Getting Paid On Time
Posted by Tim Williams on February 20, 2015
Although the public sector are generally quite good at paying on time a new requirement in the Public Contracts Regulations is that every public contract must stipulate that payment is made within 30 days from the receipt of a valid invoice (Regulation 113).
Perhaps even more importantly any subcontract awarded by the successful contractor must contain the same 30 day payment terms from the contractor to the subcontractor.
This requirement applies to every contract in the supply chain no matter how far removed from the contracting authority.
There are certainly many cases in the past where a contractor at the top of the supply chain has been paid on time, but delays payment to its suppliers which has an adverse ripple effect as the delay increases further down the chain. This new provision should hopefully ensure that such behaviour is a thing of the past.
Public bodies will be required to publish annual statistics setting out the proportion of invoices paid on time, the liability to pay interest and the actual amount of interest paid.