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New Scottish Procurement Policy Note: public procurement - prompt payment in the supply chain SPPN 2/2022

The Scottish Government has published a new Scottish Procurement Policy Note 2/2022, to provide details of how public bodies are to embed prompt payment performance in the supply chain through procurement processes. This policy note replaces SPPN 08/2009.

Key points

  • It is critical that we use the power of procurement to support Scotland’s economic recovery and longer-term wellbeing, and that includes ensuring suppliers and sub-contractors are paid on time. Prompt payment of the supply chain is not only the ethical and socially responsible thing to do. It is critical to the sustainability and resilience of our supply chains in delivering goods, services and works to, or on behalf, of the people of Scotland.
  • Suppliers are asked to adopt the elements of Fair Work First as detailed in SPPN 6/2021 when bidding for contracts. It is important for suppliers to be paid om time to deliver against these elements.
  • Public bodies should ensure contracts are awarded to bidders who have good payment performance history and have systems in place so that their full supply chain is paid on time and in accordance with the terms of contract. Mechanisms should be put in place to assess and monitor payment performance of the supply chain throughout the lifetime of the contract.
  • Public bodies and suppliers are encouraged to share this SPPN with relevant members of their supply chains including trade bodies and procurement forums.
  • Public bodies must use project bank accounts for public works contracts over the applicable value thresholds. Thresholds are £2m for building contracts and £5m for civil engineering contracts. In all other procurement where there is a supply chain, public bodies should use the following: Selection stage – new SPD Standard Statement, Award stage question, terms and conditions, Contract Management, Escalation for late and non-payment of valid invoices, monitoring.

SPPN 2/2022 can be read in full on the Scottish Government website. This policy note replaces SPPN 8/2009.

Support from the Supplier Development Programme

The Supplier Development Programme has issued previous communication regarding SPPNs which can be viewed on the website.

Micro, small and medium sized businesses based in Scotland can attend SDP's Responding to Tender Policy Requirements - Power of Procurement on 13 April. At this webinar, you will get an overview of the most common policy requirements including Fair Work Practices, Sustainability, Community Benefits, Community Wealth Building and Net Zero targets.

Additionally, suppliers can attend SDP's Understanding Your Role in Contract Management - Critical Success Factors webinar on 27 April. You will learn the critical success factors of maintaining a good relationship with a buyer and what steps you, as a supplier, should take to mange potential risk.

The full programme of tender training can be accessed on the SDP website, available free to Scottish SMEs.

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