The document discusses compliant payment processes for managing contractor contracts in Queensland. It outlines a current non-compliant process and proposes improvements to align it with the Building Industry Fairness (Security of Payment) Act 2002 (BCIPA). The proposed process increases timelines to evaluate and pay subcontractors' claims from 5 to 28 business days and managing contractor claims from 5 to 31 business days. It also addresses issues around subcontract payment schedules and inclusion of variations in payment claims.

1. thepower tool .com.au When “payment really matters” BCIPA Compliant Payment Process for Queensland Government Managing Contractor Contracts

2. thepower tool .com.au When “payment really matters” Days >> 7 17 22 25 5 15 Latest date for adjudication application 25 5 business days to evaluate and agree subcontractors claims Payment schedule pre-agreed 5 business days to evaluate and agree managing contractor claim How it is 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Head Contract Payment Reference Date Preparation Payment Claim Evaluation Payment Schedule Payment terms Due Date for Payment Pay Subcontractors Subcontract Payment Reference Date Preparation Payment Claim Evaluation Payment Schedule Payment terms Due Date for Payment Informal Pre-estimate 5 Formal 10 (no evaluation) Payment terms - No evaluation or negotiation Formal 10 (no evaluation) Informal Pre-estimate 5 Payment terms - No evaluation or negotiation

3. thepower tool .com.au When “payment really matters” Days >> 7 17 22 25 5 15 Latest date for adjudication application 25 5 business days to evaluate and agree subcontractors claims Payment schedule pre-agreed 5 business days to evaluate and agree managing contractor claim How it is Risk: This process does not comply with the BCIPA with respect to reference dates and pre-estimating payment claims 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Head Contract Payment Reference Date Preparation Payment Claim Evaluation Payment Schedule Payment terms Due Date for Payment Pay Subcontractors Subcontract Payment Reference Date Preparation Payment Claim Evaluation Payment Schedule Payment terms Due Date for Payment Informal Pre-estimate 5 Formal 10 (no evaluation) Payment terms - No evaluation or negotiation Formal 10 (no evaluation) Informal Pre-estimate 5 Payment terms - No evaluation or negotiation

4. thepower tool .com.au When “payment really matters” Days >> 12 22 28 31 6 16 31 Latest date for adjudication application 26 How it could be 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Head Contract Payment Reference Date Preparation Payment Claim Evaluation Payment Schedule Further negotiation Due Date for Payment Pay Subcontractors Subcontract Payment Reference Date Preparation Payment Claim Evaluation Payment Schedule Further negotiation Due Date for Payment Informal 5 7 Formal 10 28 business days (36 calendar days) to prepare, evaluate and pay subcontractors Informal (inspections, audit etc.) 12 Informal 6 Formal 5 Formal evaluation 10 31 business days (42 calendar days) to evaluate and pay subcontractors Informal (inspections etc.) 6 Informal 10 - 15

5. thepower tool .com.au When “payment really matters” Days >> 12 22 28 31 6 16 31 Latest date for adjudication application 26 How it could be Issue: Subcontract payment schedules must be served before the head contract payment schedule. This is not consistent with the intent of the contract. Resolution: Client QS countersigns subcontract payment schedules. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Head Contract Payment Reference Date Preparation Payment Claim Evaluation Payment Schedule Further negotiation Due Date for Payment Pay Subcontractors Subcontract Payment Reference Date Preparation Payment Claim Evaluation Payment Schedule Further negotiation Due Date for Payment Informal 5 7 Formal 10 28 business days (36 calendar days) to prepare, evaluate and pay subcontractors Informal (inspections, audit etc.) 12 Informal 6 Formal 5 Formal evaluation 10 31 business days (42 calendar days) to evaluate and pay subcontractors Informal (inspections etc.) 6 Informal 10 - 15

6. thepower tool .com.au When “payment really matters” New subcontract provisions 1) it is acknowledged by the parties that the process for payment under the head contract requires the head contractor to amalgamate the payment claims of trade contractors and suppliers of related goods and services for processing and submission to the Principal for evaluation and payment. Trade contractors and suppliers of related goods and services must commit to serving payment claims on the managing contractor in sufficient time to effect the head contract payment process. The trade contractor shall submit a payment claim within 5 business days of the reference date for the current claim period. If the trade contractor does not serve a payment claim on the managing contractor by the due date for service of a payment claim, or does not make a request for an extension of time, in writing, it is deemed that the trade contractor does not require a progress payment for the period. 2) The managing contractor shall submit a payment claim within 7 business days of the head contract reference date for the current claim period. 3) Variations to be included for payment in a payment claim must be submitted for agreement at least 10 business days before the reference date of the payment claim. Variations that have not been submitted for agreement shall be deemed not to be variations agreed between the parties for the purposes of the Act. Variations not agreed shall be carried forward for agreement before the following payment claim. © These diagrams and the process it represents are the copyright of John Lowry and Lowry Consulting Pty Ltd. It shall not be adopted, copied or used without the prior written consent of the author.