Overview
This regulation requires contracting authorities to include the following terms in every public contract:
- to pay contractors any sums due within 30 days of an invoice being deemed as valid and undisputed
- to consider and verify any invoices in a timely manner
- the above terms to be included in any subcontract entered into by the contractor (or any subcontractor).
To the extent that the above terms are not expressly included in a public contract, equivalent terms are to be implied into the contract.
Regulation 113 also states that contracting authorities should be mindful of any contractual or statutory provision requiring payment sooner than 30 days and of any guidance issued by the Minister for the Cabinet Office.
Contracting authorities are also required to publish statistics every financial year, detailing the level of compliance with the terms of Regulation 113.
Regulation 113 does not apply to contracts awarded by a contracting authority where the contract relates to a maintained school, an Academy, a six form college corporation or relevant health care services within the meaning and scope of the Health Care Services (Provider Selection Regime) Regulations 2023.
Objective at this commercial stage
Invoices from suppliers must be considered and verified in a timely manner, with payment made within 30 days of the respective invoice being verified as undisputed and valid.
Statistics must be published every financial year, detailing compliance with the prompt payment provisions of this regulation (i.e. regulation 113).
Key considerations at this commercial stage
Contracting authorities should:
- ensure that invoices are considered and verified in a timely manner
- ensure that suppliers are paid within 30 days of the respective invoice being considered and verified as valid and undisputed
- ensure that statistics are published every financial year, detailing the contracting authority’s compliance with this regulation (i.e. regulation 113)
- consider any guidance issued by the Minister for the Cabinet Office in relation to this regulation.
Legal framework
See also in the Procurement Act 2023:
- Section 68: Implied payment terms in public contracts
- Section 73: Implied payment terms in sub-contracts
- Section 88: Regulated below-threshold contracts: implied payment terms
Additional support and guidance
Make sure you:
- read the regulation
- seek legal and commercial advice in the context of specific procurements
