New Cabinet Office Procurement Policy Note related to COVID-19

The Cabinet Office has just published a new Public Procurement Note (PPN 02/20) setting up guidance and advice on contract payment to contracting authorities in the UK public sector except for the devoled administrations in Scotland, Wales and Northern Ireland. These are recommended to:

  • Review their contract portfolio and inform at risk suppliers that they will be paid as normal even if contract performance is disrupted
  • Ensure payment measures are deployed to support the cashflow of suppliers, including the possibility of moving forward some ordering or paying in advance as well as paying invoices on receipt
  • Providing payments based on previous invoices in case contract is subject to payment by results

The logic behind the Note is thus to simplify payment processes as to ensure suppliers do not go bankrupt or face cashflow issues and that supply to the public sector is not disrupted. In essence, it is about contract and risk management.

However, it does  include  some obligations to the contractors benefiting from the simplification of payment processes. Firstm they will need to agree to an open book approach including providing cost data to the contracting authority. In addition, contractors should make sure employees and sub-contractors continue to be paid but does not seem to impose any specific conditions to be met in this regard.