A NOTE from the Cabinet Office has been issued to public bodies advising them how to treat suppliers during the coronavirus, COVID-19, outbreak. It has been drawn up to protect ‘at risk’ suppliers and ensure they are in a position to resume normal contract delivery once the outbreak is over.
The Procurement Policy Note (PPN 02/20) states: “All contracting authorities should urgently review their contract portfolio and inform suppliers who they believe are at risk that they will continue to be paid as normal (even if service delivery is disrupted or temporarily suspended) until at least the end of June.”
It also recommends authorities put in place the most appropriate payment measures to support supplier cash flow; this might include a range of approaches such as forward ordering, payment in advance/prepayment, interim payments and payment on order (not receipt).
John Pearce, CEO of Made in Britain, said, “This note from the Cabinet Office will make reassuring reading for manufacturers. We know many of our members need to hear this kind of undertaking from the government.”
The policy note goes on to say, “To qualify, suppliers should agree to act on an open book basis and make cost data available to the contracting authority during this period. They should continue to pay employees and flow down funding to their subcontractors.