Under PPN 021, all central government departments must conduct regular spot checks on contracts over £5 million annually. You're now responsible for ensuring 30-day payment terms cascade throughout the entire supply chain—not just your direct suppliers.

What's Actually Changing

The Procurement Act 2023 makes you accountable for payment practices three levels down in your supply chain. When a small business subcontractor doesn't get paid within 30 days, it becomes your compliance problem.

The numbers are stark: late payments cost the UK economy £11 billion annually and force 38 businesses to close daily. Most failures happen in government contract supply chains where small businesses get squeezed by lengthy payment terms.

Your new responsibility: Monitor every significant subcontractor's payment performance, not just your prime contractor's.

How Often You Need to Act

PPN 021 requires spot checks at least every six months from contract award. But the reality is more complex:

  • Random sampling: Regular invoice checks to deter non-compliance
  • Targeted checks: Additional monitoring when risks are identified
  • 20-day response deadline: Immediate action required when issues arise

Most buyers will conduct checks far more frequently than the minimum, especially as they learn which suppliers and sectors present the highest payment risks.

When Suppliers Don't Comply

Non-compliance escalates quickly through several stages:

First response: Immediate engagement with prime contractors to develop corrective action plans with defined timelines.

Escalation options: Increased monitoring frequency, enhanced reporting requirements, or formal contract performance action.

Serious consequences: Contract termination or exclusion from future opportunities for persistent failures.

Independent oversight: Suppliers can report payment issues directly to the Public Procurement Review Service at publicprocurementreview@cabinetoffice.gov.uk.

The Administrative Reality

For government buyers managing multiple high-value contracts, PPN 021's requirements create significant new workload pressures. The bi-annual spot check mandate, combined with invoice sampling across complex supply chains, adds substantial administrative tasks to already busy procurement teams.

Each spot check requires:

  • Contacting subcontractors throughout the supply chain
  • Collecting invoice and payment documentation
  • Verifying 30-day compliance against Section 73 requirements
  • Documenting findings and follow-up actions within 20-day deadlines

New skill requirements: Spot checking extends beyond traditional procurement competencies into financial analysis and payment performance assessment—areas where procurement teams may need additional training or support.

Process complexity: Manual data collection from multiple supply chain levels creates opportunities for inconsistencies and delays, particularly when managing the 20-day response deadlines PPN 021 requires.

The PAIDD Command Center Solution

Instead of chasing suppliers for data every six months, PAIDD connects all your £5M+ contract suppliers' accounting systems directly to your centralized dashboard.

Real-time visibility: See payment performance, compliance scores, and risk alerts across your entire contract portfolio in one integrated view.

Automated alerts: When any payment exceeds 30 days anywhere in your supply chains, you know immediately—not months later.

Instant compliance reports: Generate comprehensive spot check documentation at the click of a button, complete with audit trails meeting PPN 021 requirements.

Strategic insight: Transform routine compliance into competitive advantage through unprecedented supply chain intelligence.

Your procurement team focuses on strategic supplier management instead of administrative compliance tasks. You gain superior visibility and control while eliminating the resource burden of manual monitoring.

The Choice Ahead

October 2025 presents a clear decision: implement time-intensive manual processes that consume significant resources while providing limited visibility, or leverage automated systems that transform compliance oversight into strategic advantage.

For procurement teams managing multiple high-value contracts, this choice determines not just regulatory adherence, but operational efficiency and value creation capability.

The clock is ticking. Choose automation, choose strategic advantage.

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