Government: Failure To Demonstrate Prompt Payment Will Prevent Firms From Winning Public Sector Contracts

Cabinet Office Minister for Implementation Oliver Dowden CBE MP has announced that for the first time the failure of companies to demonstrate prompt payment to their suppliers could result in them being prevented from winning Government contracts.

A new prompt payment initiative to ensure all Government suppliers and subcontractors benefit from being paid on time was launched this week.

Due to come into force in Autumn 2019, the initiative will ensure the Government only does business with companies who pay their suppliers on time, many of which are SMEs, with the intention of promoting a healthy and diverse marketplace of companies delivering public sector work.

Commenting, Mr Dowden said: “Companies providing crucial services to the public sector, like supporting prisons and delivering road infrastructure projects, must be paid on time.

“Paying invoices promptly is vital in providing healthy cash flow, particularly for smaller businesses who are the backbone of the UK economy, to help them survive and thrive.

“From next year, if government contractors are late with supplier payments, they could stop winning public contracts altogether – until they clean up their act.”

CECA is in the process of setting a group of members to focus on payment and procurement. If you are a CECA member and would like to be involved in this work, contact CECA Director of External Affairs Marie-Claude Hemming.