Rather than monthly payments being made from Main Roads directly to the contractor’s regular account, monthly payments are paid into the PBA and funds are directed to the contractor’s regular account and participating subcontractors and suppliers in the supply chain at the same time.

PBAs are intended to:

• Provide a degree of insolvency protection;
• Speed up the payment process for parties lower down in the supply chain;  and
• Increase transparency and accountability in the payment process.

This payment system applies to construction contracts where the tender sum is at or above $1.5 million (including GST), and the contractor will engage one or more subcontractors. The model only applies to first tier subcontractors, not second tier subcontractors.

 How does this affect contracts?

• From 1 July 2019 new Main Roads contracts included the use of PBAs.
• Head contractors are required to:
  • Establish a PBA at the start of the contract.
  • Advise details of eligible subcontractors (contract value >$20,000 (inc. GST))
• Payment claims will include the progress claim for the Contractor, plus a breakdown of payments for subcontractors.

Example Special Conditions for first tier Subcontracts for Project Bank Accounts

New conditions are required to be included in first tier subcontracts for Project Bank Accounts. These conditions will need to refer to PBA payment process and include reference to subcontracts equal to or greater than $20,000 (GST inclusive) and the option of opt-in provisions for other subcontracts, and suppliers of goods and materials only. An example of these Special Conditions is provided for information.