Overview
This PPN sets out how payment approaches must be taken into account when awarding public contracts for goods and / or services and / or works, other than special regime contracts, with an estimated contract value exceeding £5 million per year (including VAT); where relevant and proportionate to do so.
PPN 018 replaces PPN 015 and the provisions of this PPN apply to relevant procurements, advertised on or after 1 October 2025, by central government departments, their executive agencies and non-departmental public bodies (collectively referred to as ‘in-scope organisations’).
Other public sector contracting authorities may wish to apply the approach set out in this PPN.
Where this PPN applies, in-scope organisations must use the questions in the Procurement Specific Questionnaire (PSQ) to assess a supplier’s payment system, for the purposes of demonstrating the reliability of their supply chain. Questions will require suppliers to demonstrate they are paying at least 95% of invoices within 60 days (90% with an action plan), and also paying all invoices within an average of 45 days.
The PPN includes accompanying guidance which explains how to assess these questions and when it would be appropriate to exclude those suppliers that cannot demonstrate that they have effective payment systems in place.
Note: This PPN has been updated to reflect new terminology introduced by the Procurement Act 2023 and the Procurement Regulations 2024; which apply to procurements commenced on or after 24 February 2025. For procurements commenced before this date, or to contracts awarded prior to this date (including via frameworks, dynamic purchasing systems or qualification systems established under previous legislation), refer to PPN 02/23.
This update does not signal a policy change or a new action. In-scope organisations should continue to apply any obligations set out in this PPN; and do not need to repeat actions required when this PPN was initially published.