application of OHS&R management for government

Toward an ecologically sustainable industry
Strategy 16 Mainstreaming ESD in the construction industry 54
Actions 65 Making Ecologically Sustainable Development (ESD) meaningful
to the construction industry
66 Establish environmental best practice on government projects
67 Require Environmental Management System (EMS) accreditation of
contractors on government projects
68 Audit Environmental Management Plans on government projects
69 Require reporting on environmental performance on government
projects
70 Publish waste minimisation strategies for government
71 Pilot recycling and reuse on government construction projects
72 Support effective use of scarce resources
Encouragement and recognition

Strategy 17 Encourage outstanding performance 57
Actions 73 Best practice framework for contractor and consultant selection
74 Access to Department of Public Works and Services projects
75 Encouragement for best practice accreditation by contractors
76 Adopt the C21 Contract for all Department of Public Works and
Services best practice contractors
77 Extend the best practice requirements
78 Introduce a best practice scheme for consultants
Strategy 18 Rewards for outstanding performance 59
Actions 79 Increased business opportunities for outstanding performers
80 Pursue a nationally co-ordinated reward and incentive regime
81 Recognise excellence on NSW Government projects
Strategy 19 Recognition of the contribution of small and medium enterprises 60
Actions 82 Emphasise encouragement to small and medium enterprises
Information technology
Strategy 20 Support for industry take-up of advanced technologies 61
Actions 83 Introduce an information management strategy
84 Construction Policy Steering Committee to monitor information
management initiatives
85 Support the Construct IT program for the construction industry
Actions: contribution to industry development (matrix) 62

Glossary 68
Contributors to the White Paper 69
Construction Policy Steering Committee agencies 73
Statutory Declaration 74
Case Study: Liverpool Hospital Redevelopment Project 76
Case Study: Waste minimisation trial results 79
References 80
Foreword
Construct New South Wales represents a framework for strengthening the

capability of the construction industry in this State. The New South Wales
Government will continue to work closely with industry to ensure the
development of a more competitive, innovative, productive and safe
industry.
The Government will also continue to support and work with industry to
develop appropriate security of payment initiatives which aim to address
the cause of the problem, not only the effects.
Construct New South Wales was developed following extensive consultation
on the range of issues canvassed in the two NSW Government Green Papers
The Construction Industry in New South Wales, Opportunities and Challenges
and Security of Payment for Subcontractors, Consultants and Suppliers in the
New South Wales Construction Industry released in October 1996, and the
discussion paper A Perspective of the Construction Industry in NSW in 2005
released in April 1997.
Construct New South Wales is complemented by the Government’s
discussion paper Information Technology in Construction—Making IT Happen,
April 1998 which provides a detailed strategy for improving communication
in the industry through the use of information technology.
The New South Wales Government’s goals for the industry have been
adopted nationally by all construction ministers in Construct Australia.
Construct New South Wales provides the detailed framework to achieve these
goals in New South Wales.
The release of Construct New South Wales affirms NSW Government
commitment of support to key industries in the State to achieve
their potential and maximise their contribution to the growth of an
internationally competitive industry. At the same time, Construct New
South Wales calls for commitment by the industry to building a better
industry, one which has strongly connected partnerships—clients and
their advisers, contractors, subcontractors, consultants, suppliers and
employees—all working together to deliver a better built environment.
(continued next page)
Construct New South Wales 7

A clear understanding of future directions can move the industry forward
and help manage its growth and development. It will help move the
industry from simply dealing with the present, to plan strategically to meet
the future needs of clients, managers, workforce and others in the industry,
and to make a positive impact, short and long-term, on other sectors of the
economy.
Construct New South Wales calls for continuous improvement and
innovation in the way things are done by the industry and at enterprise
level. Achievement of the objectives set out in Construct New South Wales
will mean a more robust construction sector that can deliver better
outcomes for the whole economy through the infrastructure needed
to provide a better society for all citizens.
THE HON. RON DYER MLC

Minister for Public Works and Services
8 NSW Government White Paper

Acknowledgements
Construct New South Wales was developed following extensive

consultation with construction industry contractors, subcontractors,
consultants, suppliers, unions, employer and industry associations,
as well as members of the finance sector and the academic community.
The paper was developed by the Construction Policy Steering
Committee (CPSC) which has ongoing responsibility for the
Government’s development program for the construction industry
in New South Wales.
The CPSC membership includes representation of:

• The Cabinet Office
• Department of Housing
• Department of Industrial Relations
• Department of Public Works and Services (chair)
• Olympic Coordination Authority
• Pacific Power
• Rail Access Corporation
• Rail Services Australia
• Roads and Traffic Authority
• Sydney Water Corporation, and
• Treasury.
Input was also provided by the Environment Protection Authority, the

Department of Education and Training, the Department of State and
Regional Development and WorkCover New South Wales.

Introduction
18 000
NSW
14 000
$ millions
VIC
QLD
10 000
6 000
1990 1995 2000 2005
years
Projected construction industry activity1
Construction industry activity

In the years ahead, the construction industry will be presented with
significant opportunities and many challenges. Industry activity in
New South Wales is projected to be sustained at the current high levels
in excess of $15 billion annually through to 2005. During this period
it is anticipated the peak will be $17.9 billion in 1999. This is some
$2 billion above the peak experienced in 1990. The projections include
the impact of the Asian economic crisis and reflect longer term
investment confidence in NSW.
The timing and level of these projections are consistent with historic
trends, and the increasing peak trend is consistent with expected
overall economic growth. These industry activity levels create both
opportunities and challenges for everyone associated with the industry.
The NSW Government is providing leadership in industry development
through its ongoing capital investment expenditure of $5–6 billion
each year. This represents a baseline component of industry activity
that is providing and maintaining the delivery of essential government
and community services.
Construct New South Wales indicates how the NSW Government will
facilitate development by providing leadership in policy reform, as
well as using its position as the major client of the industry. However,
improved productivity and efficiency, providing a safe workplace
environment and having a better skilled workforce can only be realised
if the industry takes up the challenge to lift its performance.
1
Graph data source: National Institute of Economic and Industry Research,
$ based on ABS price index, 1989/90

How the framework was developed
The paper was prepared following an extensive consultation process to
obtain industry stakeholder feedback on the range of issues canvassed
in the two NSW Government Green Papers The Construction Industry in
New South Wales, Opportunities and Challenges and Security of Payment for
Subcontractors, Consultants and Suppliers in the New South Wales Construction
Industry released in October 1996 and the discussion paper A Perspective
of the Construction Industry in NSW in 2005 released in April 1997.
The Green Paper Opportunities and Challenges dealt with a range of
issues, including the level of industry activity, industry structure and
relationships, training and skill formation, workplace issues, and
industry process improvement. The Green Paper Security of Payment
outlined the Government’s initiatives, management options, benefits
versus costs, and roles and responsibilities. The discussion paper
A Perspective of the Construction Industry in New South Wales in 2005
provided a view of the industry as it could be in the year 2005 from the
standpoint of the NSW Government as a primary driver of economic
and social development, and as a major client of the industry.
The papers sought industry input on proposed management options
to improve:
• industry business practices eg. relationships,
standards of behaviour, security of payment
• industry capacity eg. availability of resources, and
• industry efficiency eg. flexibility of the workforce,
workplace issues, process improvement and
environmental performance.
Overall, one hundred and twenty-three written submissions covering
the Green Papers were received from industry and New South Wales
government agencies. The responses indicated a high level of support
for the management options canvassed in the papers.
A series of focus groups, workshops and seminars were held following
receipt of the written submissions. The consultations involved people
drawn from government agencies, contractors, subcontractors,
consultants, suppliers, finance sector, employer and employees
associations, and academic institutions.
The discussion paper A Perspective of the Construction Industry in NSW
in 2005 generated considerable interest not only in NSW but also in all
states and territories in Australia. This led to an industry forum hosted
by the NSW Department of Public Works and Services and the
Australian Procurement and Construction Council in May 1997.

The forum was attended by representatives of government and industry
interests from across Australia. The NSW vision was endorsed as being
nationally relevant and adopted by the Commonwealth and all State
and Territory Governments as a framework for national industry
development.
The framework—Integrated Development Program

The Government is keen to see the industry develop into an industry
that is internationally competitive and capable of competing in the
expanding global market. The industry must therefore be seen as a
performance leader in all aspects of the way it does business.
This framework has two key aspects:
• Part 1—Strategic vision for the construction industry outlines a vision
for the industry which will equip it to meet the challenges and to
take advantage of the opportunities which will be presented in the
next seven years.
The vision was developed with industry and is included in Construct
New South Wales for consideration by individual industry enterprises
and industry stakeholders. The vision is outlined in the form of
characteristics to which all industry participants can relate.
Ultimately, adoption of the vision is up to individual participants
as is the ongoing development of the industry.
While the New South Wales Government is providing the leadership
to facilitate development of the industry, it is up to the industry to
make the changes required so that it can meet the challenges that it
faces now and in the future.
• Part 2—NSW Government actions provides a set of integrated actions,
to be implemented on a whole-of-government basis, that are
designed to assist the industry achieve its potential.
In summary, to assist the industry to seize the opportunities available
over the coming years the New South Wales Government will, through
its own buying practices, provide leadership through the strategies and
integrated development program outlined in Construct New South Wales,
and thereby assist all participants of the construction industry to realise
their full potential by:
• evaluating how they are doing business and identifying
what they have to do to improve their position
• making better strategic decisions
• engaging in management and workforce development
• encouraging better performance through more business
opportunities and better terms of trade, and
• improving communication and relationships.

Integrated development program for the
New South Wales construction industry
Vision for NSW

seamless
efficient and profitable
innovative
environmentally responsible
Government
development program Industry outcomes
Standards of behaviour
Code of Practice
+ Strategies
strategic information
= strategically focused
Code of Tendering business ethics highest ethical principles
business practices reduced cost of doing business
security of payment all parties receive due payment
management and skilled workforce
workforce development
workplace and process continuous improvement
improvement
industrial relations improved industrial relations
management
OHS&R management high safety performance
environmental management enhanced ecologically
sustainable performance
rewards and incentives encouragement and recognition
information technology greater take-up of IT
NSW Government and

community outcomes
• Best value for money from NSW Government's
construction expenditure of $6 billion per annum
• Improved social and environmental outcomes

from government construction
• Improved economic competitiveness of NSW by

increased industry performance and productivity

Part 1
Strategic vision for the
• Current profile of the

• Future demand
• What a responsive construction

industry will look like
— Seamless
— Efficient and profitable
— Innovative
— Environmentally responsible

Current profile of the
strategic vision
Industry structure Most are small and medium enterprises
and engaged in contracting and
It is estimated that there are 88,0002 subcontracting. Typically:
enterprises in the industry in Australia
and about 25,000 in New South Wales. • 65% of all enterprises in the industry
employ two people or less
• less than 1% of enterprises employ more
than 50 people
• 88% of enterprises have turnover of less
Number of employees in
construction industry enterprises than $500,000
• only 1.3% of enterprises have a turnover
of $20 million a year or more.
65%
employ While this diversity makes the industry
2 people highly competitive, it gives rise to a range
or less of issues that impact on the viability of
individual enterprises including:
• under-capitalisation which means
many small and medium enterprises
are unable to withstand reverses in the
market and have limited ability to
1% employ more change or grow their businesses
than 50 people
• low margins, with little or no
investment in research and
development of new processes
or use of new technologies
Total turnover per year in • short-term focus, relationships and
construction industry enterprises planning, and
• a fragmented and aggressive approach
to doing business.
88%
earn less than
$500 000
1.3% earn $20 million

or more
2
Business Operations and Industry Performance—Construction
ABS Catalogue No 8140.0—1995/96

Industry processes
The industry’s production processes are
largely determined by its subcontracting
structure. This has efficiency and
communication implications in that the
bulk of subcontracting businesses are
small enterprises, and are predominantly
family businesses, specialising in a
particular trade or task skill.
As a result:
• up to twenty specialist skilled sub-
contractors may be employed on
a residential housing project
• up to 200 specialist skilled sub-
contractors may be employed on
a major construction site.
This means that work is organised into
small, often isolated packages. The
outcome is typically a fragmented
approach both in design, where separate
small design consultants are used project
by project, and in construction, where
multiple levels of small specialist
subcontractors and suppliers are used.
This fragmentation, together with the
divisions between design and
construction, limits opportunity for
efficiency gains and encourages the
pursuit of singular interests.

Future demand
strategic vision
Why the industry must respond to demand
Contribution to economic Demand factors driving

development industry change in the future
The construction industry in Australia
Client buying practices
is one of the largest workforces in the
country. It produces the basic framework One of the more significant trends is the
of roads, railways, schools, buildings and shift in demand by the industry’s private
other installations essential for the and government sector clients who are
organisation and operation of other moving away from buying construction
industries; it facilitates the delivery of products, preferring instead to buy
services to the community by government; packaged construction services,
and it creates the built environment in increasingly at strategic levels within a
which people live. total asset management and development
infrastructure framework.
The industry operates in three broad
areas of activity: Clients will therefore show an increasing
preference for industry participants that
• residential building
can supply single source solutions to
• non-residential building, and complex problems. These shifts in demand
• engineering construction. allow clients to concentrate on solving
core business issues. For example:
Nationally, annual output in these three
areas is expected to exceed $45 billion • residential provision of a ‘suburb’ or
through to the year 2005. precinct rather than incrementally
acquiring land, developing services
In considering the industry’s future it and residential allotments and building
must be remembered the construction dwellings
industry’s output is a cost input to all
other sectors of the economy. It is vital • commercial provision of a fully
therefore that the industry is able to serviced space or facility rather than
respond positively to demands for incrementally building, fitting out,
industry efficiency, in order firstly to maintaining and managing a building,
make a positive contribution to growth factory or commercial premises.
of the economy, and secondly to assist in In contrast, the industry structure has
attracting investment to Australia. become increasingly disaggregated, ie. it
is predominantly made up of small and
medium enterprises offering specialist
expertise and a narrow range of industry
services.

There is clearly a conflict between what Technological impacts
the market is demanding and trends
Innovative use of technology will
occurring in the industry.
introduce new considerations in
However, the industry can successfully infrastructure needs as a result of the
service future clients’ demands if the major shifts in the work people do, the
parties involved acknowledge individual way they work, where and when they
contributions and effectively manage work. By the year 2005, it is likely that
relationships in new ways. electronic access/delivery will be a prime
means for payments, dissemination of
Impact of international markets information, data collection, and general
communications between businesses,
The industry needs to recognise that its
government agencies and members of
members have a role to play in a global
the community.
market and have the expertise to
contribute to solving worldwide problems. The shift from over-the-counter, mail
For example, the Pacific rim and other or phone delivery to electronic delivery
markets offer substantial business of integrated federal, state and local
opportunities for the future. government services, will introduce
economies of scale in infrastructure with
It is expected that in the next five years
positive long-term benefits in terms of
the number of construction organisations
both quality of service and costs to
with international affiliations will increase
government.
and will service both the domestic and
international markets. Australia’s These trends also produce new design
competitive position will depend on the considerations with the potential for
success of local industry to take advantage a marked improvement in management
of available opportunities. Already, export of the built environment and flow-on
trends exist in specialist expertise, but benefits in the management of energy
broader based success is required. and waste, but can also reduce the overall
scope for speculative investment/
Coupled with the trend referred to above
construction.
is the increasing attractiveness of New
South Wales as a place to invest and where
‘multinational construction companies
which have been operating in Asia will be
increasingly looking to Australian markets
for work’.3
The overall increase in interest from the
Pacific rim will mean that the industry
will be competing internationally for new
infrastructure opportunities.
3
National Institute of Economic and Industry Research—
New South Wales Building and Construction Industry
Monitor, January 1998

What a responsive construction
industry will look like
strategic vision
Characteristics Propositions
Meeting the needs of the future operating What are the short, medium and long-
environment will require a sustained term benefits? What has to be done to
improvement in productivity and quality achieve these objectives?
across the industry. With this in mind, it
More specifically, how can individual
is now broadly accepted that the industry
enterprises reap the benefits from
should have the following characteristics:
changing the way things are done?
Seamless industry The answers to these and many other
questions encapsulated in the following
Client and service-focused enterprises
propositions need careful thought on the
which deliver integrated seamless services
part of all stakeholders.
through alliances which are comprised of
contractors, subcontractors, consultants,
and suppliers. That is, alliances able
to package high value, integrated and
comprehensive solutions through a single
source for clients offering long-term
contracts.
Efficient and profitable industry

Financially robust enterprises that employ
a skilled and flexible workforce.
Innovative industry
Enterprises that are clever and use today’s
and tomorrow’s technology and integrated
processes.
Environmentally responsible industry

Enterprises that are committed to
ecologically sustainable development.

Seamless industry
Changing client demands Industry structure

Clients and client buying practices are In its current form the industry is highly
changing significantly. These changes are diversified and disaggregated in both
being driven by a wide range of factors. structure and process. Presently,
Some of the more significant are: subcontractor enterprises deliver some
75–85% of the value of the industry’s
• an increasingly liberalised ‘free trade’
production. In this climate, the range
regime and exposure to international
and longevity of relationships between
competition, including the movement
the various parties involved in a project
of skilled labour and project managers
or program of work can vary significantly,
between countries to meet tight
from relatively few long-term strategic
construction schedules
alliances through to the normal one-off
• the buying of total infrastructure project-based relationships.
solutions, which aggregate the
To meet the emerging client needs, the
financing, design, construction and
numerous contractors, subcontractors,
operation of facilities into a single
consultants and suppliers who now only
package, and
come together on a discrete project basis,
• the creation of mega projects by will need to link up in longer-term
aggregation of traditional smaller consortia, partnerships and similar
projects to achieve economy of scale arrangements.
efficiencies.
To all intents and purposes a group of
In the Australian market, international service providers must appear as one
corporations and consortia in construction seamless ‘virtual enterprise’ that is capable
are already active and are vying for major of meeting clients’ needs for single-source
infrastructure projects in transport, solutions.
communications and utilities.
It is expected that in the next ten years
there will be a greater need to establish
international affiliations of one kind or
another across all areas of activity in
the industry.
Australian-based companies will need to
build their own capabilities to participate
in these new markets.
The growth of international business and
relationships is occurring, for example,
through joint ventures, alliances or
partnerships, formed in some instances
with governments.

Seamless industry
strategic vision
continued
Relationships For service providers to present single-

source solutions to their clients, it is
Changes affecting relationships in the essential they maintain effective
industry are occurring for a number of communication in their relationships,
reasons and are being driven by the needs/ uphold the diversity and flexibility within
demands of clients. Clients are: individual service teams and build on the
• rapidly changing their approach to essential qualities of trust, co-operation,
procurement of goods, services and equity and honesty. This is doubly
infrastructure important where advanced technology,
open information systems and shared
• seeking packaged, system-wide business communication are used to improve
answers to a range of issues service to clients. Effective management
• limiting their extent of investment in and sharing of information will not occur
new infrastructure in a technology-driven world unless
honesty and trust prevail between the
• finding better ways to manage the parties.
existing stock of infrastructure
The ultimate expression of a co-operative
• demanding whole-of-life infrastructure business relationship is what has been
service termed a ‘virtual enterprise’, with shared
• forging long-term rather than short- values and objectives. These relationships
term project-focused relationships. will take many forms, both informal and
formal, and usually will not involve
changes in ownership or loss of identity.
Indeed, part of the strength of the
arrangements lies in recognition of the
complementary strengths and identity
of the individual members.

Seamless industry
continued
Propositions
1 Integration
The industry must move from being inwardly focused,
adversarial and fragmented to being outwardly oriented,
co-operative and integrated in terms of both its structure
and its production processes.
For small and medium enterprises—the majority of industry
participants—this means that greater attention will be required
in relationships and communication management, particularly
with information technologies increasingly facilitating the
creation of ‘virtual enterprises’.
These entities provide a strategic alliance platform for the
organisations involved to offer combined products and
services while also strengthening their marketing efforts,
thus substantially enhancing their ability to secure business
when compared with their singular efforts.
2 Relationship management
All participants will look to minimise risk through the
maintenance of high quality relationships. These relationships
will extend from client to lead supplier to all sub-supplier
arrangements. As overall performance relies on the performance
of all participants, there will be a need for more effective
management of supply chain relationships and alignment
of all participants’ objectives.
3 Merging industry boundaries—single-source solutions

Clients, rather than dealing with numerous individual suppliers,
will look for single-source solutions. The single supply source
will comprise a number of service providers formed into a
consortium/partnership/alliance that will supply packaged
solutions that extend beyond the familiar range of construction/
development services supplied by the industry today. This will
include participants from other industries eg. finance, health
care.
Individual construction industry participants operating within
these horizontally-integrated arrangements will rely for success
on the integration of tasks, shared objectives and mutual respect
for the specialist contribution of skills and labour made by
others.

Seamless industry
strategic vision
continued
4 World markets
Services will be available to clients from a world market and
project participants will be both local and internationally
based (eg. design may be local with documentation occurring
offshore). Individual participants will be competing and
partnering with world class production. This will require
higher standards of service and new approaches to business
relationships.
5 Client interface
As clients focus increasingly on service delivery and longer-term
relationships, they will become part of the virtual organisations
which will exist throughout the industry.
This will require new approaches to risk sharing and more
open relationships as advanced information technologies
provide the linkages that integrate all business activities from
major suppliers through to small and medium enterprises.
These circumstances will also have a significant impact on
demand for new competencies and skills that will be felt by
all participants—industry members and clients alike.

Business management Overall, a major shift is needed to alter

current ways of thinking about business
A more competitive market, increased improvement, training and continuous
product sophistication, and expanded education. The industry needs to lift
client needs will require significant business management skills as well as
improvements in the industry’s business the technical capabilities of its workforce
and risk management skills. Strategic as the investment in training presently
planning in product lines, market position, falls well short of what is needed. The
relationships and business growth will benefits cannot be ignored: improved
underpin the construction industry competitiveness, quality, flexibility,
enterprise of the future. Part of the current capability and morale—to name a few.
failure of many industry businesses can be
directly attributed to the lack of a well
thought out and executed strategy and
business plan.
Propositions
6 Strategic focus
Industry participants, particularly at the small and medium
enterprise level, must adopt a strategic focus or forward-looking
approach in business development. This will enable these
organisations to create their own future rather than being
reactive to demand. Strategies will include the development of
new products, diversification of services, the development of
new business alliances, and expanding the market and business
sustainability.
7 Resource management
Breaking the current low-margin paradigm can only occur
with major shifts in the way the industry operates. Industry
participants must address human, technical and financial
resource issues, so that they have both the capacity and
capability to perform efficiently and profitably in the area
of the market in which they operate.
8 Business/financial management
The industry can only become profitable if enterprises
strengthen their strategic planning, business and resource
management capabilities and develop the necessary human,
technical and financial management skills.

strategic vision
continued
Propositions
9 Flexibility
People in the industry must improve their capabilities and
flexibility. A key prerequisite of an efficient and flexible industry
is a workforce which is able to adapt quickly to new situations
and challenges. This requires an expansion of the industry’s
skills base.
10 Value for money

All participants, including clients, must move from the low
bid position to the adoption of a wider value set which includes
whole-of-life costs, innovation and value-adding components.

Innovative industry
Procurement Technological trends

In future, the services packaged for clients It is likely that advances in information
will extend beyond the familiar range of technology will be the greatest single
construction services associated with a catalyst for construction industry process
single project. This might be achieved by re-engineering. Advanced technology can
a packaged solution that involves re- help generate enormous savings in the
engineering systems, sourcing, supply construction industry. It will break down
chain management, negotiation of cost- boundaries and accelerate sharing of
effective purchasing arrangements and the knowledge and experience at all levels
maintenance of minimum inventories. of the industry.
Innovative value-adding ways of procuring All processes in the procurement of
goods, services and infrastructure will infrastructure will be affected. The
be the competitive advantage that industry will rely on advanced
distinguishes one organisation from technologies to improve efficiency in:
another. Innovative ways of procuring
• conceptualisation
goods, services and infrastructure are
essentially about balancing the risks that • feasibility
could arise and the severity of the impact • design co-ordination, demonstration,
that these could have on the buyer’s verification and review
efficiency, costs and achievement of other
business objectives, against using more • tendering
complex procurement processes. • contract, construction and cost
management
• operations and maintenance
management, and
• decommissioning planning.
It means planning co-ordination that
would have normally taken weeks or days
in future will be accomplished in hours,
with substantially reduced face-to-face
contact. Indeed, a number of the parties
involved in a particular project may be half
a world away and yet will be able to
contribute as fully as those physically
present.

Innovative industry
strategic vision
continued
Advanced design systems will allow to reach people anywhere and at any time
‘virtual’ analysis and scheme presentation. in the world via voice, data, text or image.
The ‘virtual’ design process will enable Networks are developing which produce
clients to ‘walk through’ a design, global ‘villages’ that transcend national
minimise paper-based documentation, boundaries, and ‘virtual enterprises’ are
avoid conflicts and co-ordination emerging that alter the nature of business
problems, and provide a real time interface relationships dramatically.
between the design and construction
Technology will have a very significant
phases. The resolution of complex design
impact on business practices in the
and production problems, paperless plans
industry, principally because it will help
and construction accompanied by
improve communication across an industry
increased off-site component production
that is today largely unconsolidated and
will be commonplace.
fragmented.
The conduct of government, business
The NSW Government has released a
and essential services in Australia will all
paper Information Technology in Construction
be affected by global information networks
—Making IT Happen which provides
in a global marketplace. For anyone in any
proposals for the adoption of information
organisation of any size, it will be possible
technology by all industry participants.
Propositions
11 Continuous improvement culture

To become truly innovative the industry must commit
to continuous improvement in production and deliver
innovative solutions to meet clients’ needs. It must build
a workforce which is flexible, skilled, continuously
educated and mobile. The industry must work smarter by
re-engineering business and project processes and by
engaging in research and development.
12 Information technology
Industry enterprises will embrace advanced technology
in design, project management, business and financial
management, using today’s and tomorrow’s technology
in process management, monitoring and information
management. Information technology and virtual projects
will save time and money by resolving ambiguities, reducing
the potential for misunderstandings and improving
co-ordination in the construction phase.

Innovative industry
continued
Propositions
13 Information networks
The industry will integrate business practices by using
common information networks. These networks will be a
key driver in the establishment and maintenance of open and
co-operative relationships between those managing construction
activities (contractors) and designers, subcontractors and
suppliers. A combination of information networks and
co-operative relationships will enable virtual enterprises to
offer clients comprehensive solutions through a single source.
14 Critical success factors

Innovation will be an increasing imperative in an environment
where an overwhelming majority of the new products and
services required in the next ten years have not yet been
invented.
Achieving success will require a positive shift in the mindset
on the part of clients and industry participants to:
• looking for new ways of doing things
• doing things first
• adopting new approaches to risk sharing, and
• being prepared to invest in research and development.

Environmentally responsible
strategic vision
industry
Environmental performance
The industry is the prime creator of
the built environment and shapes our
landscape. How well or how badly this
is managed is central to the quality of
life enjoyed by every member of the
community and thus is of vital interest
to everyone. This will increase the focus
on the industry’s performance through
increased community demand for
ecologically sustainable development
(ESD).
Propositions
15 Ecologically sustainable development

The industry must move from having an average to poor
environmental management record to one which gives the
lead to the adoption of ESD for clients and the community.
16 Built environment
Industry participants play a pivotal role in the quality of life
of the community and in the sustainability of the built
environment. This opportunity gives all participants, including
clients, a unique opportunity to increase the industry’s perceived
value to the community.
17 Benchmark environmental achievement

Industry participants must become a benchmark in
environmental achievements in areas such as air quality,
water and land use, energy efficiency, waste management and
environmental auditing.
18 Mainstreaming environmental management

Environmental management must be a mainstreamed business
management function of all industry organisations.

Part 2
NSW Government actions
Security of payment

Overview of strategies

Strategy 1 Strategic information to assist business development

Strategy 2 Wider adoption of the NSW Government Code of Practice
for the Construction Industry
Strategy 3 Reducing the cost of doing business
Security of payment
Strategy 4 The NSW Government construction projects will establish the standards for
industry in payments due to contractors, subcontractors, consultants and suppliers
Strategy 5 The NSW Government will expand the available legislative provisions to
afford greater protection and access to remedies
Strategy 6 The NSW Government will encourage and support industry-based cost-effective
security of payment strategies which do not require direct Government intervention

Strategy 7 Increase investment in training
Strategy 8 Improve access to training
Strategy 9 Integrate training and skill formation into enterprise development
Strategy 10 Improve workforce diversity
Government actions
Strategy 11 Develop a long-term focus for training and identify the construction
industry’s future workforce development needs
Strategy 12 Encourage process improvement
Strategy 13 Mainstreaming industrial relations in project management
Strategy 14 Encouraging workplace reform
Strategy 15 Creating a safe working environment through continuous

Strategy 16 Mainstreaming ESD in the construction industry

Strategy 17 Encourage outstanding performance
Strategy 18 Rewards for outstanding performance
Strategy 19 Recognition of the contribution of small and medium enterprises
Strategy 20 Support for industry take-up of advanced technologies

Strategy 1 Actions:
Strategic information
to assist business 1 Improve the accessibility of industry
development activity projections
Construction industry activity projections will be
The NSW Government will made available online via the NSW Government
provide the construction Home Page. These will include regional information
industry with information to that will prompt industry enterprises to extend their
facilitate enterprise business planning horizon to, for example, 3 to 5 years.
planning to shift from a
project focus to a more
strategic and longer-term 2 Develop key performance indicators
perspective. The collaborative research program between the
This will be facilitated by: Department of Public Works and Services, industry
stakeholders and the University of NSW Building
• Construction Policy Research Centre is developing Best Practice Key
Steering Committee Performance Indicators (KPI). This program will
member agencies, and receive funding to the end of 1999 from the NSW
• Department of State and Government.
Regional Development. Emphasis has been placed on the development by
key industry participants of performance indicators
which are relevant to the operation of individual
enterprises, and which can be applied across the
industry. The interim report Benchmarking
Construction, September 1997, is available from
the Building Research Centre.
Contractors, subcontractors, consultants, suppliers
and industry organisations are invited to participate
and contribute to the success of this initiative by
contacting the Director of the University of New
South Wales Building Research Centre.

continued
Strategy 1 Actions:
continued
3 Improve industry decision making
related to projects
The NSW Government will work with industry
stakeholders to assist in the development of a guide
for improving evaluation of infrastructure proposals—
for example, the inclusion of the whole life cycle cost
of the proposals.
4 Identify enterprise improvement

support programs
The NSW Government will identify programs
provided by the public and private sectors to improve
the competitiveness of NSW enterprises in the
construction industry. These programs will cover
business planning, financial planning, export
planning, technology assessment, networking,
capabilities enhancement and others.
Government actions

Strategy 2 Actions:
Wider adoption
of the NSW Government 5 Promote the benefits of NSW Government
Code of Practice for the Code of Practice to private sector clients
Construction Industry The NSW Government will promote wider adoption
of the NSW Government Code of Practice for the
The NSW Government will
Construction Industry by outlining the benefits accrued
give wider encouragement to
to government projects to the banking, finance and
improvement of industry
investment sector.
business practices to ensure
that standards of behaviour
embody the highest ethical
6 Develop a process for review of contractor
principles and increase
performance on non-government projects
stakeholder confidence that
their business objectives will In establishing pre-registration or prequalification,
be achieved. government agencies consider service provider
performance on both government and private sector
This will be facilitated by the: projects. This process will be extended to provide
• Construction Policy ongoing assessment during the period of
Steering Committee pre-registration or prequalification. To facilitate this,
member agencies, and the Construction Policy Steering Committee will
• Department of State and develop an appraisal process for use by member
Regional Development agencies. The process will ensure the interests of
government agencies and service providers are
observed in respect of privacy and due process.
The performance aspects will focus on but will not be
limited to security of payment, industrial relations,
and occupational health, safety and rehabilitation
performance.
7 Improving Department of Public Works

and Services performance as a client
The Department of Public Works and Services will
take a lead agency role in developing a continuous
improvement strategy of client contract management
performance. This will involve a trial appraisal of its
contract management performance by its best practice
prequalified contractors. The results of the trial will
assist Construction Policy Steering Committee
member agencies in developing improved contract
management processes.

continued
Strategy 2 Actions:
continued
8 Support national exchange of information

on contractors’ compliance with the
Code of Practice
Information on the effectiveness of the Code of
Practice is currently co-ordinated through the
Construction Policy Steering Committee. Information
which will be appropriate for exchange between NSW
and other jurisdictions will be made available to the
Australian Procurement and Construction Council to
facilitate national consistency.
9 Improve contractor and subcontractor

understanding of doing business with
government
The Construction Policy Steering Committee, the
Department of State and Regional Development,
the Department of Education and Training and the
Department of Industrial Relations will work jointly
Government actions
with employer and industry associations to improve
small and medium enterprises’ understanding of
doing business with government, so they are able
to plan for and carry out their responsibilities more
efficiently when working on government projects.
This will also assist them in any business
development or improvement planning.
Related actions directed at assisting small and

medium enterprise development include:
1, 2, 4, 6, 12, 15–18, 21–29, 31–36, 38–40, 43,
45, 52, 64, 65, 68–70, 71, 76, 78, 82, 83

Price movements for materials that fall outside the
accepted norms will be monitored by exchange of
information between the Government’s construction
agencies. Exceptional price movements will be
advised to the Australian Competition and Consumer
Commission for review and action as appropriate.

continued
Strategy 3 Actions:
Reducing the cost of
doing business 11 Introduce innovative business practices
The NSW Government will The Construction Policy Steering Committee member
take steps to reduce the costs agencies will implement appropriate measures to
of doing business through reduce the cost of doing business. These measures
improved industry business include but are not limited to the use of innovative
practices. procurement practices, more balanced approaches to
risk sharing, improved terms of trade (such as those
This will be facilitated by the reflected in the NSW Government C21 Contract), and
Construction Policy Steering by introducing electronic commerce.
Committee member agencies.

The Construction Policy Steering Committee will
monitor the effectiveness of the C21 early payment
provision to contractors and subcontractors. The
Construction Policy Steering Committee may seek
to extend the selected use of this proposal following
the assessment of outcomes.

establish co-ordinated prequalification panels for
contractors and consultants. Panels of consultants
and contractors with specialised expertise will be
maintained by the most relevant government agency
eg. residential construction by the Department of
Housing. For the most part, consultants and
contractors would only need to register once for any
specific category for which there is a panel. However,
there may be circumstances when an agency may
require additional requirements to be met.
The NSW Government will extend single point
whole-of-government accreditation (eg. contractor
OHS&R Management Systems accreditation) to other
key criteria eg. environmental management systems.

Security of payment
Strategy 4 Actions:
NSW Government
construction projects 15 Improve NSW Government contractual
will establish the requirements
standards for industry The Construction Policy Steering Committee will
in payments due to continue to monitor the effectiveness of payment
contractors, sub- initiatives and when necessary upgrade contractual
contractors, consultants requirements to maintain a balance between the
and suppliers interests of all parties in the contractual chain.
The NSW Government has

established initiatives for its 16 Improve industry awareness of NSW
projects to ensure that all Government security of payment initiatives4
parties down the contract
The Department of Public Works and Services and
chain receive payment within
the Roads and Traffic Authority have released
terms that are consistent with
information brochures outlining the current
those that exist between the
initiatives on security of payment being implemented
contractor and the NSW
for government projects, and their relevance to
Government as a client.
contractors, subcontractors, consultants and
suppliers. The other construction agency members
of the Construction Policy Steering Committee will
Government actions
release similar advice covering their market sector.
(See Action 17 and 21 to 24.)
17 Upgrade Statutory Declarations5

The Construction Policy Steering Committee has
reviewed and amended the existing pro forma
Statutory Declaration to widen its reach in issues
such as non-wages type entitlements and strengthen
its effectiveness regarding disputed claims on NSW
government projects. (See Action 21 and 23.)
4
A Fair Payment Deal, by DPWS, can be requested via email
at tenders@dpws.nsw.gov.au
A Fair Payment Deal, by RTA, can be accessed via the web site
www.rta.nsw.gov.au
5
A copy of the Statutory Declaration is included at page 73.

Security of payment
continued
Strategy 4 Actions:
continued
18 Expand contractor and consultant

prequalification
The prequalification schemes of construction agencies
will be expanded to require successful applicants to
demonstrate long term co-operative relationships
with subcontractors and suppliers and a satisfactory
record in dealing with payments to others.
19 Allocate preference for prequalified contractors

and consultants
In situations where prequalified contractors and
consultants compete on an open tender basis,
government agencies will consider allocating
preferences giving a favourable weighting for tender
comparison purposes to prequalified contractors and
consultants.
investigate further encouragement to prequalified
contractors and consultants such as reduced levels
of contract security.
20 Establish a common financial assessment

arrangement for use by NSW Government
agencies
NSW Government agencies now specifically address
the level of capitalisation of contractors they propose
to engage, to ensure that they have adequate capital
to withstand adverse financial events that might
occur during the course of a contract.
To enhance the effectiveness of financial assessments
the Construction Policy Steering Committee will
establish a common financial assessment system
for use by NSW Government agencies. This will
enable the agencies to verify a contractor’s financial
ability to undertake the contracts. The Construction
Policy Steering Committee will also investigate
extension of this arrangement to include consultants
and suppliers.

Security of payment
continued
Strategy 5 Actions:
The NSW Government
will expand the available 21 The Oaths Act strengthened
legislative provisions to In 1997 the NSW Government amended the Oaths
afford greater protection Act 1900 (NSW). The Act has been strengthened to
and access to remedies provide for a separate and distinct set of penalties
for breaches of the Act relating to the provision of
Security of payment problems Statutory Declarations where pecuniary gain was
occur less on government sought. The penalties are aligned with those applying
projects than private sector to breaches of the Crimes Act in the commitment of
work. Consequently, the NSW a fraud. A maximum fine of $10,000 and/or a
Government has amended key maximum of two years imprisonment is now
legislation, and is pursuing available.
further legislative changes to
enhance and support other
security of payment standards 22 The Contractors Debts Act modernised
and initiatives covering
The new Contractors Debts Act 1997 (NSW) is more
contractors, subcontractors,
relevant to contemporary legal and business practice.
consultants, suppliers and
Protection afforded by the new Act include access to
employees for industry
binding court orders which require third party
generally.
payment of outstanding debts, or orders for third
Government actions
parties to retain disputed moneys until the dispute
has been resolved in the court.
Action under the Act is available to all those engaged
in the private sector or on government sector projects.

Security of payment
continued
Strategy 5 Actions:
continued
23 Promote awareness of obligations in the

Industrial Relations Act 1996 (NSW)
The NSW Government will implement measures
to raise industry awareness of the provision of the
Industrial Relations Act 1996 (NSW) which makes
a principal contractor liable for unpaid monies
where, at the time a progress payment is made by
the principal contractor as defined in the Act, a
written statement has not been provided stating
that all wages due and other amounts payable
under legislation, award or enterprise agreement,
to employees of the employer carrying out work for
the principal contractor, have been paid.

To assist in more readily identifying insolvent or
fraudulent operators in the construction industry,
the NSW Government will continue to actively seek
advice on and provide input into the Commonwealth
Government Australian Securities Commission
procedures.
A priority issue is to develop options to identify and
deal with ‘phoenix’ companies and their fraudulent
company officials.

Security of payment
continued
Strategy 6 Actions:
The NSW Government
will encourage and 25 Support industry-based schemes
support industry-based The NSW Government supports the introduction
cost-effective security of of industry-based voluntary schemes such as the
payment strategies Housing Industry Association’s Security of Payment
which do not require Bond for protection of payments to subcontractors
direct Government and suppliers.
intervention Government contracts will include measures designed
to encourage contractors who choose to take out
The NSW Government will such insurance. For example, the NSW Government
continue to support and work is waiving the need for appropriately insured
with industry to develop contractors to hold subcontractors’ cash retentions
appropriate security of or cash security in trust on government projects.
payment initiatives which
aim to address the cause of
problems, not simply the 26 Maintain continuous improvement
effects.
The NSW Government invites the industry to
continue to contribute to the development of
appropriate security of payment initiatives. This
invitation does not preclude any form of initiative;
Government actions
for example, the Parliamentary Standing Committee
Upon Small Business is currently examining a number
of industry proposals. Any proposed initiatives ideally
should:
• address the cause of the problem and not simply
its effects, and
• not involve a cost greater than the problem.
27 Require nomination of major subcontractors,

consultants and suppliers under the NSW
Government’s C21 Contract
Contractors tendering under the NSW Government
C21 Construction Contract Conditions will be
required to nominate major subcontractors,
consultants and suppliers at the time of tender.
In this way the potential for ‘bid shopping’ will
be reduced.

Strategy 7 Actions:
Increase investment
in training 28 A new policy for training on government
continue to encourage greater The existing NSW Government procurement policy,
investment by industry which includes a training component based on a ratio
stakeholders in continuous of one apprentice to four trades persons on
education and training within government construction projects, will be made more
enterprises. Emphasis will be flexible by including additional opportunities for
given to implementation of a training and skill development. This will be facilitated
training culture that improves through the development and implementation of
planning and training training plans aimed at encouraging enterprise-based
delivery. training which is integrated within business activities
of the organisation.
This will be facilitated by:
• Construction Policy
Steering Committee 29 Promote training plans for private-sector
member agencies projects
• Department of Education The training plan approach for NSW government
and Training, and projects will be promoted as a best practice standard
• Department of State and for adoption by the industry generally.
Regional Development.
30 Require training facilities on major government

Contractors on major government construction
projects will be required to establish a training facility
at or near the site and, through consultation with
others engaged on the project, arrange the delivery
of structured training and skill formation initiatives
which are appropriate to the needs of the project,
each employer and their employees. Typically major
projects will have some or all of the following
features:
• an extended construction period
• high cost
• identifiable contract packages within an overall
program of works
• rapidly changing technology
• particular skill formation strategies
• regional significance.

continued
Strategy 8 Actions:
Improve access
to training 31 Publish the NSW Construction Industry
Training Resource Directory
The NSW Government will The Construction Policy Steering Committee will
continue to provide assistance update the NSW Construction Industry Training Resource
to individuals and enterprises Directory annually.
wishing to access training.
• Construction Policy 32 Increase awareness and access to
Steering Committee group training companies
member agencies Information on group training companies will be
• Department of Education included in documentation provided by government
and Training agencies to prospective tenderers to encourage the use
of group training companies. The Construction Policy
• Department of State and
Steering Committee member construction agencies
Regional Development, and
will agree to whole-of-government accreditation for
• WorkCover New South group training companies that ensure equal
Wales. employment opportunity prevails, extend
opportunities to women and Aboriginal and Torres
Strait Islander people, and have the capacity to deliver
services to construction industry employers engaged
Government actions
on government projects.
33 Expand the workforce through

structured entry-level opportunities
The pool of skilled workers available to the industry
will be expanded by offering structured entry-level
training opportunities such as apprenticeships and
traineeships through the Department of Education
and Training.

The gap in current skills including occupational
health, safety and rehabilitation (OHS&R) will be
identified in consultation with industry, and training
and skill formation strategies will be developed and
implemented to maximise the skills and flexibility
of the current workforce and people re-entering the
workforce.

continued
Strategy 8 Actions:
continued
35 Enhance the skills of workers re-entering the

Encouragement will be given for people to re-enter
the industry by providing opportunities on major
NSW Government projects for reskilling and
acquisition of new skills. This will be facilitated
through the training plan requirement for NSW
Government construction projects.

continued
Strategy 9 Actions:
Integrate training and
skill formation into 36 Support small and medium size enterprise
enterprise development business development
The NSW Government will The Department of State and Regional Development
facilitate an increase in will provide information and advice on enterprise
training and skill formation improvement programs available from the
at the workplace to ensure government and the private sector to NSW businesses
that training is responsive to in the construction industry, and encourage their use
industry and enterprise needs. by the industry.
This will be facilitated jointly
by:
To improve pathways to training and entry to the
Steering Committee
construction industry, the NSW Government will
member agencies
encourage schools to offer vocational education and
• Department of Aboriginal training programs which are supported by industry.
Affairs
• Department of Education
and Training 38 Widen construction industry education—
• Department of State and workplace skills assessment and portability
Government actions
Regional Development To enhance the scope for portability of qualifications,
• TAFE and other training workplace skills assessment and training of assessors
providers will be targeted in training plan requirements for
• WorkCover New South NSW Government construction projects.
Wales, and
• Universities 39 Effective application of skill formation in the
in conjunction with industry construction industry
stakeholders, and will be The Department of Public Works and Services is
directed at training pathways partnering with the University of Technology Sydney
which achieve a better Research Centre for Vocational Education and
alignment between school Training and other industry partners, in a three-year
and vocational education project (sponsored by the Australian Research
and training. Council) to assess the future skills needs of the
industry and the impact of generic competencies in
workplace development and changing environments.

continued
Strategy 10 Actions:
Improve workforce
diversity 40 Require workplace mentoring
The NSW Government To optimise workplace training effectiveness,
wishes to expand and contractor training plans on government construction
diversify the construction projects will be required to expressly address
industry workforce and to mentoring and the role of mentors in skills
ensure equality of opportunity acquisition.
prevails in all areas of
industry activity irrespective
41 Create and extend opportunities for
of age, gender or ethnicity.
The NSW Government will Aboriginal and Torres Strait Islanders
take specific steps to Contractors on selected government construction
encourage the mentoring of projects will be required by the agency to develop
new entrants and trainees, strategies that extend employment opportunities,
and to create and extend enhance business skills and provide economic
employment opportunities in benefits for Aboriginal and Torres Strait Islander
the industry for women and communities. Registers of Aboriginal and Torres Strait
Aboriginal and Torres Strait Islander trades people will be developed to improve
Islander people. This will be access to those available for work in the industry.
facilitated jointly by:
Steering Committee
member agencies Further encouragement will be given to increasing
• Department of Aboriginal employment opportunities and career development
Affairs in the construction industry for women, by raising
both the profile and support for the work of the
• Department of Education National Association of Women in Construction
and Training NSW Division. The NSW Government will fund a
• Department of State and pilot study to help develop training and career
Regional Development, and opportunity pathways and scope the introduction
• TAFE and other training of an industry wide training and career development
providers. program for women.

continued
Develop a long-term
focus for training and 43 Convene a forum on workforce development
identify the construction A construction industry forum will be convened
industry’s future to develop the strategies to accelerate workforce
workforce development development. The forum will bring together:
needs • Department of Education and Training
The NSW Government will • TAFE and other training providers
work with industry to identify • Universities
the industry’s workforce • Industry Training Advisory Boards
development needs. This will
• Construction Policy Steering Committee
enable the industry to respond
to changes in client buying • WorkCover New South Wales
practices, increasing global • private sector clients
competition and anticipated • unions, and
rapid advances in information
• employer organisations.
management.
Government actions

Encourage process
44 Involve contractors in buildability reviews
improvement
A program of buildability reviews involving
Construction industry contractors will be established for a cross-section of
participants will be Department of Public Works and Services projects.
encouraged to re-engineer As part of the program, contractors selected for a
and better integrate the project will be individually commissioned to
management of the design undertake a buildability review of that project.
and construction phases of The individual review outcomes will be consolidated
project delivery. for each project and used to improve project
Construction Policy Steering documentation and assist in consultant performance
Committee member agencies assessment.
will facilitate process
improvement by optimising 45 Improved quality of construction contract
consistency in public sector
documentation
agency practices.
The Department of Public Works and Services will
establish a continuous improvement strategy to
improve the quality of construction contract
documentation.
This strategy will include publishing a Technical
Documentation Manual to ensure all consultants
have a common understanding of Department of
Public Works and Services’ project requirements.
Mechanisms will be set up to gather formal feedback
from industry, to ensure all improvement
opportunities are captured.
46 Extending consistent agency practices in

dealings with the construction industry
The Construction Policy Steering Committee
will update the NSW Government Capital Project
Procurement Manual to both incorporate the Construct
New South Wales actions and optimise consistency in
the way that NSW Government agencies deal with
industry.

continued
Mainstreaming
industrial relations in 47 Identification of strategic workplace issues
project management The Construction Policy Steering Committee will
work with industry stakeholders to identify workplace
Industry participants will issues and publish relevant information for the
be encouraged to be proactive guidance of industry participants.
and to have a strategic
approach to management
of industrial relations issues 48 Include industrial relations performance
at the enterprise level and in contractor prequalification
to integrate industrial The Construction Policy Steering Committee will
relations management expand contractor selection processes to include
activities in project industrial relations performance.
management activities.
49 Require tenderers to supply project-specific
Industrial Relations Plans
Tenderers on NSW Government construction projects
will be required to supply a project-specific Industrial
Relations Plan, identifying how these issues will be
managed over the life of a project, and in particular
Government actions
how compliance with the industrial relations
elements in the NSW Government Code of Practice for
the Construction Industry will be achieved. These plans
will be integrated into the tender evaluation process.
50 Report on contractor industrial relations

performance
Industrial relations performance will be included in
contractor performance reports, including assessment
against the Industrial Relations Plans submitted as
part of any tender.
51 Project Agreement guidelines

Guidelines issued by the Construction Policy Steering
Committee outlining requirements for Project
Agreements on NSW Government projects will be
promoted as preferred practice on private sector
projects. These guidelines address productivity
requirements and are promoted as consistent with the
standards outlined in the NSW Government Code of
Practice for the Construction Industry.

continued
Encouraging workplace
reform 52 Encourage small and medium enterprises
to implement workplace reform initiatives
Industry participants, in
particular small and medium The Department of State and Regional Development
enterprises, will be encouraged and the Department of Industrial Relations will assist
to take a longer term view small and medium enterprises to develop their
when addressing workplace management capabilities and approaches to
issues so that they are more continuous improvement. This will be achieved
able to meet the demands of by assisting small and medium enterprises to identify
competition, the need for programs that foster innovative management
flexibility, and the needs of practices to achieve change, growth and international
changing markets. competitiveness.

• Construction Policy 53 Develop best practice case studies
Steering Committee The Construction Policy Steering Committee and the
member agencies Department of State and Regional Development will
• the Department of State publish workplace development case studies for the
and Regional Development guidance of industry participants.
in conjunction with industry
stakeholders.

continued
Creating a safe working
environment through 54 Emphasise OHS&R training on government
continuous improvement construction projects
in Occupational Health To improve OHS&R performance, contractor training
Safety and Rehabilitation plans on government construction projects will be
(OHS&R) required to demonstrate how OHS&R training will
be delivered.
Construction industry
participants will be
encouraged to continuously 55 Require construction industry OHS&R induction
improve their OHS&R training
performance and to achieve
high standards in the The NSW Government will introduce regulations to
management of OHS&R the Occupational Health and Safety Act 1983 (NSW)
issues. which will mandate OHS&R induction training across
the construction industry in NSW. WorkCover New
This will be facilitated by: South Wales will also release a Code of Practice on
• WorkCover New South Induction Training as guidance to the industry.
Wales, and
Steering Committee 56 WorkCover Construction Industry Consultative
Government actions
member agencies Committee
The Committee will continue to identify mechanisms
in conjunction with industry
to improve OHS&R standards in the construction
stakeholders.
industry, strengthen legislative and regulatory
provisions and develop new codes of practice as a
priority.
57 WorkCover to develop Year 2000 Best Practice

program
A strategic vision for OHS&R reform in the
construction industry will be developed with industry.
The WorkCover Committee will promote and publish
safe work practices and showcase continuous
improvement initiatives.
58 WorkCover to undertake construction industry

research
WorkCover, in conjunction with the construction
industry, will undertake research into approaches
to occupational health safety and rehabilitation
management and will produce and release guides
to industry on how to ensure OHS&R management
systems are effectively implemented.

continued
continued
59 WorkCover to streamline Occupational

Health and Safety regulations
WorkCover is reviewing existing regulations in order
to streamline and simplify occupational health and
safety regulations under the Occupation Health and
Safety Act 1983 (NSW). A consolidated regulation will
replace all occupational health and safety regulations
as well as the Construction Safety Act 1912 (NSW) and
Regulations and the Factories, Shops and Industries Act
1962 (NSW) and its Regulations.
60 WorkCover to extend application of OHS&R

management systems by regulation
WorkCover will extend the regulatory provisions
of the Occupational Health and Safety Act 1983 (NSW)
to include implementation of OHS&R management
systems in the construction industry using the
Construction Policy Steering Committee guidelines
for government projects as a model.
61 Accelerate OHS&R management system audits

for government construction projects
Government agencies will accelerate the Construction
Policy Steering Committee OHS&R Management
Systems project audits to ensure that all major
projects in the NSW Government capital works
program are audited at least twice in the life of the
project. These audit outcomes will be included in the
Contractor Performance Reporting system.
62 Audit OHS&R management system performance

by contractors on non-government projects
The performance of contractors which have OHS&R
Management System accreditation for government
projects will be audited by WorkCover on non-
government projects to assess those contractors’ wider
commitment to continuous improvement in OHS&R.

continued
continued
63 Extend the scope of the OHS&R Management

System for government construction projects
The Construction Policy Steering Committee, in
consultation with industry, will extend the
mandatory elements of the OHS&R Management
System. This will include consideration of design
and other ‘up-front’ project planning issues.
64 Extend the application of OHS&R management

for government construction projects
Contractors on government construction projects will
be contractually required by the NSW Government to
ensure that subcontractors develop and implement
compatible project OHS&R management plans.
Government actions

Mainstreaming
Ecologically Sustainable 65 Making Ecologically Sustainable Development
Development (ESD) in (ESD) meaningful to the construction industry
the construction industry The nationally endorsed definition of ESD is ‘using,
conserving and enhancing the community’s resources
so that ecological processes, on which life depends,
encourage the construction
are maintained, and the total quality of life, now and
industry to proactively
in the future, can be increased’.6
manage environmental issues,
which will lead to the The Construction Policy Steering Committee, in
industry being recognised for conjunction with the Environment Protection
its high ESD performance by Authority, will work with industry organisations to
both clients and the wider further develop this definition in the context of the
community. activities of the construction industry. In this way
industry participants will be able to directly link and
This will be facilitated jointly thereby better align their activities and services with
by: the community’s ESD expectations.
Steering Committee
member agencies, and 66 Establish environmental best practice on
government projects
• Environment Protection
Authority The Construction Policy Steering Committee will
consider environmental initiatives on Olympics 2000
in conjunction with industry projects, with a view to developing guidelines to assist
stakeholders. construction agencies to introduce appropriate
initiatives across the NSW Government’s capital
works program. Selected projects will be used to
showcase best practice in environmental innovation
and management.
67 Require Environmental Management System

(EMS) accreditation of contractors on
government projects
Contractors and other service providers will require
EMS accreditation as a prerequisite for tendering for
government projects. Guidelines will be issued by the
Construction Policy Steering Committee outlining
the NSW Government’s EMS requirements and
tender thresholds. The Construction Policy Steering
Committee will also provide advice on where
assistance can be obtained for the development and
implementation of an EMS.
6
Australia’s National Strategy for Ecologically
Sustainable Development, December 1992

continued
continued
68 Audit Environmental Management Plans (EMP)

on government projects
Contractors and consultants on government
construction projects will be required to prepare
an EMP before starting work. Actual performance
will be audited against the EMP and included in
the Contractor and Consultant Performance
reporting systems.
69 Require reporting on environmental

performance on government projects
Contractors, consultants and other service providers
will be required to report on their environmental
performance. Reporting will be based on
environmental performance indicators which are
quantitative, and linked to targets involving a
continuous improvement process. The NSW
Government will publish guidelines outlining
Government actions
the requirements.
70 Publish waste minimisation strategies for

government construction projects
The NSW Government will publish guidelines
covering project waste minimisation strategies that
help industry meet the NSW Government’s targeted
60% reduction in construction waste deposited in
landfill. Key aspects will include:
• encouraging life cycle analysis in project design
• incorporating waste prevention measures in design,
documentation and supervision
• incorporating other potential uses in building
design
• encouraging contractors and subcontractors to
reduce waste
• considering waste recycling opportunities resulting
from demolition in the construction planning phase
• developing voluntary return systems for damaged
materials, and possibly packaging
(continued on next page)

continued
continued
• promoting eco-labelling of construction materials
• promoting the replacement of non-reusable
and environmentally hazardous materials with
environmentally friendly products wherever
possible
• promoting maintenance in preference to demolition
and new construction
• encouraging systematic maintenance of assets
eg. buildings, roads etc, which should increase the
life span and economic viability of the assets, and
• incorporating waste reduction education and
training programs as essential elements in
existing training programs.
71 Pilot recycling and reuse on government

The NSW Government will in implementing its
Waste Reduction and Purchasing Policy 7 undertake
pilot projects which optimise the use of secondary
or recycled materials. The results of these projects
will be publicised for wider industry guidance.

The NSW Government will help industry to identify
alternative sources of fine sand and make more
effective use of this scarce resource by optimising
and promoting the increased use of substitutes.
7
Waste Reduction and Purchasing Policy–
A Guide for Agencies, September 1997.
Environment Protection Authority.
Phone 131 555

Encourage outstanding
performance 73 Best practice framework for contractor
and consultant selection
select service providers in the The Construction Policy Steering Committee will
delivery of its capital works develop strategies for integrating best practice
program in a way which contractor and consultant selection characteristics
encourages industry into construction agencies’ project delivery processes.
participants to commit to The Department of Public Works and Services best
long-term continuous practice framework will provide the basis for strategy
improvement. development. (See Actions 74–78.)
This will be facilitated by

Construction Policy Steering 74 Access to Department of Public Works
Committee member agencies and Services projects
by adopting best practice
Existing prequalified panels of contractors will
requirements for their project
ultimately be closed in favour of contractors
delivery processes.
accredited under the Department of Public Works
and Services best practice contractor scheme.
Government actions
75 Encouragement for best practice accreditation
by contractors
Department of Public Works and Services best practice
scheme accredited contractors will:
• be given a 2% assessment benefit when competing
with contractors that are not best practice
accredited, and
• be given a reduced level of security of contract
value (from 5% of contract to 3%) to be lodged
on contracts.
76 Adopt the C21 Contract for all

Department of Public Works and Services
best practice scheme contractors
On completion of the first round of projects using
the C21 Contract, a new edition will be available
and applied to all contracts which involve
Department of Public Works and Services best
practice scheme contractors. The new edition will
include standard subcontract conditions reflective
of the main contract conditions.

continued
continued
The Department of Public Works and Services best
practice scheme for contractors will be reviewed, and
the entry requirements will be raised as a mechanism
for contractors involved in government construction
projects to strive for outstanding performance.

The Department of Public Works and Service will
introduce a best practice scheme for consultants.
The scheme will have the same objectives as that
for contractors, namely to encourage and reward
consultants committed to outstanding performance.

continued
Rewards for outstanding
performance 79 Increased business opportunities for
outstanding performers
continue to reward high Outstanding performance by contractors on
performance and provide construction projects will be rewarded through
incentives for enterprises more opportunities to do business, and longer term
which show significant relationships.
improvement.
This will be facilitated by: 80 Pursue a nationally co-ordinated reward and
• Construction Policy incentive regime
Steering Committee The NSW Government will work with the
member agencies, and Commonwealth and other States and Territories
• the Department of State to encourage the adoption of a compatible reward
and Regional Development. and incentive regime.
81 Recognise excellence on NSW Government

projects
Government actions
develop with the Department of State and Regional
Development an annual award which recognises
excellence on NSW Government projects.

continued
Recognition of the
contribution of small 82 Emphasise encouragement to small and
and medium enterprises medium enterprises
The NSW Government will Long-term procurement strategies will include an
ensure that the role and assessment of contractors’ supply chain management
contribution of small and relationships. These will address terms of trade,
medium enterprises in the security of payment and relationship management.
output of the construction
industry is better recognised Related actions directed at encouraging and
on NSW Government projects. assisting small and medium enterprise development
This will be facilitated by: include:
• Construction Policy Strategy 1 1, 2, 4
Steering Committee
Strategy 2 6, 9
member agencies, and
• the Department of State Strategy 3 12
and Regional Development. Strategy 4 15–18
Strategy 5 21–24
Strategy 6 25–27
Strategy 7 28–29
Strategy 8 31–35
Strategy 9 36, 38–40
Strategy 11 43
Strategy 12 45
Strategy 14 52
Strategy 15 64
Strategy 16 65, 68–70, 71
Strategy 17 76, 78
Strategy 20 83

Support for industry
take-up of advanced 83 Introduce an information management strategy
technologies To facilitate the take-up of information technology
the Government has released a discussion paper
Increasingly business
Information Technology in Construction—Making IT
will communicate with
Happen. The discussion paper outlines a three-tier
Government through
strategy for encouraging the private sector to increase
information technology.
the use of information management in project
Ultimately, this will become
delivery. The strategy encompasses:
the preferred means of
communicating with the • adoption of electronic communications
industry. The NSW and commerce
Government will facilitate • shared or common project information
the take-up of advanced and communications
technologies across the • virtual project, ie. the use of comprehensive
construction industry with project information and communications at
the view to much greater all levels of the project.
efficiency and improved
The discussion paper nominates the Department of
productivity in:
Public Works and Services as the lead agency in
• conceptualisation piloting these initiatives.
Government actions
• feasibility
• design co-ordination and
modelling/demonstration, 84 Construction Policy Steering Committee to
verification and review monitor information management initiatives
• tendering The Construction Policy Steering Committee will
monitor the Department of Public Works and Services
• contract, construction
information management initiatives as a basis for
and cost management
integrating these concepts into a wide range of
• operations and government construction projects.
maintenance management,
and
• decommissioning planning. 85 Support the Construct IT program for
the construction industry
collaborate with the University of Newcastle (NSW)
to establish and promote the Construct IT venture.
Industry participation in the Construct IT program is
encouraged. The program will provide mechanisms to
help individuals or enterprises wishing to develop
their information technology capacity.

Actions: contribution to industry
development (matrix)
This matrix sets out the twenty strategies presented in Construct New South Wales
and evaluates their contribution to industry development in terms of the vision for
the NSW Construction Industry: seamless industry, efficient and profitable industry,
innovative industry and environmentally responsible industry.
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Strategy 1
Strategic information to assist business development
1 Improve the accessibility of industry activity projections
2 Develop key performance indicators
3 Improve industry decision making related to projects
4 Identify enterprise improvement support programs

Strategy 2
Wider adoption of the NSW Government
Code of Practice for the Construction Industry
5 Promote the benefits of NSW Government Code of Practice to
private sector clients
6 Develop a process for review of contractor performance
7 Improving DPWS performance as a client
8 Support national exchange of information on contractors’
compliance with the Code of Practice
9 Improve contractor and subcontractor understanding of
doing business with government
Strategy 3
Reducing the cost of doing business
11 Introduce innovative business practices

development continued
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Security of payment
Strategy 4
NSW Government construction projects will establish
the standards for industry in payments due to contractors,
subcontractors, consultants and suppliers
15 Improve NSW Government contractual requirements
16 Improve industry awareness of NSW Government
security of payment initiatives
17 Upgrade Statutory Declarations
18 Expand contractor and consultant prequalification
19 Allocate preference for prequalified contractors and consultants
20 Establish a common financial assessment arrangement for use
by NSW Government agencies
Strategy 5
The NSW Government will expand the available
legislative provisions to afford greater protection
and access to remedies
21 The Oaths Act strengthened
22 The Contractors Debts Act modernised
23 Promote awareness of obligations in the Industrial Relations Act
Strategy 6
The NSW Government will encourage and support
industry-based cost-effective security of payment strategies
which do not require direct Government intervention
25 Support industry-based schemes
26 Maintain continuous improvement
27 Require nomination of major subcontractors, consultants
and suppliers under the NSW Government’s C21 Contract

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Strategy 7
Increase investment in training
28 A new policy for training on government construction projects
29 Promote training plans for private-sector projects
30 Require training facilities on selected government construction projects
Strategy 8
Improve access to training
31 Publish the NSW Construction Industry Training Resource Directory
32 Increase awareness and access to group training companies
33 Expand the workforce through structured entry-level opportunities
35 Enhance the skills of workers re-entering the construction industry
Strategy 9
Integrate training and skill formation into enterprise development
36 Support small and medium size enterprise business development
38 Widen construction industry education—workplace skills assessment
and portability
39 Effective application of skill formation in the construction industry
Strategy 10
Improve workforce diversity
40 Require workplace mentoring
41 Create and extend opportunities for Aboriginal and Torres Strait Islanders
Strategy 11
Develop a long-term focus for training and identify the
construction industry’s future workforce development needs
43 Convene a forum on workforce development

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Strategy 12
Encourage process improvement
44 Involve contractors in buildability reviews
45 Improved quality of construction contract documentation
46 Extending consistent agency practices in dealings with the
Strategy 13
Mainstreaming industrial relations in project management
47 Identification of strategic workplace issues
48 Include industrial relations performance in contractor
prequalification
49 Require tenderers to supply project-specific Industrial
Relations Plans
50 Report on contractor industrial relations performance
51 Project agreement guidelines
Strategy 14
Encouraging workplace reform
52 Encourage small and medium enterprises to implement
workplace reform initiatives
53 Develop best practice case studies
Strategy 15
Creating a safe working environment through continuous
54 Emphasise OHS&R training on government construction projects
55 Require construction industry OHS&R induction training
56 WorkCover Construction Industry Consultative Committee
57 WorkCover to develop Year 2000 Best Practice program
58 WorkCover to undertake construction industry research
59 WorkCover to streamline Occupational Health and Safety regulations
60 WorkCover to extend application of OHS&R management
systems by regulation
61 Accelerate OHS&R management system audits for government
62 Audit OHS&R management system performance by contractors
63 Extend the scope of the OHS&R Management System for government
64 Extend the application of OHS&R management for government

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Strategy 16
Mainstreaming ESD in the construction industry
65 Making Ecologically Sustainable Development (ESD) meaningful to
the construction industry
66 Establish environmental best practice on government projects
67 Require EMS accreditation of contractors on government projects
68 Audit environmental management plans on government projects
69 Require reporting on environmental performance on government
projects
70 Publish waste minimisation strategies for government
71 Pilot recycling and reuse on government construction projects

Strategy 17
Encourage outstanding performance
73 Best practice framework for contractor and consultant selection
74 Access to DPWS Projects
75 Encouragement for best practice accreditation by contractors
76 Adopt the C21 Contract for all DPWS best practice scheme contractors
Strategy 18
Rewards for outstanding performance
79 Increased business opportunities for outstanding performers
80 Pursue a nationally co-ordinated reward and incentive regime
81 Recognise excellence on NSW Government projects
Strategy 19
Recognition of the contribution of small and medium enterprises
82 Emphasise encouragement to small and medium enterprises

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Strategy 20
Support for industry take-up of advanced technologies
83 Introduce an information management strategy
84 Construction Policy Steering Committee to monitor information
management initiatives
85 Support the Construct IT program for the construction industry

Glossary
billion
1,000 million
CPSC
Construction Policy Steering Committee
DPWS
EMP
Environmental Management Plan
EMS
Environmental Management System
ESD
Ecologically Sustainable Development
IT
Information Technology
OHS&R
Occupational Health, Safety and
Rehabilitation
TAFE
Technical and Further Education
virtual
Presented as real without actually existing,
eg. simulated by computer modelling

Contributors to Construct
New South Wales
Responses to NSW Government Green Department of Fair Trading

Paper The Construction Industry in E Coombs
New South Wales, Opportunities and Department of Housing
Challenges, October 1996 G Richmond
Air Conditioning & Mechanical Contractors Department of Local Government

Association of NSW Ltd G Payne
N Argent Department of Training and Education
Ames (NSW) Co-ordination (NSW)
R Anthony J Diplock
Association of Consulting Architects Environmental Protection Authority

L Skinner N Shepherd
R Stone ASTC (Bldg) MAIC Evan Swan Pty Ltd
Australian Constructors Association E Swan
J Barrett Heritage Office
Australian Institute of Refrigeration, Air R Strong
Conditioning & Heating Heritage Training Enterprise
J Brock V Allen
Australian Pacific Projects Corporation Ivor David & Associates Management
Pty Ltd Consultants
J Taylor I David
Australian Pre-Mixed Concrete Association Keeler Hardware
A Peek C Keeler-Milne
Building Careers Centre Inc Lehmann Consulting
P J Tyler M Lehmann
Building Design Professions Group NSW Lipman Pty Ltd
K Whitmore P Watkins
Central Signs M C Harrold & Associates Pty Ltd
W J Walsh K O’Neill
Civil & Civic Pty Ltd Master Painters Australia, NSW Association
D Woodcock W A Tracey
Civil Contractors Federation Metal Trades Industry Association
B O’Donnell C D Whiting
Coastal Air Conditioning Minister for Planning & Local Government
G Castle VIC
Construction Forestry Mining & Energy R Maclellan
Union, Building Division National Precast Concrete Association
D Reiss of Australia
Construction Industry Training Board I Jones
South Australia NSW Department of Sport & Recreation
D D Strain W J Gillooly
Construction Payments Group NSW Department of Urban Affairs
J Elder & Planning
Delta Electricity G Kibble
R W Schmid

Contributors to Construct New South Wales
continued
NSW Police Service The Royal Australian Institute of Architects

J Ure M Jones
Oakes Ash International and The Treasury
D Reed & Associates M Lambert
Office of Marine Safety & Port Strategy The University of Newcastle
D Esplin S E Chen
Pioneer International Ltd University of Technology
M Lye J Garrick
P Hager
PMRT Management Consulting
E Shublaq University of Technology
J G Crowe
Premiers Department
C Gellatly University of Western Sydney
J Van der Have C Edds
Property Council of Australia Western Institute of TAFE
M Quinlan N Black
Quick Brick Pty Ltd WorkCover New South Wales
J G Piubello D Easton
R A Hodge & Son Builders Pty Ltd Zoological Parks Board of NSW
R A Hodge H Rankin
Rail Access Corporation
J Stack Responses to NSW Government
Green Paper Security of Payment for
Rescrete Industries Pty Ltd
J Burke Subcontractors, Consultants and Suppliers
in the New South Wales Construction
South Western Sydney Institute of TAFE
D Harrowell
Industry, October 1996
Specialised Building Constructions Pty Ltd Australian Pre-Mixed Concrete Association
G Foster A Peek
State & Regional Development AIRVAC Vacuum Systems

A Crook G Radinoff
P Paterson Aquatec-Maxcon Pty Ltd
Sydney Organising Committee for the T Lawson
Olympic Games Association of Consulting Architects
S Balderstone L Skinner
Sydney Ports Association of Consulting Surveyors
G J Martin C Duggan
The Australian Institute of Building Australia Pacific Projects Corp Pty Ltd
V R Littlewood J Taylor
The Building Industry Specialist Contractors Australian Bankers Association
Organisation of NSW I Gilbert
I Warren
Australian Business Chamber
The Crushed Stone & Sand Association of P M Holt
NSW
A Peek

continued
Australian Constructors Association Jardine Australia Insurance Brokers Pty Ltd

J Barrett P Foster
Australian Prestressing Services Pty Ltd Keeler Hardware
M O’Neill C Keeler-Milne
B M Culley & Associates Pty Ltd Kratrim Pty Ltd
B Culley N Harris
Beckhaus Civil Pty Ltd M C Harrold & Associates Pty Ltd
D F Beckhaus K O’Neill
Berem Constructions Master Builders Association NSW
I Murtagh L Mahoney
Brodyn Pty Ltd Metal Trades Industry Association
C Walshaw C D Whiting
Building Science Forum of Australia Micron R & D
I W Maze M Fearns
Chubb/Sarial Surety Underwriting Agency Multi Merchants Pty Ltd
M Parsons W Beutler
Civil Contractors Federation Multiplex Constructions Pty Ltd
B O’Donnell D Taylor
Construction Payments Group National Precast Concrete Association of
J Elder Australia
I Jones
Corporate ScoreCard Pty Ltd
G M Soper NSW Department of Sport & Recreation
W J Gillooly
The Crushed Stone & Sand Association
of NSW NSW Security of Payment Committee
A Peek D Armstrong
Delta Electricity O’Neill Quality Constructions
R W Schmid J O’Neill
Dept of Fair Trading Office of Marine Safety & Port Strategy
E Coombs D Esplin
Develco Pty Ltd P Ward Civil Engineering Pty Ltd
J Reisinger P G Ward
Engineering Superstructures Pty Ltd P J Russell & Co
G Renton P J Russell
Evan Swan Pty Ltd Pacific Power
E Swan P T Graham
Fugen Holdings P/L Philip Davenport Solicitor
T J Murphy P Davenport
Haden Engineering Pty Ltd Pioneer International Ltd
G Whittaker M Lye
S Jones
Housing Industry Association B Hurley
P Gilchrist

continued
Property Council of Australia Department of Fair Trading

M Quinlan D O’Connor
R A Hodge & Son Builders Pty Ltd Department of Local Government
R A Hodge G Payne
Stonelite Australia Pty Ltd Department of Mineral Resources
J J Supple D Nicholson
Subcontractors Suppliers & Employers Department of School Education
Federation of Australia Ltd D Rowland
P Pistorius
Department of Training & Education
The Australian Institute of Building Co-ordination
V R Littlewood J Diplock
The Electrical Contractors Association Heritage Office
(South Africa) R Strong
J Baker
Independent Commission Against Corruption
The Home Company Pty Ltd P Gifford
B J H Sayers The Hon B S J O’Keefe
The National Electrical Contractors Land & Water Conservation
Association B Smith
A J Robertson
Master Builders Association
The Royal Australian Institute of Architects L Mahoney
M Jones
Morris Bray Architects
The University of Melbourne G Bray
V Watts
Pacific Power
Timber & Building Materials Association P T Graham
(NSW) Ltd
J G Bagley Panan Constructions Pty Ltd
A Vermeulen
Victorian Security of Payment Committee
R White Rail Access Corp
J Stack
Responses to NSW Government paper Roads & Traffic Authority
A Perspective of the Construction S Gopalakrishnan
Industry in NSW in 2005, April 1997 Roads & Traffic Authority
G Forster
Building and Construction Council
P Tyler State Rail Authority of NSW
K Finnimore
Boral Asphalt
R Erwin TAFE NSW
J Allsopp
Building Design Professions Group NSW
K Whitmore Underwood & Underwood Architects
R Underwood
Building Studies UTS
G De Valence WorkCover New South Wales
D Easton
C J Mackenzie Engineering
C Mackenzie
Corporate ScoreCard Pty Ltd
R Turtle

Construction Policy Steering
Committee agencies
Roads and Traffic Authority Rail Access Corporation

Level 6, Centennial Plaza Level 14, 55 Market Street
260 Elizabeth Street Sydney NSW 2000
Surry Hills NSW 2010 phone (02) 9224 2507
phone (02) 9218 6400 fax (02) 9224 3629
fax (02) 9218 6980
The Cabinet Office
Department of Industrial Relations Level 38, Governor Macquarie Tower
Level 3, 1 Oxford Street 1 Farrer Place
Darlinghurst NSW 2000 Sydney NSW 2000
phone (02) 9243 8871 phone (02) 9228 4785
fax (02) 9266 8731 fax (02) 9228 4242
Treasury Department of Housing

Level 26, Governor Macquarie Tower Level 4, 23–31 Moore Street
1 Farrer Place Liverpool NSW 2170
Sydney NSW 2000 phone (02) 9821 6597
phone (02) 9228 5209 fax (02) 9821 6300
fax (02) 9228 4184
Olympic Co-ordination Authority
Sydney Water Corporation 6 Australia Avenue
Level 12, 115–123 Bathurst Street Homebush Bay NSW 2140
Sydney NSW 2000 phone (02) 9735 4493
phone (02) 9350 5633 fax (02) 9735 4888
fax (02) 9350 6080
Pacific Power Level 23, McKell Building
Level 20, Electricity House 2–24 Rawson Place
Cnr Park & Elizabeth Streets Sydney NSW 2000
Sydney NSW 2000 phone (02) 9372 8852
phone (02) 9268 8193 fax (02) 9372 8851
fax (02) 9268 6141 email cpsc@dpws.nsw.gov.au
Rail Services Australia

Room 1007, 11–31 York Street
Sydney NSW 2000
phone (02) 9224 4502
fax (02) 9224 4154

Statutory Declaration
Schedule
Statutory Declaration Oaths Act (NSW) Ninth Schedule
insert full name of

I, ...........................................................................................................................................
Declarant
of ............................................................................................................................................ insert address
1 declare that I am the representative of the Contractor:

insert name of
........................................................................................................................................... Contractor, and ACN
if applicable
in the Office Bearer capacity of:
........................................................................................................................................... insert position

title of Declarant
the said Contractor having a contract for:
insert name of
........................................................................................................................................... Contract
with ............................................... and I am in a position to know the facts attested to. insert name of
Principal
2 All workers who have at any time been engaged by the Contractor:
a) have been paid all moneys which as at the date of this declaration are due and payable to
them by the Contractor in respect of their employment on work under the Contract, and
b) have otherwise received or had accrued to their account all benefits to which they are
entitled from the Contractor as at the date of this declaration in respect of their employment
on work under the Contract pursuant to any award, enterprise agreement, act or regulation,
with the exception of the workers and respective amounts listed below:
insert names and
........................................................................................................................................... addresses of the
........................................................................................................................................... unpaid workers,
the amounts owing,
........................................................................................................................................... and whether in
respect of wages,
holiday pay,
allowances etc.
3 All subcontractors and suppliers to the Contractor have been paid all moneys which as
at the date of this declaration are due and payable to them by the Contractor for the
performance of work under the Contract and the supply of materials for use in work
under the Contract, with the exception of the subcontractors and suppliers and the
respective amounts listed below:
insert names and
........................................................................................................................................... addresses of the
unpaid subcontractors
........................................................................................................................................... and suppliers, the
........................................................................................................................................... amounts owing
and whether in
respect of materials
supplied, work
4 In all cases where a subcontractor or supplier to the Contractor has provided services performed etc.
and/or materials in respect of the Contract and has submitted a claim to the
Contractor for these services or materials which as at the date of this statutory
declaration would have been due and payable but which the Contractor disputes, the
reasons for such dispute have been notified in writing to the subcontractor or supplier
by the Contractor prior to the date of this statutory declaration. Where such dispute
relates to part only of the subcontractor or supplier’s claim, that part of the claim not
in dispute has been paid by the Contractor to the subcontractor or supplier as at the
date of this statutory declaration except for the amounts listed in 3 above.
5 The provisions of clause SECURITY OF PAYMENT if included in the Contract have

been complied with by the Contractor.

Schedule
6 The Contractor has been informed by each subcontractor to the Contractor (except for
subcontracts not exceeding $25,000 at their commencement) by statutory declaration
in equivalent terms to this declaration (made no earlier than the date 14 days before
the date of this declaration):
a) that their subcontracts with their subcontractors and suppliers comply with the requirements
of clause SECURITY OF PAYMENT if included in the Contract, and
b) that all workers, subcontractors and suppliers, as at the date of the making of such a
declaration:
–have been paid all moneys due and payable to them by; or
–had accrued to their account or received all benefits to which they are entitled from;
the subcontractor of the Contractor or from any other subcontractor (except for subcontracts
not exceeding $25,000 at their commencement) in respect of any work under the Contract.
c) of details of any amounts due and payable or benefits due to be received or accrued
described in 6(b) above which have not been paid, received or accrued,
except for the following subcontractors to the Contractor who have failed to provide
such a declaration:
insert names and
........................................................................................................................................... addresses of the
........................................................................................................................................... Contractor’s
subcontractors who
........................................................................................................................................... have not submitted a
declaration, and
7 Where a subcontractor to the Contractor has provided a declaration as in 6 above, and amounts due to them
it includes unpaid amounts or benefits either not received or not accrued, details of by the Contractor in
the subcontractor, details of the affected workers, suppliers and subcontractors of the respect of this claim
subcontractor, and the respective amounts or benefits either unpaid or not accrued are
as follows:
........................................................................................................................................... insert names and
addresses of the
........................................................................................................................................... unpaid workers,
subcontractors and
........................................................................................................................................... suppliers and amounts
listed as owed to
8 In relation to the statutory declaration provided by each subcontractor to the them, and the names
Contractor, I am not aware of anything to the contrary of what is contained therein, of the respective
and on the basis of the contents of those statutory declarations, I believe that debtors
information to be true.
I make this solemn declaration, as to the matter aforesaid, according to the law in this
behalf made, and subject to the punishment by law provided for any wilfully false
statement in any such declaration.
Declared at ........................... on .......................................................................................

(place) (day) (month) (year)
....................................................................................
(Signature of Declarant)
Before me:
.......................................................................................
(Signature of person before whom the declaration is made)
.......................................................................................
(Name of the person before whom the declaration is made)
.......................................................................................
(Title* of the person before whom the declaration is made)
*The declaration must be made before one of the following persons:

–where the declaration is sworn within the State of New South Wales:
(i) a justice of the peace of the State of New South Wales;
(ii) a solicitor of the Supreme Court of New South Wales with a current practising
certificate; or
(iii) a notary public.
–where the declaration is sworn in a place outside the State of New South Wales:
(i) a notary public; or
(ii) any person having authority to administer an oath in that place.

Case study: Workforce development in action
Liverpool Hospital
Redevelopment Project
Summary Studies show that they have maintained

their values and skills, and are consistent,
This study focuses on re-introducing
productive and sought-after workers.
long-term unemployed construction
workers into the workforce and enhancing Improved project performance,
the skills of the site workforce. This was due to:
achieved through an on-site Construction • high levels of communication,
Skills Development Centre (CSDC) at the planning, co-ordination and co-
Liverpool Hospital Redevelopment Project. operation which led to continuous
The key issue is continuous improvement improvement on the job
in productivity-oriented learning. By • broad awareness of production, time
integrating structured learning into work and quality requirements
processes, sustainable productivity • development of subcontractors’ core
improvements were achieved. competencies
The Australian National Training • broadening of employee competencies
Authority awarded Barclay Mowlem to include teamwork and work
Construction Limited the 1996 Australian management
Trainer Award. • a customer-focused work ethic which
supported the project’s commercial
The project imperatives, as well as social values
The Liverpool Hospital Redevelopment • clearly expressed needs, agreed
Project involved the construction of two expectations, monitoring progress and
buildings and refurbishment of an existing achieving the rewards and benefits
wing. It was completed in mid 1996. anticipated by stakeholders.
At the time, unemployment in south-west Labour costs contained
Sydney was 17%, with chronic long-term
unemployment. Apprentices had a proven ability to
work productively from day one. As
The project was undertaken by the subcontractors saw productivity and
Department of Public Works and Services quality gains, attitudes to employing
for the South Western Sydney Area Health apprentices changed. Trainees delivered
Service. The contractor was Building Group quality work and became sought after.
South, Barclay Mowlem Construction
Limited (BMCL). Industry skill base strengthened
The learning program filled project
The gains skill shortages and brought long-term
unemployed workers back into the
Improved quality of life for trainees industry.
244 recruits entered pre-vocational
Subcontractors’ core enterprise
training, and 198, most aged between
competencies were improved by
20 and 35, achieved full-time adult
employing apprentices competent in
apprenticeships.
the skills required and able to work safely
Many joined subcontractors on the site, and productively on site.
others were offered jobs by employers who
More than 700 persons beginning work on
heard about the training initiative and the
site completed a substantial Occupational
quality of the trainees.
Health and Safety induction course.

Liverpool Hospital Redevelopment Project
continued
This course was competency-based and Meeting the commercial imperative

required participants to successfully A skills audit at the project found:
complete an assessment process.
• 80–90% of the ‘tradespersons’ had no
A team building and leadership program formal trade training, had a narrow
was conducted for 30 subcontractors’ skill base and had never participated
employees. Participants were also given in structured on-the-job learning.
the opportunity to put theory into practice • subcontractors were not meeting the
by leading weekly discussions or ‘tool box’ NSW Government requirement of one
meetings. apprentice to every four tradespeople.
The 23 members of the Enterprise and BMCL recognised that the project needed
Occupational Health and Safety a skills development program to:
Consultative Committees participated
• upgrade skills on the job
in training on consultative committee
processes. • correct the apprentice/tradespersons
ratio
40 persons attended English language
• contain labour costs, and
and literacy classes. In addition all workers
were assessed for English language • lift productivity and the standard
competency. of workmanship.
500 persons were given an education Subcontractors entered into individual

session on skin cancer awareness followed enterprise agreements supporting and
by the offer of physical examinations by accepting involvement in the training
the hospital. initiative.
All workers on site were encouraged to The stakeholders agreed to apply the skills
obtain additional qualifications such as acquired by the trainees immediately to
tickets for crane chasing and excavation. the job, and to guarantee apprenticeships
Training was also available in scaffolding, to successful trainees.
formwork, carpentry, concreting, materials Bringing training to the workplace
handling and project supervision.
While most of the training was delivered
The story on the job or at the site learning centre,
TAFE coaches were available on the job
BMCL set out to extend consultative and were vital to linking productivity
management and customer-focused values targets with training inputs. TAFE coaches
to the workface. A Partnering Charter, on the job freed tradespeople to do their
agreed by major stakeholders, established own work and ensured the quality of the
a framework for achieving continuous training. Pre-vocational training was
improvement. structured so that trainees could take work
The CDSC was to deliver productivity- to a stage where a tradesperson could
oriented training. A steering committee finish the job.
created a broad support base, while the The CSDC put training in the work
design and running of the program was context where communication,
left to on-site leadership. co-ordination, problem solving and
teamwork skills are a part of doing the job.

Liverpool Hospital Redevelopment Project
continued
The lessons • Alliances are best placed to observe and

guide site-based training initiatives.
Reasons for success
• Existing skills must be assessed and
• partnering activities recognised early.
• a consensus management approach • Site-based productivity-oriented
• a firmly maintained strategic alliance competency-based learning produces
between BMCL, the Building Workers continuous improvement, leading to
Assistance Centre and the then best practice in construction.
Department of Employment Education • Less hierarchical management heightens
and Training ownership of work processes at the
• clearly articulated and achievable workface.
rewards for stakeholder participation • Focusing on subcontractors’ core
• the negotiated learning contract competencies contributes to improved
between TAFE, subcontractors, and productivity.
the trainees • The dynamics of transferring
Subcontractors can improve performance continuous improvement approaches
when their needs are identified and to learning and skill development from
responded to by project managers. one project to the next needs more
study.
Evident best practice • To become a useful tool, benchmarking
• training alliance formation the links between learning and
productivity in the construction
• establishment of resources and systems industry requires further development.
for training
• flexibility of training
• subcontractor development Acronyms used in this case study
• contingency response planning BMCL
• mentoring Barclay Mowlem Construction Limited
• accelerated learning CSDC
• productivity-oriented competency-based Construction Skills Development
training Centre
• neutrality of the training forum
TAFE
• a cultivated learning culture
Technical and Further Education
Conclusions
• Continuous improvement and best
practice in workplace development are
possible where training is aimed at
agreed production goals.
• Partnering creates a climate for learning.

Case study
Waste minimisation
The government has a target of reducing A work program was developed so that:
by 60% the volume of waste transferred to
• most of the spoil from excavation was
landfill by the year 2000. To help achieve
used as backfill in retaining walls; excess
this target the Department of Public Works
spoil was stockpiled on site and is being
and Services has adopted a policy on waste
used for other zoo exhibits
management in design and construction
activities. • construction hoarding life span was
increased through regular maintenance
The aim of the policy is to reduce waste in
so that, after the project, it was able to
new capital works projects managed by the
be stored for reuse on other projects on
site
and encourage material recycling where
practical. • masonry waste (broken blockwork)
was crushed and used as backfill for
Waste reduction has been targeted
retaining walls or as a roadbase
through better project design and
management as well as the introduction • waste timber and steel that
of requirements on contractors to manage accompanied construction, and the
and monitor wastes in the construction waste resulting from packaging and the
process. on-site labour was collected, sorted on
and off-site, and sold to recyclers, and
The policy provides for the application
of waste management requirements during • excess concrete was used as a binding
initial project negotiations and applies layer in water features in the exhibit
to all new projects managed by the itself where possible, or collected and
Department of Public Works and Services forwarded to a recycling centre.
valued at over $500,000, although there is In 1998 eight Department of Public Works
potential for application at a program level and Services projects will proceed to the
in areas such as minor works and major tender phase with requirements upon
maintenance, if environmental benefits contractors to prepare and implement
will result. waste management plans. They include
The new gorilla exhibit at Taronga Zoo health, secondary and tertiary education
commenced site-work with a waste and administrative projects as well as a
management program that was water treatment plant.
implemented and monitored during The gorilla exhibit, as well as the other
construction. On that project, DPWS projects currently underway, will serve
along with the managers of Taronga Park, as models for application of new waste
the Environment Protection Authority, management procedures and performance
and the contractor, Stephen Edwards standards that are expected to be met in
Construction Pty Ltd, developed solutions the design, construction and management
to demonstrate the effective application of public infrastructure and by the
of waste management principles to the construction industry generally.
design, construction and operational/
facility management phases of major
projects.

References
New South Wales Government Security of Payment for Subcontractors,

Capital Works Investment Consultants and Suppliers in the New
Capital Project Procurement Manual South Wales Construction Industry
October 1993 NSW Government Green Paper,
ISBN 0 7310 0964 9 October 1996; ISBN 0 7310 6881 5
New South Wales Government Training for the construction industry

Capital Works Investment in New South Wales: 1997 resource
Total Asset Management Manual directory
November 1993 March 1997; ISBN 0 7310 6823 8
ISBN 0 7310 0914 2
A Perspective of the Construction
New South Wales Government Industry in NSW in 2005
Code of Practice for the NSW Government Discussion Paper,
Construction Industry April 1997; ISBN 0 7310 6887 4
Second edition, July 1996;
ISBN 0 7310 6891 2 Benchmarking Construction
Interim report by the Building Research
New South Wales Government Centre, University of NSW,
Code of Tendering for the September 1997
Construction Industry
Second edition, July 1996; Project Agreement: New South Wales
ISBN 0 7310 6897 1 Code of Practice for the Construction
Industry Process Guidelines
New South Wales Government 1998
Implementation Guidelines for the
Code of Practice and Code of Tendering Information Technology in
Second edition, July 1996; Construction—Making IT Happen
ISBN 0 7310 6802 5 NSW Government discussion paper,
April 1998; ISBN 0 7310 6870 X
OHS&R Management Systems Guidelines
Second edition; ISBN 0 7310 4024 4
References enquiries
C21 Construction Contract Conditions Construction Policy Steering Committee
First edition, November 1996; Level 23, McKell Building
ISBN 0 7310 6869 6 2–24 Rawson Place
Sydney NSW 2000
The Construction Industry in New South
Wales: Opportunities and Challenges phone (02) 9372 8852
NSW Government Green Paper, fax (02) 9372 8851
October 1996; ISBN 0 7310 6887 4 email cpsc@dpws.nsw.gov.au

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New South Wales

Seizing opportunities to build a better construction industry

Construct New South Wales

Cover printed on 100% oxygen-bleached

NSW Government White Paper

Part 1 Strategic vision for the construction industry

Part 2 NSW Government actions

Strategic information for decision making

Business ethics and practices

Construct New South Wales

Management and workforce development

NSW Government White Paper

Construct New South Wales

Encouragement and recognition

Actions: contribution to industry development (matrix) 62

Construct New South Wales represents a framework for strengthening the

(continued next page)

Construct New South Wales 7

THE HON. RON DYER MLC

8 NSW Government White Paper

Construct New South Wales was developed following extensive

The CPSC membership includes representation of:

Input was also provided by the Environment Protection Authority, the

Construct New South Wales 9

Projected construction industry activity1

Construction industry activity

10 NSW Government White Paper

Construct New South Wales 11

The framework—Integrated Development Program

12 NSW Government White Paper

Vision for NSW

NSW Government and

• Improved social and environmental outcomes

• Improved economic competitiveness of NSW by

Construct New South Wales 13

• Current profile of the

• What a responsive construction

14 NSW Government White Paper

1.3% earn $20 million

Construct New South Wales 15

16 NSW Government White Paper

Contribution to economic Demand factors driving

Construct New South Wales 17

18 NSW Government White Paper

Efficient and profitable industry

Environmentally responsible industry

Construct New South Wales 19

Changing client demands Industry structure

20 NSW Government White Paper

Relationships For service providers to present single-

Construct New South Wales 21

3 Merging industry boundaries—single-source solutions

22 NSW Government White Paper

Construct New South Wales 23

Business management Overall, a major shift is needed to alter

24 NSW Government White Paper

10 Value for money

Construct New South Wales 25

Procurement Technological trends

26 NSW Government White Paper

11 Continuous improvement culture

Construct New South Wales 27

14 Critical success factors

28 NSW Government White Paper