New Government procurement guide tackles cashflow for contractors

The Government has published a new guidance note about public procurement that encourages public sector clients to help to tackle cashflow issues by continuing to make payments and release cash retentions, subject to risk.

The Cabinet Office construction contracts guidance advises public sector clients to help support firms through the coronavirus crisis. But the guidance warns the public sector to be aware of a supplier claiming separate relief from another source of Government financial support on COVID-19, to the effect that the supplier gains an undue advantage by claiming relief twice for the same hardship.

It confirmed that the guidance applied to all public contracts and also said: “The contracting authority should continue to pay suppliers at risk due to covid-19 on a continuity and retention basis until at least the end of June 2020.”

The guidance covers England and there are separate arrangements for the devolved governments.