As part of reforms to government construction procurement, Project Bank Accounts (PBAs) are being trialed on selected government construction projects. PBAs are an alternative payment mechanism through which payments from a principal are made directly and simultaneously to the head contractor and participating subcontractors. The fundamental difference between a PBA and a normal bank account is that the PBA has trust status providing additional protections for subcontractor moneys.
PBAs have a number of benefits including:
- higher level of protection for project moneys in the event of the insolvency of the head contractor or from funds being used for other purposes
- faster payment processes
- increased transparency and accountability in the payment process.
Costs and benefits, including the effectiveness of PBAs in protecting subcontractor moneys, will be assessed during the trial. Industry stakeholders will be invited to provide input into this process.
Information on PBAs will be part of tender documents released by participating agencies. Tenderers should contact the participating agency direct on any issue relating to the tender process.
If you would like to know more about PBAs, please view the fact sheets below:
The Department of Finance, Services and Innovation (DFSI) is helping participating agencies by holding information sessions for tenderers and providing general advice on the contract documentation. Representatives from the responsible agency and DFSI are available to discuss the operation of PBAs and answer questions.