Official Statements On PBAs

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Official Statements On PBAs 2016-08-22T14:36:07+00:00

Official Statements On PBAs

“Central government commits to pay invoices in five working days.  However, a prime contractor can often take several months before they pay their subcontractors.  The introduction of Project Bank Accounts is a welcome development and allows a procurement authority to put in place a mechanism for timely payments to all contractors in a supply chain, not just the prime contractor.  This has begun in construction procurement and I would like to see this rolled out across all main areas of government procurement where possible.”

Growing your Business, Report to the Prime Minister from Lord Young, May 2013.

 

“BIS and the Cabinet Office should: Better promote the existing initiatives intended to ensure subcontractors are paid on time: the use of project bank accounts……

Paying government suppliers on time, NAO 8 January 2015

 

“Project Bank Accounts (PBAs) were pioneered by the construction industry and are a practical example of how payments can be made quickly to suppliers in a supply chain …….. it should be noted that they provide shorter payment timescales than 30 days.”

Statutory guidance for contracting authorities and suppliers on paying undisputed invoices in 30 days down the supply chain (contracting authorities must have regard to this statutory guidance in complying with Reg. 113 of the Public Contracts Regulations 2015).

 

“PBAs are recognised as an effective mechanism for facilitating fair payment to the construction supply chain.  Government departments have committed to use PBAs on their projects unless there are compelling reasons not to do so.  Improving the financial position of construction SMEs, reduces the risk of insolvency which can in turn limit the capacity of the market to deliver good value.  It can also help to improve the standing of government clients and foster collaborative relationships across the supply chain, leading to increased value for money across programmes of work.

PBA usage is not consistent across all government departments so there is considerable potential for departments to learn from the exemplar users such as Highways England who have successfully implemented PBAs.

The IPA construction team will continue to work with the Fair Payment Working Group to support departments to realise the full benefits of PBAs, unblock any barriers to uptake, and monitor usage.  The reporting of PBA usage will be part of an overarching approach to centralised data collection and analysis, which would reduce the burden on departments and mitigate the risk of inefficient, isolated processes.

Paras 42-44, Government Construction Strategy 2016-20, Infrastructure and Projects Authority, March 2016.