Vic Respondent Prepares Performance Security Schedule

PLEASE NOTE: The information below is in relation to performance security schedules. If you are responding to a payment claim in respect of a progress payment, please click here for information about payment schedules.

IGNORING A PERFORMANCE SECURITY CLAIM WITHOUT INTENTION TO PAY IN FULL BY THE DUE DATE FOR PAYMENT MAY HAVE SERIOUS FINANCIAL CONSEQUENCES.

Who is a respondent?

A respondent is a person who has received a performance security claim under the Act.

What is a performance security schedule?

A performance security schedule is the notice in writing which must be served on the claimant if the respondent does not intend to release the full amount of the performance security by the due date for release. This is regardless of whether the respondent believes that the claimant is or is not entitled to make the claim or if the respondent denies being party to the contract. Assuming a performance security claim is not valid, and therefore can be ignored, is risky. Click here for information about performance security claims.

A valid performance security schedule must comply with the below requirements

A performance security schedule must:

• be in writing and addressed to the claimant;
• identify the performance security to which it relates;
• identify the amount of the performance security that is proposed to be released if it is not the same amount of the claim;
• indicate when the respondent proposes to release the performance security (or any part);
• if the respondent proposes to release less than the amount of the performance security claimed, the respondent must indicate why the amount to be released is less and provide reasons.

Download example of a Performance Security Schedule

Time frames and service

Performance security schedules must be served within 10 business days after receipt of the performance security claim, or a shorter period if provided by the contract. A contract provision seeking to extend the period for the provision of a payment schedule beyond 10 business days is void.

It is critical that respondents serve in accordance with strict legal requirements as to service.

What happens if a valid payment schedule is not served within time?

A respondent who fails to comply with the time frames for service of a valid performance security schedule must be given a second opportunity to provide a performance security schedule (s 18A(2) Notice). If the respondent ignores the second opportunity, the Act denies the respondent the right to participate in the adjudication process.

Avoid pitfalls

Click here for a list of common reasons why respondents do not succeed in adjudication.

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