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The Ethical Supplier Mandate and Ethical Supplier Threshold information has recently been published by the Department of Housing & Public Works.   The Mandate was created by the Queensland Government who is committed to doing business with suppliers who deliver genuine, quality, secure ongoing jobs with fair pay and safe working conditions for Queenslanders.

The Mandate will only apply to contracts that have commenced after 1 August 2019 for the Building Construction and Maintenance Category and for the Transport and Infrastructure Services Category on 1 October 2019.

It will be implemented in a staged fashion, starting with the Building Construction and Maintenance category.  The Scheme will be reviewed progressively and an Implementation Review of the operation of the Mandate will take place by 30 June 2020.

Please find following summary with excerpts extracted directly from the Mandate.  The full Mandate document is available here.

The Ethical Supplier Mandate (the Mandate) outlines the manner in which the Queensland Government will manage instances where a supplier fails to meet a policy requirement.

Please see Supplier Demerit Scheme Diagram on page 4 of the Mandate.

Suppliers may be penalised for breaches by their subcontractors, except where the supplier has taken reasonable action to prevent the breach by their subcontractors.

Demerits can only be applied to a supplier if the contract where the breach occurred came into effect after the Mandate commenced. A supplier’s conduct will be a breach of the Mandate in circumstances where the supplier knows, or ought to know, that the conduct is a breach, and is not due to an honest mistake, oversight or accident.

On receipt of information that a supplier has, or may have, failed to meet a policy requirement, the procuring agency which is party to the contract or arrangement will take steps to:

  • determine whether the failure has occurred, or
  • refer the matter to an appropriate regulator or law enforcement agency.

Where the breach of a policy requirement is referred, no further action will be taken under this Mandate until resolution of the regulatory or law enforcement process. The procuring agency will provide the supplier with an opportunity to respond. This opportunity will be provided prior to making a determination that a supplier has failed to meet a policy requirement.

The procuring agency will advise the Procurement Penalties and Sanctions Committee (the Committee) within five business days of any relevant determination of breach, regulatory sanction, or conviction.

Where demerits have been issued to a supplier, which subsequently ceases to trade, then the Committee may decide to issue the demerits to an entity related to the supplier.

Types of non-compliance are detailed in the table on pages 6-7 of the mandate.

The Queensland Government will, unless it determines otherwise, sanction suppliers once the supplier has received 20 demerits. Sanctions will be determined by the Committee. Sanctions include, but are not limited to:

  • suspending a supplier’s prequalification for a defined period
  • making a supplier ineligible for contract award for a defined period
  • suspending a supplier from the relevant panel or contracting framework for a defined period, and
  • precluding a supplier’s existing contract from being extended.

Where a supplier is registered under the National Prequalification System for Civil (Road and Bridge) Construction Contracts (NPS), the decision of the Committee will be referred to the agency responsible for the administration of that System in Queensland.

A supplier will be given ten business days to respond to allegations of a breach. This will occur prior to a procuring agency determining the supplier has failed to meet a policy requirement.

A supplier will be contacted before demerits are issued and offered ten business days to detail any extenuating circumstances that it would like the Committee to take into account.

Where demerits have been issued to a supplier that subsequently ceases to trade, then the Committee may decide to issue the demerits to an entity related to the supplier.

A supplier can only appeal against the application of demerits or a sanction on the basis that the process was not followed (as outlined in the Mandate) or that it failed to take into account extenuating circumstances provided by the supplier.

The Director-General’s decision will be considered final.

Guidelines and requirements documents are available on the HPW website as follows:-

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