Government issues guidance on new procurement rules for subcontracting

The Cabinet Office and the Crown Commercial Service have issued guidance explaining the new rules on implementing the subcontracting provisions in the new procurement directive.

The Public Contracts Regulations 2015 (PCR) implement the provisions in the directive, “providing some additional obligations and flexibilities to enable further transparency and oversight of the working practices of the subcontracting chain”.

The guidance notes the “new obligation on the contracting authority, where economic operators are working at a facility controlled by that contracting authority, to require the main contractor to provide its subcontractors' contact details so far as known at the time”.

The two new flexibilities are:

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(i) a provision enabling contracting authorities to check the credentials of subcontractors to see if there are grounds for exclusion, and if there are grounds, the PCR lays down what action should be taken;

(ii) the contracting authority may ask the main contractor to provide basic contact information on their subcontractors and supply chain.

In addition to the changes introduced by the new procurement directive, the PCR requires contracting authorities to ensure prompt payment of valid and undisputed invoices for the entire supply chain (ie within 30 days).

The guidance can be viewed here. It includes a suggested contract clause for subcontracting to be included in public contracts, and a draft mandatory and discretionary exclusion clause.