Following lobbying by SELECT and the successful completion of the trial programme recommended by the Review of Scottish Public Sector Procurement in Construction, the Scottish government has recently published guidance on the implementation of Project Bank Accounts (PBAs) in construction contracts.
Scottish Government bodies must include a PBA in tender documents for contracts commencing procurement procedures from 31 October 2016 with an estimated award value at least in the following amounts:
£4,104,394 for building projects; and
£10,000,000 for civil engineering projects.
Prompt payment between firms involved in public contract supply chains is at the heart of the Scottish Government’s co-ordinated drive to maximise the impact of ongoing investment in the national infrastructure. Prompt payment is included in the Scottish Business Pledge and Procurement Reform (Scotland) Act 2014, as well being a long-standing procedural and legal requirement. PBAs improve subcontractors’ cashflow and ring-fence it from upstream insolvency.
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