Pay up or miss out, government suppliers are told

02/09/2019 | CHRIS AMES

New regulations have come into force that could see contractors banned from applying for large government contracts if they don't make prompt payments to their supply chain.

Ministers announced last year that from 1 September 2019, any organisation that bids for a central government contract in excess of £5m a year will need to demonstrate it has effective payment systems in place.

In theory the key threshold is for 95% of all supply chain invoices to be paid within 60 days. Suppliers who do not comply with this standard could be prevented from winning government contracts.

However, organisations that meet an absolute minimum threshold of 75% invoices paid within 60 days could be allowed to bid if they demonstrate that they are taking action to improve their record such as having an action plan in place.

The rules have been implemented by the Cabinet Office. A spokesperson told Highways that the 75% threshold has been adopted to be realistic and to allow companies to bid where they are ‘doing a good job to get their house in order’.

The Cabinet Office has said the 75% threshold ‘will be ratcheted up over time until it reaches 95%’. It has pledged to update the guidance to alert departments and bidders as and when it is to be raised.

The new rules apply to framework agreements and dynamic purchasing systems and all members of a consortium are required to provide payment information. Because the rules relate to the size of the contract rather than the size of the bidder, they apply to SMEs.

The Cabinet Office has acknowledged that smaller suppliers may not have published data available via the reporting requirements, but said that if they are using a supply chain to deliver the contract they are still expected to provide information and meet the standard.

Highways England confirmed that the new rules do apply to its contracts over £5m. Since 2009 it has used project bank accounts and has cut the average payment cycle to firms in its supply chain to 19 days.

The government-owned company is also a member of the Fair Payment Working Group.

Highways InProfile

latest magazine issue
Highways jobs

Street Lighting Project Engineer

PO2 - £41,442 to £44,331
Help us keep our streets safe, efficient and ready for the future Greenwich, London (Greater)
Recruiter: Royal Borough of Greenwich

Principal Engineer - Highways Development Management

£47,181.00 - £50,269.00, Grade 11, 37 hours, Permanent
We are seeking a dedicated Principal Highways Development Management Engineer to join our team. Wakefield, West Yorkshire
Recruiter: Wakefield Council

Highways Development Management Engineer

£32,061.00 - £46,142.00, Career Grade 7-10, 37 hours, Permanent
Do you want to join a team helping to shape the future of Wakefield through HIghways Development Management? Wakefield, West Yorkshire
Recruiter: Wakefield Council

Highways Project Engineer

£31,537 - £42,839 per annum
Would you like to be part of our friendly, welcoming Highways team, proud to manage all aspects of the highway network? Boroughbridge, York
Recruiter: North Yorkshire Council

Highways Project Engineer

£31,537 - £42,839 per annum
Would you like to be part of our friendly, welcoming Highways team, proud to manage all aspects of the highway network? Skipton, North Yorkshire
Recruiter: North Yorkshire Council

Technician - Highway Inspector

Grade 8 £29,719 - £31,691 per annum
Within the Highways Maintenance Team we are looking for an enthusiastic, customer focused and experienced person Derbyshire
Recruiter: Derbyshire County Council

Highway Design and Construction Manager

Grade N, scp50 £62,443 to scp53 £65,663 per annum, plus essential car user allowance
We embrace AI to enhance our operations and to innovate our services. Bolton, Greater Manchester
Recruiter: Bolton Council

Technician - Highway Inspector

Grade 8 £29,719 - £31,691 per annum
At Derbyshire, we have been on a journey to transform the way we deliver highway services. Derbyshire
Recruiter: Derbyshire County Council

Team Leader (Maintenance Operations)

Grade 10 - £48,226 - £51,356
Cardiff is growing faster than any other capital city in Europe. Cardiff (Caerdydd)
Recruiter: Cardiff Council

Highways Supervisor

£Competitive
We have a fantastic opportunity for a permanent Highways Supervisor Forfar, Angus
Recruiter: Amey

Tree Surveyor

£Competitive
We are excited to offer fantastic opportunities for Permanent Tree Surveyors Scotland
Recruiter: Amey

Chief Operating Officer – South West Wales Corporate Joint Committee

£Competitive
We’re looking for a bold, visionary leader to take on the role of Chief Operating Officer Carmarthenshire (Sir Gaerfyrddin)
Recruiter: Carmarthenshire County Council

Clerk of Works - Highways

£Competitive
We have a fantastic opportunity for a Clerk of Works to join our dynamic NMC SW Account team at Polmadie. Glasgow, Glasgow City
Recruiter: Amey

Highways Supervisor

£Competitive
We have a fantastic opportunity for a permanent Highways Supervisor to join our NMC NE account in Kinross. Perth and Kinross
Recruiter: Amey

Planner - Highways

£Competitive
We have a fantastic opportunity for Permanent Planner – Highways to join our NMC SW Account. Glasgow City
Recruiter: Amey

Highways Maintenance Manager

£51,356 - £55,539 per annum
We are looking for an experienced Engineer to join the team as a Highways Maintenance Manager Selby, North Yorkshire
Recruiter: North Yorkshire Council

Highways Maintenance Manager

£51,356- £55,539 per annum
We are looking for an experienced Engineer to join the team as a Highways Maintenance Manager Brompton on Swale, Richmond
Recruiter: North Yorkshire Council

Permit Officer - Internal works promoter - WMF2244e

£34,434 - £35,412
The streetworks Permit Officer role within the highways service Kendal, Cumbria
Recruiter: Westmorland and Furness Council

Highways Development Management Engineer

£41,816 - £45,175
You will be based in the Highways Development Team and work closely with colleagues across the wider transport service. Northamptonshire
Recruiter: West Northamptonshire Council

Transport Project Officer

£34,203 - £37,067
We are seeking an enthusiastic and motivated project officer to work in our Highways and Transport Service. Northamptonshire
Recruiter: West Northamptonshire Council
SUBSCRIBE NOW

Latest Video

Subscribe to Highways today to ensure you keep your finger on the pulse of everything happening in the UK road network throughout the year.

SUBSCRIBE NOW