A short video is available which explains:
- What is Prompt Payment?
- Pre-existing prompt payment policy and why it was updated
- The changes driven by SPPN 02/2022
- How to evidence payment performance and monitor prompt payment
Has the SPD (Single Procurement Document) question 4C.4 been updated to include Prompt Payment?
No, no new questions have been added to the SPD for Prompt Payment.
However the Standardised Statements have been updated with more information on Prompt Payment to help you add further information to existing SPD question 4C.4 (to further detail what your minimum requirements are).
All SPD questions are consistent whether you are using:
- the Word “paper” version of the SPD
- the SPD module in Public Contracts Scotland (PCS) or
- in PCS-Tender
However please note:
If you are using the SPD module in PCS: you will add your qualifying information e.g. standardised statements, into the specific SPD question in the PCS SPD module.
If you are using the word version of the SPD or the SPD within PCS-Tender: you will add your qualifying information e.g. standardised statements, in the PCS Contract Notice.
When will evidence of Prompt Payment be requested by the buyer during the bidding process?
As part of the tender process the SPD is used as a self-declaration form. This means that bidders are not required to produce supporting evidence to you upfront (unless there are clear reasons for doing so). Otherwise you may request evidence at the end of the first stage of a two stage procedure or prior to awarding the contract.
You should consider what Prompt Payment requirements you will have e.g. ongoing reporting requirements such as KPI’s, and include these in your tender specification.
Once the contract has been awarded, as part of the contract management process, you can track the specific Prompt Payment reporting requirements, targets and/or KPI’s that you requested from your supplier(s) on an ongoing basis.
How do I evaluate a bidder’s Improvement Plan?
When bidding for a tender if the bidder is unable to evidence at least 95% payment of invoices on time (more information can be found in the Prompt Payment in the Supply Chain station) you should request and receive an improvement plan.
Once this improvement plan is received, the bid can proceed to the next stage. You do not need to evaluate this improvement plan at this time – supplying this document is sufficient for the bid to proceed. Then, if this bid is successful, you will review and manage the improvement plan (and prompt payment performance) throughout the life of the contract as part of the normal contract and supplier management process.
How do I measure the payment performance of disputed invoices?
Only valid invoices should be used to measure payment performance i.e. disputed invoices should not be included in your payment performance measurements.
Invoices are valid when they are matched accurately to a receipted purchase order and can proceed through the payment system. Invoice disputes can be caused by a range of issues e.g. incorrect PO number referenced.
Does the Prompt Payment guidance (SPPN 02/2022) apply only to regulated procurements?
The Prompt Payment requirements (SPPN/02/2022) are relevant to all procurements where sub-contractors will be used to deliver the contract.
I am about to publish my Contract Notice but don’t yet know whether sub-contractors will be used. What do I do?
If a bidder indicates “No sub-contracting” in response to SPD question 4C.10 then no evaluation of Prompt Payment is required.
If the bidder indicates “Sub-contracting required” in response to question 4C.10 then their response to SPD question 4C.4 should be reviewed prior to contract award.
What if a bidder declines to adopt the Prompt Payment standard clause?
You should seek specific legal advice before proceeding with any decision.