Page 1481 - Week 06 - Tuesday, 1 May 1990

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ANSWERS TO QUESTIONS

MINISTER FOR FINANCE AND URBAN SERVICES

LEGISLATIVE ASSEMBLY QUESTION

Government Contracts

QUESTION NO. 120

Ms Follett - asked the Minister for Finance and Urban Services: on 3 April 1990:

(1) Can the Minister confirm that some contractors on ACT Government projects have failed to pay subcontractors in a timely manner.

(2) Does this constitute a breach of the head contract.

(3) Is.the financial viability of contractors investigated thoroughly prior to the awarding of contracts.

Mr Duby - the answer to the Members question is as follows:

(1) It is a fact that some contractors on ACT Government projects have not paid subcontractors in a timely manner.

This practice unfortunately does occur within the construction industry for a number of reasons, primarily because of the Head Contractors restricted cash flow, and is not restricted to government contracts.

(2) No. Except in the case of a Nominated Subcontractor and it is not the current practice to nominate subcontractors.

(3) The size of a project will govern the extent of financial assessment. All successful tenderers over $200,000 are investigated. Lesser tenderers receive only cursory investigation unless:

a. doubt exists as to the tenderers financial

capacity; or

b. current workload of tenderer is high in relation to. previous periods; or

c. current annual turnover of lenders expected to be substantially greater than previous years and detailed financial information had not been previously obtained.

1481

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