Subbies flood Government payment hotline with angry calls

Aaron Morby 9 years ago
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More subcontractors are turning to the Government’s Mystery Shopper service to vent concerns about late payment and bad procurement practices on public works contracts.

Anonymous complaints about bad procurement procedures rose in the last three months of 2013 with late payment and pre-qualification questionnaires coming under fire.

The Government has now decided to keep its Mystery Shopper complaints scheme running through 2014 and introduce a new regime of spot-checks on public bodies to make sure their procurement is small business friendly.

Within the last three months the MoD has been forced to seek assurances from Carillion that sub-contract payments would be made within 30 days and they are actively managing the payment clause in the contract.

Subcontractors also raised concerns about Mitie late payments on MoD prime contracts and Ministry of Justice jobs. The top management agreed to ensure that prompt payments are made.

Since the Mystery Shopper scheme was launched three years ago, subcontractors and suppliers have made 540 complaints about bad procurement practice, and most recently several cases of late payment by main contractors.

These anonymous complaints have triggered Government investigations into its departments procurement practices, with 80% of cases resolved, many leading to changes in procedures by council and public procurers, like NHS trusts.

One subcontractor said: “It is very encouraging to know that our feedback was taken into consideration from the outset and that the Mystery Shopper feedback initiative will make a positive impact on UK public sector procurements.”

Mystery Shopper hotline

Subcontractors can provide anonymous feedback to the Government by sending an email to MysteryShopper@cabinet-office.gsi.gov.uk or by telephoning the Government Service Desk on 0845 000 4999.

The pre-qualification process and the way it often disadvantages small firms, or is to long and complex, raised most complaints.

In one case a local authority gave more marks in a PQQ for firms simply with higher turnovers.

Complaints were received about the complexity and financial assessments of pre-qualification questionnaires issued by Liverpool, Greenwich and Shropshire Councils.

Investigations

  • Royal Liverpool University Hospital Trust was hauled over the coals after subcontractors claimed the prime contractor was paying slowly. It turned out the contract issued by the Trust failed to include a clause for subcontractor payments.
  • There were also several complaints about councils abandoning tendering procedures halfway through and a NHS Trust charging firms to bid.
  • A mystery shopper complained the firm received no work through the YORCivil framework agreement, which is administered by Barnsley council. This was explained away because of low council take-up.
  • The Department for Education extended the deadline for the return of bids when a mystery shopper raised concerns that the Christmas and New Year holiday period might disadvantage responses.
  • An SME complained that Lend Lease was retaining performance bonuses and financial bonds from the Olympic Village scheme, which the construction manager maintained was due to outstanding issues.

Matthew Hancock, Minister of State for Skills and Enterprise, said: “As part of major public procurement reforms to be implemented in 2014 we will go even further.

“We will make sure small firms get treated fairly by mandating prompt payment terms all the way down a public procurement supply chain, and ensuring public bodies report on their prompt payment performance.

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