Government Procurement Policy Note: Supplier relief due to COVID-19

25 Mar 2020 05:40 PM

The Government has published a Procurement Policy Note surrounding the COVID-19 outbreak, setting out information and guidance for public bodies on payment of their...

The Government has published a Procurement Policy Note setting out information and guidance for public bodies on payment of their suppliers to ensure service continuity during and after the current COVID-19 outbreak. Contracting authorities must act now to ensure suppliers at risk are able to resume normal contract delivery once the outbreak is over, this guidance note provides a set of terms that contracting authorities can use to implement the PPN in providing contractual relief to suppliers who have been affected by COVID-19.

All contracting authorities should:

• Urgently review their contract portfolio and inform suppliers who they believe are at risk that they will continue to be paid as normal (Even if service delivery is disrupted or temporarily suspended) until at least the end of June.
• Put in place the most appropriate payment measures to support supplier cash flow; this might include a range of approaches such as forward ordering, payment in advance/pre-payment, interim payments and payment on order (not receipt).
• If the contract involves payment by results then payment should be on the basis of previous invoices, for example the average monthly payment over the previous three months.
• To qualify, suppliers should agree to act on an open book basis and make cost data available to the contracting authority during this period. They should continue to pay employees and flow down funding to their subcontractors.
• Ensure invoices submitted by suppliers are paid immediately on receipt (reconciliation can take place in slower time) in order to maintain cash flow in the supply chain and protect jobs.

This PPN is applicable to all contracting authorities, including central government departments, executive agencies, non-departmental public bodies, local authorities, NHS bodies and the wider public sector (excluding Devolved Administrations).

You can read the full PPN here