The Department of Finance has been congratulated by the Australian Small Business and Family Enterprise Ombudsman for ensuring subcontractors on Government projects must be paid in 30 days or less.
The Ombudsman, Kate Carnell said the same obligation was to be included in every secondary subcontract.
“Our Payment Times and Practices Inquiry recommended just that, and so did our submission in June to the Joint Select Committee on Government Procurement,” Ms Carnell said.
“Late payments affect a small business’s cash flow, impact on business growth and, in worst-case scenarios, can put a business out of operation.”
She said the payments clause were part of the Commonwealth ClauseBank, which provides predrafted contract terms for use in existing contracts or in customised contracts.
“The clause also determines that only relevant obligations are included in subcontracts instead of all obligations from the main contract,” Ms Carnell said.
“The 30 days or less payment time and inclusion of only relevant subcontractor obligations are significant steps in the drive for fairness and balance in Commonwealth projects.”
She said she expected all Australian Government Departments and Agencies to use the clause in contracts and give small businesses and contractors peace of mind — financially and mentally — when working with Government.
