In this section:
- Online Payment Pack Home
- Late or non payment
- Reduced or under payment
- Proposed price reductions
- Variation payment procedures
- Outstanding retention
- Non-compliance with OGC Fair Payment Charter
- Confirming whether the Charter applies
- How to get it right next time
- Check your contract before you sign
- Always sign up to the Charter on a public sector project
- Report non-compliance
Non-compliance with OGC Fair Payment Charter
Confirming whether the Charter applies
If you are working on a project in England or Wales funded by central or Local Government such as a hospital or a school and the contractor is not complying with the requirements of the Office of Government Commerce (OGC) Fair Payment Charter, send letter 6a - Fair Payment Charter terms to request a review of the contract terms in light of the Charter.
Please note that the Fair Payment Charter does not apply on London 2012 projects; however, the Olympic Delivery Authority (ODA) has signed up to the Construction Commitments, which, although not as specific as the Charter, do include a commitment to fair payment.
The Charter does not apply at all in Scotland.
Letter
6a - Fair Payment Charter terms
How to get it right next time
1. Check your contract before you sign
During pre-contract negotiations on a public sector project, ensure the key points within the Fair Payment Charter (e.g. 30-day payment periods, BACS payments and the appropriate retention) are reflected in the contract documentation. In terms of 30-day payment, you should generally be entitled to a valuation within a month of commencing works and to receive payment for that work no more than 30 days later. If there are any discrepancies in the documentation or you have queries, raise them with the contractor and sort them out before you sign.
It is important to get the terms right upfront; if you wait until you have started work to point out to the contractor that he is not complying with the Charter, it could be too late as the Charter is not legally binding and he will be able to fall back on whatever has been agreed in the contract.
If you are unsure whether the Charter applies to your project, complete the NSCC enquiry form.
Please note that the Fair Payment Charter does not apply in Scotland.
2. Always sign up to the Charter on a public sector project
Once you have been appointed, ask the contractor to sign up to the Charter for that project by downloading a copy of the Charter.
If there isn’t a Charter in place, contact the project client to find out why.
3. Report non-compliance
If the requirements of the Fair Payment Charter are not being complied with, inform the project client. Alternatively, if you are not comfortable speaking to the client direct, contact NSCC by completing the enquiry form. NSCC can contact the client to find out why the Charter is not being applied on the project whilst keeping your name out of it.
Remember, the Fair Payment Charter has the potential to radically change payment practices in the construction industry – but only if enough Specialist Contractors insist that its requirements are met.