“THE CONSTRUCTION MATERIAL PROCESSORS ASSOCIATION INITIATES CONTRACTUAL BEST PRACTICES FOR SUPPLY AGREEMENTS”

The CMPA is currently undertaking a major project to create an industry “Contract for the Supply of Materials for Major Works”. 

This initiative will be the first launch of an all-encompassing document to create the best possible supply and payment practices available to our industry.

The project is being undertaken for the same reasons that the Housing Industry created its standard form contract some 30 years ago, that is to ensure best practices for its segment of the construction industry.

The project is designed to enable CMPA members and others within the industry to have consistency of documentation when entering into agreements concerning projects with a supply value in excess of $20,000. It is envisaged that a minor contract document will be created after the initiation of this project. 

The members would be aware that our industry is generally not in a direct contractual relationship with the principal on major projects. This has led to some aspects of specifications and compliance being passed unfairly from the contractor to the supplier.

The CMPA has had concerns that suppliers are entering into agreements that compromise their management’s due diligence obligations. This initiative will address the immediate need to clarify a number of aspects concerning supply. The aim is for suppliers to be sure they can achieve compliance with specifications and regulations that they can reasonably be expected to meet.

The second reason for this initiative is to create a contractual environment ensuring contractors to major projects (especially to Government and Local Government funded projects) fulfil their financial responsibilities to suppliers.  Members have been concerned that in some instances contractors have not carried out their financial responsibilities and the principals have not provided a remedy for the suppliers concerned. 

The CMPA, in conjunction with the Extractive Industry Association of Victoria, is liaising with Vic Roads as a major principal. The Civil Contractors Federation (CCF) is also being consulted in the development process.  Pre-existing documentation from

VicRoads and aspects of the “Security of Payment Act (2002)” are being incorporated into the document.

The CMPA will to continue to advise members on its progress.

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