Construction Government Tenders: The 2026 Landscape

Last Updated on 12/03/2026 by Damin Murdock

In the building and construction industry, winning construction government tenders is increasingly about more than price. Many government and government-funded procurement processes require construction tenderers to demonstrate strong compliance systems and a track record of meeting workplace and safety obligations.

Recent reforms have also changed the regulatory environment. In particular, the Fair Work Ombudsman (FWO) now performs the Fair Work Act enforcement functions that were previously carried out by the ABCC for the commercial building and construction industry, following the transfer of functions from 10 November 2022 and the ABCC’s abolition from 6 February 2023.

1. Compliance issues commonly relevant to government tendering

Tender requirements vary by project, funding source and jurisdiction. However, for many government-funded projects, tenderers should expect scrutiny of the following areas:

Work health and safety (WHS)

Some Australian Government funded building work requires head contractors to hold accreditation under the Australian Government Building and Construction WHS Accreditation Scheme administered by the Office of the Federal Safety Commissioner (FSC/OFSC).

This accreditation is not required for all federally funded projects and is generally tied to project type/value thresholds and scheme rules.

Accreditation focuses on having and implementing an appropriate WHS management system that meets audit criteria.

Fair Work Act 2009 (Cth) compliance

The Fair Work Act 2009 (Cth) regulates minimum employment standards and a wide range of workplace obligations. In the commercial building and construction industry, the FWO is now the regulator responsible for enforcing the Fair Work Act functions previously performed by the ABCC.

Sham contracting risk

Misrepresenting employment as independent contracting (and related “sham arrangements”) remains a key enforcement risk area, particularly where contractor models are used at scale.

Migration / work rights compliance

Employers can face significant penalties for allowing non-citizens to work without the right to work (or in breach of visa conditions).

Government guidance emphasises that these obligations apply even where workers are sourced through recruitment or labour hire arrangements.

2. Sham contracting: the “Closing Loopholes” defence has changed

A major practical change from the “Closing Loopholes” reforms is the shift in the defence to sham contracting allegations.

Summaries of the reforms describe the defence as moving from a subjective “didn’t know / wasn’t reckless” concept to a more objective test requiring the employer to prove it reasonably believed the arrangement was an independent contracting arrangement at the time of the representation.

Important: penalty maximums depend on the specific contravention, whether it is characterised as a “serious contravention”, and the applicable penalty unit value at the time. For that reason, it is safer not to state fixed maximum dollar figures in a general article unless they are tied to the current statutory tables and penalty unit value.

3. Dispute analysis: personal (accessorial) liability remains a real risk

The FWO continues to pursue individuals (including directors and managers) where they are alleged to have been “involved in” contraventions (often described in practice as “accessorial liability”). This is a well-established enforcement approach and is particularly relevant where underpayments are systemic or where there is evidence of deliberate non-compliance.

Case example: Henna Group (reported outcome)

Public reporting of the Henna Group matter indicates that the company was fined $160,000, and that the company’s director and a manager were each fined $30,000 in relation to underpayments.

Practical point: personal exposure is not limited to “piercing the corporate veil” scenarios; it can arise directly under statutory provisions imposing liability on individuals involved in contraventions.

Key takeaways for 2026 tenders and audits

• Expect increased scrutiny of workplace compliance in commercial construction, with the FWO now performing the ABCC’s former Fair Work Act enforcement role for the sector.
• WHS accreditation through the FSC/OFSC scheme may be required for some Australian Government funded projects, but not all.
• Sham contracting risk has sharpened due to the move to an objective “reasonable belief” defence framework (as described in reform summaries).
• Directors/managers can face personal penalties where they are involved in contraventions, as illustrated by reported outcomes such as Henna Group.