Paul Reeve, ECA director of business services, welcomed the government’s latest plans to make public sector procurement more accessible to SMEs. However, he says that not including PAS 91 as the template for construction PQQs would be a fundamental omission.
He said, ‘If PAS 91 is not in the mix, construction SMEs are unlikely to see any benefit from the new proposals. It is central to controlling pre-qualification costs in construction and tailor made to cover all the basic PQQs for contractors and other suppliers. The general PQQ shown in the latest government consultation needs to be consistent with PAS 91 where the question sets overlap, and crucially, to refer to all the core PAS 91 questions when construction work is involved. Given that the ECA and others in the industry worked with government to develop the recently revised PAS 91, including it would make a lot of sense.’
On the prompt payment component of the proposals, Reeve added, ‘Overall, the government’s proposals on ensuring prompt payment down the supply chain are extremely welcome, and very workable. Late or slow payment can break a construction business. Earlier this year we met with Construction Minister Michael Fallon to discuss what needs to be done. We are pleased to see that his positive interest and response to our approach has translated into action – it looks like real progress is finally on the cards.’
But he added, ‘To help prevent insolvencies and boost SME investment and employment, ensuring prompt payment is a no brainer – we need to turn these proposals into enforceable action as soon as possible.’
An ECA survey carried out in May this year found that just eight per cent of electrical contractors said their main contractor regularly passes on the government’s payment terms of under 30 days.The proposals will align with the recently enacted Late Payment of Commercial Debt Regulations, which require all public bodies to pay their main suppliers in 30 days.
Reeve concluded, ‘Payment issues are vital at any time, but if we are to have a strong and managed recovery, previous experience shows that SMEs who want to raise their game must be paid promptly.’
