Building Industry Fairness reforms questionnaire · 2 DHPW | Building Industry Fairness Reforms Implementation and Evaluation Panel Instructions Please read each question carefully

Department of Housing and Public Works

Building Industry Fairness reforms – Project Bank Account Reforms

November 2018

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DHPW | Building Industry Fairness Reforms Implementation and Evaluation Panel

Welcome

Thank you for taking the time to answer this survey.

Your feedback counts! By completing this survey you will be helping the Building Industry Reforms Implementation Evaluation Panel (the Panel), review the Building Industry Fairness reforms.

The number of questions you will be asked varies. If you are involved in a project with a project bank account you will be asked more questions.

On average, the questions should take about 15 to 20 minutes to complete depending on your responses.

The new reforms are explained in the attached discussion paper. Please read the discussion paper before answering the questions.

Type the below link into your internet web browser to view the discussion paper: http://www.hpw.qld.gov.au/SiteCollectionDocuments/BIFImplementationEvaluationPanelDiscussionPaper.pdf

Completing the survey is voluntary:

you can choose to answer all or some of the questions;

you can decide to stop at any time; and

you can provide additional comments.

To make sure the collection and analysis of your responses is objective, an independent market research firm, ORIMA Research, has been engaged by the Department of Housing and Public Works and the Panel to conduct the research.

http://www.hpw.qld.gov.au/SiteCollectionDocuments/BIFImplementationEvaluationPanelDiscussionPaper.pdf

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Instructions

Please read each question carefully before you respond.

Where there is a scale in response to the question, select the option on the scale that represents the answer you want to give. For example, if you agree that the PBA general trust account requirements could be improved, you would circle the 'agree' option on the scale, as shown below.

There are also some comment boxes throughout where you can elaborate or comment on specific issues.

You may mail your completed hard copy survey to the below address:

BIF Panel Secretariat PO Box 2457 Brisbane QLD 4001

Alternatively, you can scan and email your completed hard copy survey to [email protected].

For further information

Should you have any technical questions regarding this online form, please contact Qualtrics on 02 8310 8032. Alternatively, if you have any general questions, please contact ORIMA Research on 07 3112 1052 or email [email protected].

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A. Introduction questions

Q1. Before we begin, please state whether or not you wish your feedback is kept confidential?

If you answer NO, your feedback may be published or provided in response to a request for information.

If you answer YES, your feedback will not be published, and we will not provide your feedback to anyone without speaking to you first.

1 Yes

2 No

Q1a Is this the first time that you are completing this survey?

1 Yes

2 No [Please go to Q1b]

Q1b Please state the reasons why you are completing this survey more than once.

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B. Construction industry involvement

This group of questions will help us understand how you are involved in the construction industry and what your experience has been in relation to security of payment. You can skip any question you don’t want to answer.

Q2. Are you involved in the construction industry?

1 Yes

2 No [Please go to the next section C]

Q3. In what part of Queensland is your business predominantly based? Please select 1 option

1 I do not work in Queensland

2 South East Queensland

3 Wide Bay/Burnett

4 Darling Downs/ Western Queensland

5 Central Queensland

6 Mackay/Isaac/Whitsundays

7 North Queensland

8 Far North Queensland

Q4. What is your role in the construction industry? Please select as many options as appropriate

1 Principal / Owner / Developer

2 Head contractor

3 Subcontractor

4 Supplier

5 Sub subcontractor

6 Consultant (e.g. engineer, architect, certifier, quantity surveyor, superintendent)

7 Advisor (e.g. legal, accounting, insolvency)

8 Project manager

9 Industry Organisation

10 Other (please state) ________________________________________________________

Classification: If you classified yourself as either a Head contractor, Subcontractor, Supplier, Sub subcontractor or Consultant, you should consider yourself classified as part of the “CONSULTANT GROUP”. This is important as it will help you complete questions further down the survey.

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Answer Q5 & Q6 if more than one role in the construction industry was selected at Q4.

Q5. Which role do you predominantly take?

1 Principal / Owner / Developer

2 Head contractor

3 Subcontractor

4 Supplier

5 Sub subcontractor



8 Project manager

9 Industry Organisation

10 Other

Q6. Approximately what proportion of your work is in this predominant role? Please estimate to nearest 10%

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Answer Q7 to Q15 if CONSULTANT GROUP (refer to Q4), skip to section C if not CONSULTANT GROUP

Q7. What is the average yearly gross turnover of your business over the past 5 years?

1 Less than $500,000

2 Between $500,000 and $1 million

3 Between $1 million and $5 million



6 Over $50 million

Q8. The next question relates to payments you receive over an average 12 month period:

What percentage of money that you claim and which is not disputed (i.e. you do not dispute how much of the claim is paid even if it is not the full amount claimed) is: Please provide %'s that sum up to 100%

Paid on time or early : _______ Paid 1-2 months late : _______ Paid 2-3 months late : _______ Paid More than 3 months late : _______ Not paid at all : _______

Q9. In relation to retentions, which one of the following applies to you? Please select 1 option

1 My business is not usually subject to retentions

2 Over the past 5 years, my business has always had most or all of its retentions paid

3 Over the past 5 years, my business has not been paid its retentions on less than 5 occasions

4 Over the past 5 years, my business has not been paid its retentions on more than 5 occasions

5 My business gives bank guarantees instead of retentions

6 Other (please state) ________________________________________________

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Q10. What impact has late payment or non-payment had on your business over the last 5 years? Please select as many options as appropriate

1 None – I have not experienced late payment or non-payment at all or very often

2 Insolvency or bankruptcy

3 Increased costs to finance payment to employees and/or suppliers

4 Poor cashflow

5 Unable to pay employees wages or entitlements

6 Unable to pay suppliers on time

7 Costs associated with factoring arrangements

8 Health and family issues


Q11. Over the last 5 years how many times have you lodged an adjudication application?

1 Never

2 Less than 5 times

3 5 times or more

Q12. Over the last 5 years how many times have you commenced legal proceedings to enforce debts due?

1 Never

2 Less than 5 times

3 5 times or more

Q13. Over the last 5 years, how many times have you issued a subcontractors charge under the Subcontractors Charges Act?

1 Never

2 Less than 5 times

3 5 times or more

Q14. Over the last 5 years, how many times have you lodged a monies owed complaint with the QBCC?

1 Never

2 Less than 5 times

3 5 times or more

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Q15. As a result of the BIF Act reforms do you think you would be more likely to make:

Yes No

An adjudication application o o Commence court proceedings to enforce a debt due o o Make a monies owed complaint o o Issue a subcontractor’s charge o o

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C. Project Bank Accounts

This group of questions relates to Project Bank Accounts. You can skip any question you don’t want to answer.

PBA1. Are you involved in a project which has a project bank account (i.e. government building and construction projects excluding engineering projects) valued between $1 million and $10 million (including GST)?

1 Yes

2 No

3 Don't know

Classification: If classified as CONSULTANT GROUP (refer to Q4) and PBA1=Yes, please note you are classified as CONSULTANT GROUP INVOLVED IN PBA. This classification will become clearer as you progress through the survey.

If classified as CONSULTANT GROUP and PBA1=No or Don’t know, please note you are classified as CONSULTANT GROUP NOT INVOLVED IN PBA.

Please answer PBA2 if you answered Yes at PBA1.

PBA2. For the PBA project(s) you are involved in are you a: Please select 1 option

1 Principal

2 Head contractor

3 First tier subcontractor (beneficiary under a PBA)

4 Supplier

5 Sub subcontractor



8 Project manager


PBA3 Are you likely to be involved in project bank accounts under Phase 2 (i.e. building and construction projects excluding engineering projects and residential construction involving less than 3 units) valued over $1 million (including GST)?

1 Yes

2 No

3 Don't know

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Answer PBA3a if CONSULTANT GROUP (refer to Q4), otherwise skip to PBA4.

PBA3a. Approximately how many construction projects (both government and non-government projects) where the head contract value is over $1 million would your business work on over a 12 month period?

1 None

2 1 to 10

3 11 to 30

4 31 to 100

5 More than 100

6 Don't know

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Information received about project bank accounts

The following questions help us understand what information you have received about project bank accounts.

PBA4a. Have you ever received information about project bank accounts?

1 Yes

2 No [Please go to instructions following the heading ‘Attitudes towards project bank account’]

PBA4. What information have you received about project bank accounts? Please select as many options as appropriate

1 I attended an information session held by the Department of Housing and Public Works

2 I read information from the Department of Housing and Public Works

3 I watched an online video by the Department of Housing and Public Works

4 I received information from an industry association, federation or union

5 I received information from the general media

6 I received information from a consultant or professional advisor


8 None of the above

9 I don’t recall where I got my information from

PBA5. On a scale from strongly agree to strongly disagree, how much do you agree or disagree with the following?

The information I received from the Department of Housing and Public Works has helped me to understand how project bank accounts work

1 Strongly agree

2 Agree

3 Neither agree nor disagree

4 Disagree

5 Strongly disagree

6 I have not received any information from the Department of Housing and Public Works

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PBA5i. Please state why you provided that response:

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I think I have a good understanding of how project bank accounts will work

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree

6 Not applicable

PBA6i. Please comment why gave that rating:

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Attitudes towards project bank account

Answer PBA7 to PBA19 if CONSULTANT GROUP INVOLVED IN PBA (refer to PBA1), otherwise skip to PBA20

The following questions are about your experiences with projects that have a project bank account (i.e. PBA projects).

Explanation:

It is intended that project bank accounts will:

provide greater security over money held in trust for the benefit of subcontractors;

result in subcontractors getting paid faster;

increase business confidence in the building and construction industry; and

bring more fairness to the industry.

There are multiple ways, project bank accounts are intended to achieve this. Examples are:

all monies paid by the principal must be paid into the project bank account;

the head contractor must pay its subcontractors that are due to be paid before paying itself;

where there are insufficient funds to pay subcontractors, the head contractor must deposit funds into the trust general trust account to cover the shortfall; and

funds can only be used for that particular project and cannot be diverted to other accounts or projects by the head contractor.

PBA7. Is your business getting paid more of the amount that is claimed in invoices than it did on non-PBA projects that it has been involved in?

1 Yes

2 No

3 Don't know

4 Not applicable

PBA7i. If you answered yes or no, please state what is the difference?

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PBA8. Is the time between issuing an invoice and getting paid quicker than on non-PBA project?

1 Yes

2 No

3 Don't know

4 Not applicable

PBA8i. If you answered yes or no, please state what is the difference?

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Explanation:

It is intended that project bank accounts will improve the likelihood of subcontractors being paid their retentions from head contractors. In a project bank account, the head contractor must pay all retention amounts withheld under a subcontract into the retention trust account.

The head contractor can only withdraw funds from the retention trust account if it is paying:

the subcontractor an amount withheld under its subcontract;

itself to correct defects in the subcontracted work, or to secure the performance of the subcontract;

a payment ordered by a court; or

a payment to another subcontractor engaged by the head contractor to correct defects or omissions in subcontracted work.

PBA9. For the following questions, think about the PBA project(s) you are involved. On a scale from strongly agree to strongly disagree, how much do you agree or disagree with the following statement?

Based on my experience of PBAs so far, retentions being withheld from my business on the PBA project(s) are more likely to be returned when compared to non-PBA projects

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree

6 Not applicable

PBA9i. Please comment why you gave that rating:

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Explanation:

It is intended that project bank accounts will improve the likelihood of subcontractors being paid funds that are in dispute.

In a project bank account, if a payment dispute occurs the head contractor must pay into the disputed trust account the difference between the payment instruction and:

the amount the head contractor proposed to pay in its payment schedule, if the head contractor provided a payment schedule; or

the claimed amount, if the head contractor did not provide a payment schedule.

However, the head contractor is under no obligation to make the above payment if the amount of the payment dispute is more than the contract price for the subcontract. The head contractor can only withdraw funds from the disputed funds trust account if it is paying:

the subcontractor who is a party to the payment dispute;

itself in accordance with the outcome of a dispute resolution process;

another person prescribed by regulation; or

the funds back to the general trust account after:

▪ the dispute resolution process has ended and in accordance with the outcome of thedispute resolution process, if the dispute cannot be appealed;

▪ the appeal process has been completed or the time period to lodge an appeal if noappeal is made; or

▪ 60 days after the subcontractor is notified that the money has been transferred into thedisputed funds trust account, if the dispute is not referred to a dispute resolution process.

PBA10. For the following questions, think about the PBA project(s) you are involved.

On a scale from strongly agree to strongly disagree, how much do you agree or disagree with the following statements?

Based on my experience of PBAs so far, disputes about amounts claimed are more likely to be able to be recovered when compared to non-PBA projects

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree

6 Not applicable

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PBA10i. Please comment why you gave that rating:

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I am satisfied with the level of reporting that I am receiving from the head contractor

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree

6 Not applicable

PBA11i. If you answered strongly disagree or disagree, please state why:

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Explanation:

It is intended that project bank accounts will increase the transparency and accountability in the payment process.

With a project bank account, the principal has information about the accounts and:

must be provided with the ability to view transactions;

must be given written notice for all payments and withdrawals to and from the PBA; and

is required to ensure payments are made only to the correct accounts of the subcontractor beneficiaries.

There is a mandatory obligation on the principal to report any discrepancies in the project bank account to the QBCC.


I am satisfied with the level of reporting that I am required to undertake as a head contractor

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree

6 Not applicable


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I am satisfied with the level of transparency the Principal is given to view transactions in the PBA

1 Strongly agree

2 Agree


4 Disagree

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5 Strongly disagree

6 Not applicable


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I have a good understanding of which contractors are first tier subcontractors and need to be beneficiaries of the PBA - (i.e. they need to receive payments directly from the PBA general trust account)

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree

6 Not applicable


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If I have not understood something about the PBA and I have asked the Principal, usually they have been able to answer my question

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree

6 Not applicable

PGA15i. If you answered strongly disagree or disagree, please state why:

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If I have not understood something about the PBA and I have asked the Department of Housing and Public Works, usually they have been able to answer my question

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree

6 Not applicable

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Explanation

Project bank accounts are intended to increase certainty of payment for subcontractors. It is predicted that this may have the effect of subcontractors charging less for the same work on a project bank account subcontract as they have more confidence of being paid.

PBA17. The amount my business has quoted or will charge for work on PBA projects my business is involved in has changed compared to similar non-PBA projects as follows: Please select 1 option

1 My business has not changed the amount I am charging on PBA project(s)

2 Decreased by approximately what % per project (please state %) ________________________________________________

3 Increased by approximately what % per project (please state %) ________________________________________________

4 Other

Explanation

It is anticipated that there may be additional business costs associated with project bank accounts, such as obtaining advice on obligations/duties, bank fees, systems and administration costs.

PBA18. On the PBA projects(s) my business is involved the administration costs for these PBA projects have changed compared to similar non-PBA projects as follows: Please select 1 option

1 My business’s administration costs have not changed for PBA project(s)

2 Decreased by approximately what % of my business’s project costs (please state %) ________________________________________________

3 Increased by approximately what % of my business’s project costs (please state %) ________________________________________________

4 Other ________________________________________________

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PBA19. I expect the introduction of PBAs to cause my business’s annual business financing costs to change as follows: Please select 1 option

1 My business’s annual business financing costs are not expected to change

2 Decreased from previous year by approximately what % (please state %) ________________________________________________

3 Increased from previous year by approximately what % (please state %) ________________________________________________

4 Other

PBA19. Comment:

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D. How PBA could be improved

The next series of questions are designed to help us understand how you think project bank accounts could be improved.

PBA20. Which of the following activities carried out by the Department of Housing and Public Works or QBCC would you find useful before Phase 2 commences? Please select as many options as appropriate

1 Guidelines

2 Fact sheets

3 Checklists

4 Webinars

5 Seminars

6 Helpline

7 Other

PBA20i. Comment:

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The PBA - general trust account requirements could be improved

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree

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PBA21i. Please state the reasons why you have agreed or disagreed:

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The PBA - retention trust account requirements could be improved

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree


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The PBA - disputed funds trust account requirements could be improved

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree


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The obligations on the principal to review transactions in the PBA could be improved

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree


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The obligations on the Principal to report some anomalies to the QBCC could be improved

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree


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The time allowed to open a PBA could be improved (currently the head contractor has 20 business days to open a PBA)

1 Strongly agree

2 Agree


4 Disagree

5 Strongly disagree


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PBA27i. Are there any other comments you would like to make about the ways to improve the requirements for project bank accounts before the commencement of Phase 2?

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E. Economic impacts

Answer below questions if CONSULTANT GROUP (refer to Q4), otherwise skip to next section

The next series of questions are designed to help us understand what economic impacts you consider that project bank accounts have or could have.

On a scale from strongly agree to strongly disagree, how much do you agree or disagree with the following?

Strongly agree

Agree Neither

agree nor disagree

Disagree Strongly disagree

PBA28 The introduction of project bank accounts has/will give me confidence to invest in

my business o o o o o

PBA29 The introduction of project bank accounts has/will

give me confidence to grow my business

o o o o o PBA30 The introduction of

project bank accounts has/will give me confidence to employ

more staff o o o o o


help me to improve the financial management of my

business

o o o o o


make it easier for me to manage my business finances

o o o o o PBA33 The introduction of project bank accounts will

make it easier to manage my cash flow

o o o o o PBA34 I will try to avoid

projects where a project bank account is required o o o o o

PBA34i. Comment:

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Answer below PBA33 to PBA36i if CONSULTANT GROUP NOT INVOLVED IN PBA (refer to PBA1), skip to next section if CONSULTANT GROUP INVOLVED IN PBA

Explanation

Project bank accounts are intended to increase certainty of payment for subcontractors. It is predicted that this may have the effect of subcontractors charging less for the same work on a project bank account subcontract as they have more confidence of being paid.

PBA33. The introduction of project bank accounts will decrease the amount I will charge clients or head contractors in the future by: Please select 1 option

1 PBAs won’t decrease the amount I charge

2 less than 1%

3 1% to 3%

4 Greater than 3%


PBA33i. Comment:

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Explanation

It is anticipated that there may be additional business costs associated with project bank accounts, such as obtaining advice on obligations/duties, bank fees, systems and administration costs.

PBA34. The introduction of project bank accounts will increase my business administration costs for each project by: Please select 1 option

1 PBAs won’t increase my business costs

2 Up to 1% of project costs

3 1% to 3% of project costs

4 Greater than 3% of project costs


PBA34i. Comment:

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PBA35. The introduction of project bank accounts will increase my annual business financing costs: Please select 1 option

1 PBAs won’t increase my financing costs

2 Up to 2% increase on current financing costs

3 2% to 5% increase on current annual financing costs

4 More than 5% increase on current annual financing costs


PBA35i. Comment:

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F. Other comments

In closing, do you have any other general comments you would like to make about project bank accounts?

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This survey has been focused on the reforms relating to project bank accounts. If you would like to make submission to the BIF Panel about any of the other reforms referred to in the discussion paper, please go to page 4 of the discussion paper to find out how.

Thank you again for your participation in the survey. Your assistance is very much appreciated.