Charities delivering public services are facing serious challenges. Rebecca Young of NCVO explains the issues and what the government’s new guidance for contracting authorities will mean in practice.
New procurement guidance
The guidance asks that contracting authorities take the following steps:
- Inform suppliers who they believe are at risk that they’ll be paid as normal (even if service delivery is disrupted or temporarily suspended) until at least the end of June. This could include services cut short or reduced because of the impact of covid-19, and non-payment could result in supply chains collapsing and/or significant financial implications for the supplier. Authorities can also decide to continue to pay suppliers if it’d be value for money and important for continuity.
- Put in place payment measures to support supplier cash flow. Authorities can continue to pay at usual contractual rates. They could consider other options such as payment against revised/extended milestones or timescales, interim payments, forward ordering, payment on order or payment in advance/prepayment. They should also ensure invoices submitted by suppliers are paid immediately on receipt.
- If the contract involves payment by results (PBR) then payment should be on the basis of previous invoices. For example, authorities can pay the average monthly payment over the previous three months.
- Contracting authorities should re-deploy the capacity of those suppliers to other areas of need or provide relief against terms like KPI’s, before considering claims to suspend performance.