The Scheme is aimed at penalising the wilful non-compliance of contractual and legislative obligations relating to delivery of local benefits, employment of apprentices and trainees, employment of Indigenous businesses, workplace health and safety, industrial relations and the security of payment regime. The current draft model sets out a matrix of minor, moderate and major levels of infraction.

The Scheme appears similar to, but more nuanced than, a scheme that was first introduced in Western Australia in October 2015 and then expanded in September 2017.

The Scheme involves a three-step process following the Queensland Procurement Policy (QPP) Compliance Unit being informed of or identifying an infraction. The QPP Compliance Unit investigates the alleged breach and if confirmed, issues a demerit scheme show cause and imposes demerit points. A case study, which was worked through using the current draft model, saw the imposition of demerit points where the supplier failed to provide an acceptable reason for the breach, despite the fact the supplier had rectified the breach in accordance with contractual remedies.

The draft model would work in a similar way to the demerit point system for drivers' licences. Sanctions for future work will be issued where:

• sufficient demerit points are accumulated (currently 20 points);
• a contractor's overall performance is poor (eg. a Department prequalification score of below 40%); or
• for unethical or illegal conduct.

Proposed sanctions for future work may include suspended prequalification or cancelled prequalification making the supplier ineligible for Government tenders. Regulators will also be informed of sanctions (eg. the Queensland Building and Construction Commission and the Department's Building and Asset Services unit).

Questions were raised about options for appeal processes and the suspension or deferral of demerit points pending the outcome of decision-making processes.

The Department stated that it was intended a similar scheme would be rolled out across all Queensland government departments. While the Department did not provide detailed reasons as to why the Scheme is required, the Department stated that the Queensland government would like the ability to prohibit certain suppliers from being engaged in Queensland government work where a supplier caused serious infractions and contractual remedies were not considered sufficient.

The Department welcomed all comments and requested that the industry provide feedback by the end of 2018. The Department noted that if the Queensland government decides to go ahead with the Scheme (which is not anticipated until 2019), there will be further opportunity for industry to provide comments and feedback before implementation.

Feedback can be sent:

• for IAQ members, to the IAQ Economic Enabling Taskforce by no later than COB Tuesday 27 November 2018; or
• directly to the Department