§ Sir Michael MarshallTo ask the President of the Board of Trade what policy guidelines are currently in place within his Department and the purchasing organisations for which he has responsibility in respect of the prompt payment of commercial debt, particularly as it relates to small business suppliers.
§ Mr. Leigh[holding answer 2 June 1992]: Government Departments, including their executive agencies, are required to pay their bills promptly. The timing of 566W payment should normally be stipulated in Government contracts. Where there is no contractual provision or other understanding, Departments should pay within 30 days of receipt of goods/services or the presentation of a valid invoice or similar demand for payment, whichever is the later.
To help encourage prompt payment of bills by Government contractors to their sub-contractors, all Government contracts are to contain a clause requiring the supplier or contractor to pay its sub-contractors promptly. In the absence of normal practice to the contrary for that type of contract or other special circumstances, the commitment should be to pay the sub-contractor within 30 days of receipt of a valid invoice or similar demand for payment as defined by the contract.