The government is to tighten up 30 day payment rules covered by the 2015 Public Contracts Regulations following representations from the Specialist Engineering Contractors’ (SEC) Group. The move has led to revised statutory guidance being issued by the Crown Commercial Service.
The 2015 Public Contracts Regulations place a statutory duty on UK Government Departments/Agencies and public bodies in England to ensure that 30 day payment clauses are inserted in supply chain contracts.
Statutory guidance issued under the Regulations did not specify a trigger point in construction contracts for the commencement of the 30 days. But following representations from the Specialist Engineering Contractors’ (SEC) Group, revised statutory guidance has now been issued by the Crown Commercial Service.
The new guidance makes clear that, on public works contracts, tiers 1, 2 and 3 contractors must be paid within 30 days of the issue of a payment notice.
SEC Group CEO, Professor Rudi Klein, explained that this means that subcontractors (and sub-subcontractors) should now expect to be paid, at the latest, within 30 days following expiry of the fifth day period (after the payment due date) allowed for issuing statutory payment notices.
Professor Klein added: “This clarification will benefit thousands of construction supply chain firms working on public sector jobs. The statutory guidance also advises public bodies to use project bank accounts to ensure that supply chain firms are paid within the 30 days.”
SEC Group has already referred complaints to the Government’s complaints service, the Mystery Shopper Scheme, regarding failure by some public bodies to ensure that 30 day payments are being made along the supply chain.
