Speak out on wrong contracts, Whitehall tells suppliers

The UK government wants suppliers to speak out when contracts are “no longer fit for purpose”.

In a new Supplier Code of Conduct, the government asks suppliers to “speak out” when a project or service is “unlikely to succeed” because of government behaviours or poor contract management.

“We also expect suppliers to speak out, without fear of consequences, when a project or service is unlikely to succeed because of our behaviours or a lack of good governance,” said the code. “We expect the same behaviour when a contract is no longer fit for purpose, eg in its contractual stipulations or measures.”

The code also includes a plea to suppliers not to exploit an incumbent or monopoly position or to impose “opportunistic pricing” in an urgent situation.

“Citizens expect government to obtain value for every taxpayer pound and to be able to demonstrate that long-term value to the UK taxpayer. This means that contracts should be priced to offer sustainable value throughout their life, including when changes are needed,” said the code.

“While we accept our suppliers make a profit margin in return for the risk they are accepting, we expect suppliers not to exploit an incumbent or monopoly position, an urgent situation or an asymmetry of capability or information to impose opportunistic pricing.”

The code said disputes should be resolved “promptly and fairly during the life of a contract through good relationship management and, where appropriate, contractual dispute resolution mechanisms”. It said that “taxpayer and supplier interests are rarely best served by protracted litigation”.

The code includes clauses on employees, service users, business practices and standards of behaviour.

Gareth Rhys Williams, the government chief commercial officer, said: “Government relies on its suppliers for the delivery of many important public services, for assistance in delivering policy and for the construction of public assets. While underpinned by a contractual relationship this reliance needs to be based on a bond of trust.

“Taxpayers expect that government’s suppliers will look after their interests and deliver on the promises that they make. They expect that suppliers will behave ethically and treat their service users, employees and subcontractors fairly and with respect.”

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