The Fair Work Principles have set two requirements for all procurements above the monetary thresholds in the Commonwealth Procurement Rules (CPRs):

  • compliance with the Fair Work Act (the Act) must be a condition for participation, and
  • tenderers must include a declaration of compliance as part of their tender.

With the Principles being revoked from 1 July 2014, it is time for agencies to ensure they understand how current and future tender processes will be affected.

With these requirements being removed, agencies will need to make adjustments to all affected procurement templates, and consider how to deal with procurement activities that cross over the revocation date. Agencies should also contact the Department of Employment for advice on transition arrangements.

Tenders set to close before 1 July 2014

Procurements in this category, which are subject to the Principles, should have included compliance with the Act as a condition for participation and set completion and submission of a declaration of compliance with the Act as a minimum content and format requirement.

To ensure compliance with the CPRs, any condition for participation or minimum content and format requirements relating to Fair Work that have been included in a procurement process set to close before 1 July 2014 should typically be enforced.

Tenders commenced before 1 July 2014 closing on or after 1 July 2014

There will be a number of current tender processes with closing dates on or after 1 July 2014. Where the requirements of the Fair Work Principles have been included in the tender documentation, we recommend seeking probity advice before making a decision about whether to exclude a supplier on the basis of failing to meet such a condition or requirement, to ensure the decision is appropriate in all the circumstances.

If there is sufficient time, Commonwealth agencies with open tender processes may wish to consider issuing an addendum removing requirements arising solely from the Fair Work Principles such as providing a declaration of compliance with the Act, to reduce the administrative burden on both tenderers and the agency's staff.

Tenders commencing after 1 July 2014

Although it will no longer be a requirement to include compliance with the Act as a condition for participation, agencies will be free to include such a condition if they wish (noting that the Act continues to apply to all suppliers regardless of whether it is specified as a condition for participation).

However, a Fair Work declaration will no longer be required and should be removed from all procurement templates. Draft contracts may also be affected by the revocation of the Principles. Most Commonwealth template contracts and Deeds of Standing Offer currently include the model clauses set out in the Fair Work Principles User Guide regarding compliance with the Principles, and these clauses may now be deleted for contracts signed on or after 1 July 2014.

Existing contracts

There is no need to amend most existing contracts, but agencies should note that any provision requiring compliance with the Fair Work Principles will no longer have effect.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.