Government consults on exclusion from public contracts for late payment of sub-contractors

Published on 24th May 2018

The Crown Commercial Service (CCS) has launched a consultation on its proposals to consider suppliers' "approach to payment of subcontractors" as part of the selection criteria for public contracts valued at over £5m.

CCS is seeking views from suppliers to central government on its proposals to require evidence of payment performance as a selection criterion.

Under Option 1, contracting authorities would be able to set certain benchmarks or conditions appropriate to the contract as selection criteria. Contracting authorities could choose whether any failure to meet these criteria would amount to exclusion of a bidder from the procurement.

Under Option 2, the CCS would use the existing discretionary exclusion ground under Regulation 57 of the Public Contracts Regulation 2015 (which provides that suppliers can be excluded for 'Grave Professional Misconduct') to issue guidance on the sort of poor payment performance that would amount to Grave Professional Misconduct. Contracting authorities would be empowered to exclude poor payers, without having to set particular conditions or thresholds.

A potential guideline benchmark of poor payment performance is proposed as a failure to pay 95% of payments within 60 days over two consecutive six month periods.

The deadline for responses to the consultation is 5 June 2018.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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