SMEs to benefit from Network Rail contract changes

Posted on 13 Jul 2018 and read 328 times
SMEs to benefit from Network Rail contract changesNetwork Rail is making significant changes to contracts, ahead of the five-year funding period (Control Period 6, 2019-2024) that will underpin the delivery of its next multi-billion pound-investment programme.

The most substantial changes to contract terms will commit suppliers to paying their sub-contractors within 28 days and remove the use of retentions on those payments — something that has long been an area of debate across the industry, due to the detrimental effect it can have on smaller suppliers.

The changes are some of the improvements being made to help create a healthier environment for suppliers at all levels; they will result in the rail industry becoming the first sector in the wider UK construction industry to enforce these payment measures, overhauling the way large contractors do business with their supply chain.

Having implemented a best-practice Fair Payment Charter and applied these principles to its own payments to suppliers back in 2011, Network Rail describes the decision to formalise this regime for CP6 as ‘the next natural step’
— and something that its major contractors support.

Stephen Blakey, Network Rail’s commercial director (www.networkrail.co.uk), said: “The Fair Payment Charter was about recognising that cash-flow is the ‘life-blood’ of every supplier by committing to paying for goods and services in a fair, predictable and timely way.

"Harnessing the support we have already received from our major suppliers, we have simply taken the next natural step and formalised that approach for CP6.

"Culturally, it sends a huge signal as to the value we place on a sustainable supply chain and the way we want to do business.”

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