Model contracts to fast-track Covid-19 extra contractor payments

Aaron Morby 7 months ago
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The Cabinet Office has published model contract variations for JCT and NEC contracts paving the way for public sector clients to support contractors on projects placed in care and maintenance or suspended altogether.

The new contract variations will support the Government’s procurement policy note 02/20. This orders public clients to settle construction bills straight away and still pay for work even if sites are suspended.

The emergency guidance will last until at least June 30.

Contract variations cover four main options for supporting contractors’ cashflow during the coronavirus outbreak.

To further ease cashflow Cabinet Office chiefs also give the all-clear for contracting authorities to consider the release of retentions where the works have been completed in substance and only minor defects remain.

To ease payments down the supply chain contracting authorities are advised to consider operating project bank accounts during the COVID-19 period.

Four payment mechanism contract variations


Accelerated payment of invoices.

Certification of interim valuations where work has not been undertaken, based on previous valuations

Amendment to existing payment mechanism to make more regular payments or reorder existing payment schedule

Provision of advance payment(s) to the supplier.

The latest update to the Government procurement note highlights that contractors cannot be paid twice by way of extra project payment and claim for some or all of the same employees working on the contract under the Coronavirus Job Retention Scheme.

Payments under CJRS are for staff who are furloughed and not working. It warns that any supplier found to have acted fraudulently by claiming under the CJRS (or other COVID19 support schemes) for workers that are being paid under a public sector contract, could be excluded from future public contracts.

The Cabinet office also gives the all-clear for contracting authorities to consider the release of retentions where the works have been completed in substance and only minor defects remain.

 

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