Government Sets Time Limits to Ensure Fair Payment in Construction Supply Chain

The Office of Government Commerce (OGC) has announced that construction procurers in central government departments, their agencies and non-departmental public bodies will need to ensure that payment periods do not exceed 30 days from Tiers 1 to 3 of the supply chain. The breakdown is as follows:

• Tier 1 – payment is required within 14 calendar days from the due date
• Tier 2 – payment is required within 19 calendar days from the due date
• Tier 3 – payment is required within 23 calendar days from the due date OGC stipulate that this is a new contractual requirement and is therefore not intended to be applied retrospectively to existing construction contracts.

However, where feasible, suppliers' voluntary agreement to the new payment practise should be sought. If the supply chain feels that there requirements have not been met, then there is a reporting procedure available through the Cabinet Office's Supplier Feedback Service. Full details are available on the OGC website.