Here are some of the suppliers at risk of being excluded from government contracts because of new prompt payment initiative

SUMMARY:

The Cabinet Office announced the initiative last week, which requires that those bidding for government contracts pay 95% of their suppliers within 60 days.

Banned blocked unacceptable SMEs government contractsThe Cabinet Office last week announced a new initiative that states that the government will possibly exclude suppliers from winning government contracts if they are not paying their own suppliers within a reasonable timeframe – in a bid to help support SMEs.

The press release didn’t contain specifics, but diginomica/government has learned that if a business is unable to demonstrate that they are meeting the code’s core standard of paying 95% of invoices within 60 days over the previous two six month periods and cannot explain why or show evidence of significant remedial action taking place, then they may be excluded from the process and not be able to win that opportunity.

Cabinet Office Minister, Oliver Dowden, last week said:

“Companies providing crucial services to the public sector, like supporting prisons and delivering road infrastructure projects, must be paid on time.

“Paying invoices promptly is vital in providing healthy cash flow, particularly for smaller businesses who are the backbone of the UK economy, to help them survive and thrive.

“From next year, if government contractors are late with supplier payments, they could stop winning public contracts altogether – until they clean up their act.”

However, the Cabinet Office did add that “decisions will be taken on a case by case basis”.

The list

The government already requires that large suppliers publish their payment data every six months on GOV.UK, which allowed us to search through some of the larger suppliers to see how they’re performing. The data is pretty incomplete, with some suppliers only showing the previous six months, and others not having any data to show yet at all (including Fujitsu, IBM, Atos and Oracle).

However, others had data from the previous six months, which enables us to point to some suppliers that could be at risk of exclusion from contracts thanks to the new prompt payment initiative. That being said, the initiative doesn’t come into force until Autumn 2019, so they have some time to rectify their current positions.

The list includes the likes of HP, Capita, Microsoft, Capgemini and Siemens. They all work on some of the largest contracts in government. I’ve listed the details as they are found on GOV.UK, and it is those that have more than 5% of invoices paid after a 60 day period that are at risk (included all of those cited below). It’s also worth noting that this is by no means a comprehensive list and is based purely on the data I was able to find.

HP

Invoices paid:

within 30 days: 52%
in 31 to 60 days: 30%
in 61 days or more: 18%
Invoices due but not paid within agreed terms: 28 %

Capita

Invoices paid:

within 30 days: 70%
in 31 to 60 days: 23%
in 61 days or more: 7%
Invoices due but not paid within agreed terms: 27 %

Microsoft

Invoices paid:

within 30 days: 77%
in 31 to 60 days: 16%
in 61 days or more: 7%
Invoices due but not paid within agreed terms: 17 %

Capgemini

Invoices paid:

within 30 days: 65%
in 31 to 60 days: 24%
in 61 days or more: 11%
Invoices due but not paid within agreed terms: 25 %

BT

Invoices paid:

within 30 days: 71%
in 31 to 60 days: 26%
in 61 days or more: 3%
Invoices due but not paid within agreed terms: 5 %

Sopra Steria

Invoices paid:

within 30 days: 80%
in 31 to 60 days: 14%
in 61 days or more: 6%
Invoices due but not paid within agreed terms: 32 %

Siemens

Invoices paid:

within 30 days: 62%
in 31 to 60 days: 16%
in 61 days or more: 22%
Invoices due but not paid within agreed terms: 15 %

Vodafone

Invoices paid:

within 30 days: 31%
in 31 to 60 days: 25%
in 61 days or more: 44%
Invoices due but not paid within agreed terms: 6 %

BAE systems

Invoices paid:

within 30 days: 76%
in 31 to 60 days: 15%
in 61 days or more: 9%
Invoices due but not paid within agreed terms: 16 %

Deloitte

Invoices paid:

within 30 days: 74%
in 31 to 60 days: 16%
in 61 days or more: 10%
Invoices due but not paid within agreed terms: 70 %

KPMG

Invoices paid:

within 30 days: 43%
in 31 to 60 days: 40%
in 61 days or more: 17%
Invoices due but not paid within agreed terms: 44 %

Image credit - Image sourced via Pixabay

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