Advice for Australian Government Agencies

Established in 2006, the Scheme requires accredited builders to maintain high standards of work health and safety in order to act as head contractor on Australian-Government funded construction projects that fall within its remit.

It also imposes an obligation on Australian Government agencies to use accredited builders when funding construction projects, subject to financial thresholds and definitions of building work (Section 43(4) of the Federal Safety Commissioner Act 2022).

The OFSC’s Agency Compliance Policy contains more detail on this legislative obligation and how agencies can ensure compliance. 

Government agencies are responsible for assessing if construction projects meet the financial thresholds and building work definitions outlined in the OFSC’s legislation. Please refer to the relevant FAQs below for more information. 

If these thresholds and definitions are met, then the agency must ensure the head contractor is accredited under the Scheme. 

A head contractor is the entity who manages or controls a building site. Their responsibilities including engaging subcontractors and ensuring that all Scheme requirements are met when they are contracted to undertake building work that meets the Scheme thresholds.

The OFSC also recommends that any state and territory governments involved with the project should check to make sure this process is being followed and ensure relevant clauses are included in the contracts.

If you’re unsure if you need to use an accredited builder, we encourage you to reach out to OFSCengagement@dewr.gov.au for assistance. 

Primary responsibility for compliance with the Scheme requirements rests with Commonwealth funding entities. As such, each agency must have appropriate procedures and processes in place to ensure compliance with the Scheme’s requirements.

As operating environments vary across the Australian Government, agencies should adjust their approaches to reflect their individual circumstances. The OFSC’s expectation is that agencies will implement assurance measures to ensure an accredited builder is used when required. Including a clause in a funding agreement or contract is not sufficient. Per the OFSC’s Agency Compliance Policy, steps agencies could take include: 

• Incorporating appropriate due diligence assessments into agency funding and procurement processes, including for third parties
• Incorporating information about the Scheme’s application in funding program guidelines, contracts, or equivalent documents
• Including relevant model clauses in procurement/tender documentation, funding agreements, and contracts

The OFSC’s model clauses are also listed in the Finance procurement clause bank. 

• Reviewing evidence of Scheme compliance prior to contracts which include building work being signed (for example, viewing their accreditation certificate or the accreditation register)
• Including milestone payments in contractual documentation requiring evidence of ongoing Scheme accreditation before payments are released, or
• Regular auditing/management of funding recipients.

There are two different financial thresholds to consider depending on whether a project is directly or indirectly funded by the Australian Government. 

If a project is directly funded and the value of the project is $4 million or more, the head contractor needs to be accredited under the Scheme.

If a project is indirectly funded the head contractor must be accredited under the Scheme if:

• The project includes building work of $4 million or more (including GST) AND
• the value of the Australian Government contribution to the project is at least $6 million (including GST) and represents at least 50 per cent of the total construction project, OR
• the Australian Government contribution to a project is $10 million (including GST) or more, irrespective of the proportion of Australian Government funding.

Directly funded building work is when the Australian Government has responsibility for the project funding and development. 

Examples include a Defence facility, Medicare or Centrelink Office, or a fit-out or refurbishment of existing Australian Government office accommodation.

If the value of the project is $4 million or more, the head contractor needs to be accredited under the Scheme.

For more information, view the OFSC’s direct funding factsheet.

Indirectly funded building work is when the Australian Government financially contributes to a project's total value through a funding agreement, grant or other program.

Examples include road construction projects jointly funded by a state government and the Australian Government, or a new school built by a state government using funding provided by the Australian Government for that purpose.

If a project is being indirectly funded by the Australian Government, the head contractor must be accredited under the Scheme if:

• The project includes building work of $4 million or more (including GST) AND
• the value of the Australian Government contribution to the project is at least $6 million (including GST) and represents at least 50 per cent of the total construction project, OR
• the Australian Government contribution to a project is $10 million (including GST) or more, irrespective of the proportion of Australian Government funding.

The Federal Safety Commissioner Act 2022 and Federal Safety Commissioner (Accreditation Scheme) Rules 2023 define building work for Scheme purposes. Building work means any of the following: 

• construction
• alteration
• extension
• restoration
• repair
• demolition, or
• dismantling 

of any buildings, structures or works that form, or are to form, part of land, whether they are permanent or not. Any of these activities carried out on railways (not including rolling stock) and docks is also building work. 

Building work also means the installation in any building, structure or works of fittings forming, or to form, part of land including: 

• heating
• lighting
• air-conditioning
• ventilation
• power supply
• drainage
• sanitation
• water supply
• fire protection
• security, and
• communications systems

Finally, building work means any operation that is part of, to prepare, or to render complete, any of the building activities listed above, including, for example: 

• site clearance, earth-moving, excavation, tunnelling, or boring
• laying of foundations
• the erection, maintenance or dismantling of scaffolding
• prefabrication of made-to-order components to form part of any building, structure or works either at the main site or an auxiliary or holding site
• site restoration, landscaping and the provision of roadways and other access works

Fixtures such as buildings or structures that house equipment (such as generators, converter stations, or other infrastructure) are classified as building work that requires an accredited builder.

Certain prefabrication works and the transportation or supply of goods are not considered building work under the Scheme. 

For detailed information, please read our dedicated factsheet.

The OFSC maintains a register of all companies accredited under the Scheme. 

This register is filterable and has key information including:

• The states and territories each builder has the capacity to operate in
• The types of building work each builder has the capacity to undertake
• Each builder’s Supply Nation status
• The builder’s website URLs. 

If you are unable to locate details on a particular builder, we'd encourage you to reach out to OFSCengagement@dewr.gov.au for assistance. 

The OFSC’s goal is that everyone working on a government-funded construction site gets home safely, every day. By complying with their obligations and using an accredited builder where required, agencies are directly contributing to this goal. 

The Scheme is the highest standard of construction safety accreditation in Australia and prequalifies builders with most state and territory safety regulators. Accredited companies have less than half the fatality rate of the broader construction industry, a lower rate of Lost Time Injuries, and lower workers compensation premiums. 

For agencies, the benefits of using an accredited builder include: 

• A decreased risk of serious incidents or fatalities on the projects they fund.
• Serious reputational risk is avoided for both individual agencies and the broader Australian Government.
• The Australian Government models the highest standards of safety in construction and encourages innovation.
• The Australian Government has oversight over the projects it’s funding, including serious incident and fatality investigation.

For detailed information, check out our ‘benefits of accreditation’ website page.

The Federal Safety Commissioner Act 2022 allows for ‘joint ventures’ whereby multiple companies establish an unincorporated entity to apply for a government tender, so long as at least one company is accredited. 

Where a joint venture is taking place, the OFSC’s expectation is that an accredited company’s WHS Management System will be nominated and followed on the project. 

A joint venture of only non-accredited companies is not permissible. 

The OFSC has developed dedicated resources on joint ventures. The requirements for a joint venture, including documentation companies need to sign, is available on this page. 

There are obligations that arise under both the OFSC’s legislation and the Indigenous Procurement Policy. 

The OFSC has developed a fact sheet outlining some of these obligations and how it supports procurement officers to meet them. 

The Scheme is not a Procurement or Grant Connected Policy. Instead, it is a legislated requirement. It is important for procurement/grants officers to consider their obligations under the OFSC’s legislation where relevant. 

For more information, view our legislation here.