❓ Hon. Martin Pritchard asks about penalty clauses in Treasury-managed major strategic project contracts. The Attorney General, representing the Treasurer, clarifies that while there are no 'penalty clauses', contracts contain liquidated damages provisions or operating term reductions for contractor delays.
AnsweredQoN 933Legislative Council
Asked
13 September 2016
Member
Portfolio
Attorney General representing the Treasurer
QuestionView source ↗
TREASURY — MAJOR STRATEGIC PROJECTS — PENALTY CLAUSES
933. Hon MARTIN PRITCHARD to the Attorney General
representing the Treasurer:
I refer to major strategic projects
managed by Treasury.
(1) Do the
contracts for any of these projects contain penalty clauses; and, if so, which
projects?
(2) If yes to
(1), for each project —
(a) is there a penalty
clause for failure to meet specified deadlines; and, if not, why not; and
(b) what is the
dollar value for each penalty?
933. Hon MARTIN PRITCHARD to the Attorney General
representing the Treasurer:
I refer to major strategic projects
managed by Treasury.
(1) Do the
contracts for any of these projects contain penalty clauses; and, if so, which
projects?
(2) If yes to
(1), for each project —
(a) is there a penalty
clause for failure to meet specified deadlines; and, if not, why not; and
(b) what is the
dollar value for each penalty?
AnswerView source ↗
On behalf of the Treasurer, I thank the honourable member for
some notice of the question.
(1) None of
the major capital works contracts managed by the Department of Treasury's
Strategic Projects and Asset Sales business unit contains penalty clauses. It
is assumed that the question is in fact directed at relevant provisions
enabling the state to recover costs incurred as a result of contractor delay.
All the major capital works contracts managed by SPAS contain provisions of
this nature, which take the form of, for publicly funded projects, the
application of liquidated damages whereby a pre-estimated daily rate applies
for each calendar day of delay caused by the contractor; or, for public–private
partnerships, a reduction in the operating term of the contract equal to the
length of the delay caused by the contractor, with a consequent reduction in
the contractor's payment entitlement and/or capacity to earn revenue,
in the latter case effectively transferring the revenue entitlement to the
state.
(2) (a) As
above; it is assumed that the question is directed at liquidated damages
provisions.
(b) Liquidated
damages are calculated for each relevant SPAS contract, reflecting the pre‑estimated
costs incurred by the state by way of contractor-caused delay under the
particular contract in question. The liquidated damages daily rates included in
SPAS contracts to date range from $7 000 to $220 000.
some notice of the question.
(1) None of
the major capital works contracts managed by the Department of Treasury's
Strategic Projects and Asset Sales business unit contains penalty clauses. It
is assumed that the question is in fact directed at relevant provisions
enabling the state to recover costs incurred as a result of contractor delay.
All the major capital works contracts managed by SPAS contain provisions of
this nature, which take the form of, for publicly funded projects, the
application of liquidated damages whereby a pre-estimated daily rate applies
for each calendar day of delay caused by the contractor; or, for public–private
partnerships, a reduction in the operating term of the contract equal to the
length of the delay caused by the contractor, with a consequent reduction in
the contractor's payment entitlement and/or capacity to earn revenue,
in the latter case effectively transferring the revenue entitlement to the
state.
(2) (a) As
above; it is assumed that the question is directed at liquidated damages
provisions.
(b) Liquidated
damages are calculated for each relevant SPAS contract, reflecting the pre‑estimated
costs incurred by the state by way of contractor-caused delay under the
particular contract in question. The liquidated damages daily rates included in
SPAS contracts to date range from $7 000 to $220 000.
Explore WA Government Data
Search the full archive in the free dashboard, or query programmatically via API.
Explore more
Government Gazette
Appointments, regulatory notices, planning changes.
Hansard
Debates, questions, speeches and sentiment.
Tabled Papers
Reports and documents tabled in Parliament.
Committees
Committee profiles and recent reports.
Regulations
Subsidiary legislation with filters and summaries.
Bills
Proposed laws and parliamentary progress.
Acts
Current WA legislation and summaries.
Explanatory Memoranda
Bills with EMs (text/PDF) available.
Members
MP profiles, party breakdown and rankings.
Pollie Rankings
Data-driven rankings across 19 categories.
Amendment Chains
Track how schemes and regulations evolve over time.