New Scheme for Developers and Builders to be Publicly Rated

As part of the NSW Government’s “Construct NSW” strategy, the Independent Construction Industry Ratings Tool (‘ICIRT’) has been introduced to assess construction professionals against a series of criteria. ICIRT is intended to assist consumers and construction industry stakeholders to identify construction professionals with a strong reputation.

How does the ICIRT work?

The ICIRT allocates an overall star rating to construction professionals. Ratings range from 0 to 5 stars, whereby 0 stars applies to professionals who have not been rated and 5 stars applies to those professionals deemed trustworthy or likely to deliver a reliable outcome.?

In addition to the overall star rating, indicators of gold, silver and bronze are given for the following 6 assessment criteria:

• Character (considers the trustworthiness of the business and key persons)
• Capability (considers the tenure and trading history of the business, its track record on previous projects, insurance and claims history)
• Conduct (considers past conduct of the business, court judgements including pending litigation, industrial disputes, payments to employees and subcontractors)
• Capacity (considers the business solvency and project pipeline of business and its capacity to meet commitments)
• Capital (considers the capitalisation and funding sources of business, funding facilities and borrowing capacity)
• Counterparties (considers the exposure of business to parties across broader supply chain)

Only those professionals with an ICIRT rating of 3 gold stars or higher will be included on the public ICIRT register.

Who does the ICIRT apply to?

The ICIRT is presently limited to developers, builders, and certifiers of class 2 buildings. However, it is likely that ICIRT will soon be expanded to other residential developments and other construction industry professionals, such as designers, manufacturers, and supplies.

Impact

Although the ICIRT is presently voluntary, it may become mandatory for construction professionals to become rated. Nonetheless, it is a useful tool to deliver transparency and accountability across the industry and for consumers and construction industry stakeholders, including financiers, insurers, legal and professional advisers, to identify trustworthy professionals.