New payment requirement on sub-contracting
There has been concern with how some prime contractor’s deal with sub-contractors and the terms and conditions and payment timescales used.
New guidance has been issued on payment timescales, and the DWP is involved with developing a code of conduct on sub-contracting.
Following the recent Budget, from 25 March 2010, it will be mandatory for all Government departments, agencies, non-departmental public bodies (NDPBs) (and the bodies over which they have direct control) to include a contract condition requiring their contractors to pay their sub-contractors within 30 days.
This follows from a recent drive by government to pay contractors within ten days of receipt of invoice.
Sample wording for the clause is published in OGC’s Model Terms and Conditions of Contract for Goods and Services.
An interesting aspect will be how this is implemented. Office of Government Commerce (OGC) has said that contractors will be able to use the OGC Supplier Feedback Service where Departments have not adequately responded to their concerns.
- More information about the requirement
- Expect further information on supply chain management to be issued as the DWP’s Merlin Standard is trialled this year. More details on the Merlin Standard, including the first draft version.
