27.2.3  Terms and conditions of material sub-contracts

(a)  Each material sub-contract must include:92

(i)  a covenant requiring entry into a side deed (if requested by government) and for the assignment, at government's option, of the benefit of the material sub-contract to government if the project agreement is terminated;

(ii)  provisions recognising and permitting government to exercise its Step-in Rights and any of its rights arising as a result of a default or other event giving rise to the government's Step-in Rights; and

(iii)  a provision requiring sub-contractors to comply with all relevant laws.

(b)  In addition, the main construction and operating contracts must include93:

(i)  an undertaking from the sub-contractor to rectify any defects;

(ii) an undertaking from the sub-contractor to provide such bonds, guarantees, warranties and manuals as are required by the private party;94 and

(iii)  provisions which give full effect to the provisions of the project agreement relating to intellectual property and moral rights.

_______________________________________________________________________________
92 These reflect government's minimum requirements and are not intended to be an exhaustive list of material sub-contract requirements. Additional requirements or amendments to the requirements may apply on a project by project basis.

93 Where a Commonwealth agency is involved, the main construction and operating contracts must include a warranty that the contractor has not had a judicial decision against them (not including decisions under appeal) relating to employee entitlements and have not paid the claim.

94 Bonding and guarantee requirements must at a minimum reflect government requirements under the project agreement in respect of the relevant sub-contract.