Public Procurement and Property
Public Procurement – Prompt Payment in the Supply Chain: SPPN 2/2022
We have published a new Scottish Procurement Policy Note 2/2022, to provide details of how public bodies are to embed prompt payment performance in the supply chain through procurement processes. This policy note replaces SPPN 08/2009.
It is critical that we use the power of procurement to support Scotland’s economic recovery and longer term wellbeing, and that includes ensuring suppliers and sub-contractors are paid on time. Prompt payment of the supply chain is not only the ethical and socially responsible thing to do. It is critical to the sustainability and resilience of our supply chains in delivering goods, services and works to, or on behalf, of the people of Scotland.
Suppliers are asked to adopt the elements of Fair Work First as detailed in SPPN 6/2021 when bidding for public contracts. It is important for suppliers to be paid on time to deliver against these elements.
Public bodies should ensure contracts are awarded to bidders who have good payment performance history and have systems in place so that their full supply chain is paid on time and in accordance with the terms of the contract. Mechanisms should also be put in place to assess and monitor payment performance of the supply chain throughout the lifetime of the contract.
This note has been developed in collaboration with several stakeholders:
“Small businesses are the backbone of the UK economy and they need certainty about when they’ll get paid. Without that they can’t invest, innovate, and thrive. I welcome the changes made by the Scottish Government to encourage quicker payments along the supply chain through procurement processes. The SPPN is another step along the way to eradicating the curse of late and unfair payments.” Liz Barclay, UK Small Business Commissioner
“Late payment continues to be a huge problem for Scotland’s small business community. Many larger operators regularly put off paying their bills to shore up their accounts, but this practice puts huge pressure on their smaller suppliers who often don’t have substantial cash reserves. It is therefore good news to see Scottish Government take additional action to ensure those supplying Scotland’s public sector play fair and pay fair. At a time when many local businesses are laden with covid-debt and face spiralling utility bills, this is a practical step that could help boost business survival.” Andrew McRae, FSB’s Scotland policy chair
Public bodies and suppliers are encouraged to share this SPPN with relevant members of their supply chains including trade bodies and procurement forums.
To find out more about Public Procurement in Scotland, please visit www.gov.scot/procurement
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