A new financial year often means the coming into effect of new government policy. Relevant to the tendering process, this year two new Procurement Connected Policies (PCP) came into effect on the 1st of July 2024. These policies introduce new tendering requirements that aim to address government’s push towards environmental sustainability and to improve skills shortages across the construction industry. Key implications of these policies are outlined below:

Environmental Sustainability

The Environmentally Sustainable Procurement (ESP) Policy and Reporting Framework aims to reduce the environmental impact of Australian Government construction procurements valued at over $7.5 million. Projects will be assigned a ‘rating’ which will dictate the level of compliance, reporting etc. required in a tender response. The basic premise is that government is seeking solutions that address 3 key areas:

• Climate: Minimise greenhouse gas emissions

• Environment: Minimise impact on the environment

• Circularity: Retain their value over life

Government is looking for tenderers to showcase innovation and design solutions that form an integral part of each outcome.

As part of tender responses, suppliers will need to fill out a Supplier Environmental Sustainability Plan (SESP). This will include questions addressing how the supplier will optimise environmental sustainability impacts in their proposal and the delivery of goods or services being procured as well as outline reporting requirements.

Australian Skills Guarantee

The Australian Skills Guarantee Policy aims to utilise Government investment in construction and Information Communication Technology (ICT) projects greater than $10million to grow the next generation of skilled workforce and address the gender imbalance.

The Policy introduces new national targets for apprentices, trainees, and paid cadets working on major Australia Government funded projects as follows:

• Overarching apprentice target: a minimum of 10% of all labour hours to be undertaken by apprentices/trainees.

• Overarching apprentice target for women: a minimum of 6% of all apprentice/trainee labour hours to be undertaken by women.

• Trade-specific apprentice target for women: a minimum of 4% of trade apprentice/trainee labour hours to be undertaken by women.

The Australian Skills guarantee also applies to ICT projects greater than $10 million, where targets for apprentices, trainees, cadets and women will be negotiated on a project-by-project basis.

Potential suppliers will be required to make a declaration if they are able to meet the Australian Skills Guarantee Policy, in addition to providing estimated total labour hours, and the percentage of labour hours to be undertaken by apprentices, cadets, trainees, and women. Flagship construction projects must also identify a gender equality action plan.

These policies only apply to new contracts placed after 1 Jul 24. If you are working on a tender subject to these new policies and require assistance, contact us.