Invoicing and Payment Terms

The invoicing and payment terms are included in the Payment Mechanism for reference. They are primarily set out in the Project Agreement in [Part 5, clause 37]. Payment is based on standard payment terms whereby the Contractor delivers the service and raises an invoice at the end of the month.  The Authority then pays the invoice 30 days after receipt of the invoice from the Contractor (assuming it is valid and there are no disputed amounts). Whilst other payment terms are possible on a case by case basis, Authorities must consider the value for money benefits of any proposals by the Contractor and HM Treasury guidance on prepayments.

Whilst this payment mechanism continues to allow for the application of a lag in the calculation of deductions for performance and availability of one month, 4Ps still consider that deductions that occur during the month of service delivery should form part of the invoice for that same month.  To facilitate this, it may be necessary to operate a cut-off in advance of the month end to collate the Service Performance Shortfalls for inclusion in the invoice.  Fire & Rescue and Police Authorities should therefore consider the benefits that can be achieved from seeking a facilities management solution with a 24/7 Help desk that is fully integrated with the Contractor's system for monitoring and reporting Service Performance Standards. The system therefore needs to cover all the hard and soft services in order to provide accurate and timely information to support the production of invoices. Where this is not possible or the solution does not offer value for money as a result then no deductions will apply for the first payment period and there will be a one month lag in the calculation and invoicing of deductions for each subsequent payment period thereafter.