PPN08/21: a bidder’s approach to payment in the procurement of major government contracts

That will be of particular importance to delivering social value in procurement and large corporates partnering with smaller charities or socially committed companies in a region looking to be businesses for good.

As we all know, cash is king, and the main thrust of this PPN is to ensure bidders that intend to use a supply chain to deliver the contract they’re tendering for, have effective payment systems in place to ensure the reliability of that supply chain.

The key points of interest for PPN08/21 are:

• The PPN applies from 1 April 2022 to Central Govt Departments, their Exec Agencies and Non Departmental Public Bodies (but not NHS trusts or Contracting Authorities whose functions are devolved or mainly devolved functions of Wales, Scotland or Northern Ireland).
• Contracts for goods/services/works with anticipated contract value over £5m subject to PCR 2015 (unless in exceptional circumstances would not be relevant or proportionate to do so).
• Only applies to frameworks or Dynamic Purchasing Systems where it is anticipated that individual value of any contract to be awarded is greater than £5m per annum.
• The guidance includes a set of standard selection questions and criteria/methodology to be used.
• The key issue to be assessed is whether a bidder that intends to use a supply chain to deliver the contract, has effective payment systems in place to ensure the reliability of that supply chain.
• A bidder should only be excluded if they do not meet the selection criterion having taken into account the self-declarations and an assessment of their systems and recent payment performance, or if the successful bidder is unable to verify its self-declarations with the required evidence.
• Contracting authorities must verify that the successful bidder meets the selection criterion prior to award of the contract or appointment to a framework agreement or dynamic purchasing system by requiring the evidence listed in the guidance. Contracting authorities may request this evidence at any time during the procurement process. For multi-stage procurements, Contracting authorities may want to consider verifying the evidence before taking bidders on to the next stage. For contracts awarded under a framework agreement or dynamic purchasing system, contracting authorities should verify that the bidder continues to meet the selection criterion prior to entering into any contract awarded under a framework agreement or dynamic purchasing system. Contracting authorities should not require a bidder to provide evidence where it can be obtained directly and free of charge by the contracting authority from a national database (although it is not unreasonable for the bidder to be required to provide details of how to access that database).