Contractors Demand 3-Year Works Ban For Late Payers

11th April 2018.

Specialist contractors have welcomed Government plans to exclude bad payers from bidding public works and called for three-year bans for offenders.

In response to the anger felt towards the government’s preferential treatment of self-confessed late payer, Carillion, the sector has demanded a ban to stop bad payers from being awarded public contracts. Not only would this prevent further damage to the supply chain but also encourage smaller firms to pursue ambitious projects.

This is part of a plan that the government has floating around the cabinet, which not only punishes bad payment practice but also encourages firms to clear up their act. According to the proposal, paying 95 percent of undisputed invoices within 60 days is an “appropriate benchmark of adequate payment performance”, and those who do not achieve this will have to pay the appropriate late payment compensation.

Late payment has been on the tip of everyone’s tongues, from business owners to sub-contractors. Despite various initiatives by Government and other official bodies, to resolve the issue, it still continues to torment the business world. A tough approach has become necessary in order to reach a resolution, and administering bans and fines on the worst offenders could rush us to the finish line. According to some little-known legislation, late payers owe their suppliers compensation, and here at the Credit Protection Association, we ensure our members get it.

Engineering specialist umbrella trade body SEC Group has suggested a yellow/red card system for late payers to lead up to the three-year ban.

“We have been urging the Government to introduce a yellow/red card system for a long time. The yellow card is a warning to improve payment performance and the red card excludes a continuing poor performer from bidding for government contracts for a period of 2 to 3 years.”

Rudi Klein added that if such a system had already been in place Carillion would have been excluded from government contracts.

As more suppliers are hurt by late payment, and some still feel the effects of Carillion’s demise, it has become imperative that something is done. Large businesses are hurting small businesses, small businesses are hurting other small businesses and supply chain bullying is happening all over the place. It has become impossible for everyone to play together nicely, so a tough approach needs to be enforced.

At the Credit Protection Association, we have helped many of our members as they suffer at the hands of late payers. If invoices are not paid, good credit and positive relationships are destroyed in the process. Therefore, our credit control procedure at CPA centres around recovering debt for our members while not damaging goodwill. Our team are well versed in late payment legislation and fight to get our members the compensation they deserve.