9 January 2023
Increase to the Public Works Committee medium works threshold
The lower threshold for proposed public works that must be notified to the Public Works Committee (‘medium works’) has increased from $2 million to $5 million with effect from 1 January 2023.
Background
The Public Works Committee Act 1969 (Cth) (the Act) governs the referral of ‘public works’ to the Parliamentary Standing Committee on Public Works (the Committee). Public works include most architectural, engineering and construction (including building fit-out) works undertaken by or for most Commonwealth entities and companies.
Under the Act, public works:
- with an estimated cost in excess of $15 million (ex GST), or
- for defence purposes, with an estimated cost in excess of $75 million (ex GST),
must be referred to the Committee, reported to Parliament, and approved by the House of Representatives as ‘expedient’ before they can commence (including being contracted for).
The PWC Procedure Manual also requires, as a long-standing practice supported by successive Committees and finance ministers, that certain lower value public works (referred to as ‘medium works’) be notified to the Committee. Medium works should not be commenced before the Committee has given its approval.
Change to the lower threshold for medium works
With effect from 1 January 2023, the lower threshold for a public work to be a medium work has increased from $2 million to $5 million (ex GST). This means that public works with an estimated cost of between $5 million and $15 million (ex GST) must be notified to and approved by the Committee to proceed as a medium work before the work can commence.
For public works for defence purposes, the medium works upper threshold is higher, and medium works include works estimated between $5 million and $75 million (ex GST).
This increased lower threshold will be reflected in an updated version of the PWC Procedure Manual.
Next steps for Commonwealth entities
In the following table, we outline some general guidance for dealing with public works that are newly proposed, currently before the Committee, or already approved.
|
Status of public work |
Recommended approach |
|
Newly proposed |
If the estimated cost of a public work (other than for defence purposes) is:
If a public work is for defence purposes, then the following thresholds/requirements apply:
|
|
Currently before the Committee |
If the estimated cost of a public work is below $5 million, the Committee’s approval is no longer required, but the project should be monitored in case it reaches or exceeds the $5 million threshold. If it does, the Committee should be notified. If the estimated cost of a public work is a higher value, the current Committee process should be followed – medium works notification for projects between $5 million and $15 million ($75 million for defence purposes), and Committee referral for projects above these thresholds. |
|
Already approved |
If the estimated cost of a public work was below $5 million and it was approved as a medium work, the project should be monitored in case it increases above the $5 million threshold. If it does, the Committee should be notified of the increase. If a medium work was approved with a value below $5 million, and the cost increases but remains below the $5 million threshold, then further notification to the Committee is not required. Projects valued above $15 million (or $75 million for defence purposes) which have already received Parliamentary expediency are not affected by these changes. |
Further Information
Further information on the process for notifying the Committee is available:
- in the PWC Procedure Manual, available on the Committee’s website
- by contacting the PWC secretariat at pwc@aph.gov.au or 02 6277 4636, particularly in relation to the hearing and notification process
- via the Department of Finance at PublicWorks@finance.gov.au, particularly in relation to the referral of Public Works and seeking exemptions.
AGS can also provide advice on the application of the Act to a specific project, which notification and approval requirements would apply to that project, and the structuring and drafting of procurement documentation.
Contacts
Senior Executive Lawyer
Deputy General Counsel and Property Practice Leader Commercial
Important: The material in Express law is provided to clients as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this message.