Leading construction body welcomes government action on supply chains: but more needs to be done

Construction body, the Specialist Engineering Contractors’ (SEC) Group, has welcomed the Government’s announcement that it will be introducing a package of measures to support SMEs supplying to government.

SEC Group’s CEO, Rudi Klein, said that he was particularly pleased that the Government intends to exclude poor payers from government procurement.

He said: “We have been urging the Government to introduce a yellow/red card system for a long time. The yellow card is a warning to improve payment performance and the red card excludes a continuing poor performer from bidding for government contracts for a period of 2 to 3 years.”

Klein added that if such a system had already been in place Carillion would have been excluded from government contracts.

However SEC Group believes that on payment security the Government needs to go further:

  • It should legislate to require that project bank accounts are put in place for all public sector projects, and
  • It should now give its support to a Private Member’s Bill (now in the House of Commons) that will protect cash retentions.

SEC Group also welcomed April’s action by the Prime Minister in urging Departments to nominate a Minister as Small Business Champion. Rudi Klein said this was, again, heading in the right direction, but more still needs to be done.

Klein added: “The Carillion debacle has revealed the appalling level of abuse heaped on construction supply chains. We should also be considering the introduction of a statutory regulator (similar to the Groceries Code Adjudicator) to challenge the behaviour of large firms and, if necessary, fine them in the worst cases of abuse.”


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