How to manage payments for Digital Outcomes and Specialists services.
When you’ve found the Digital Outcomes and Specialists supplier that best meets your needs, you must agree how and what you’ll pay before your contract (also known as a ‘call-off’ contract) can start.
The contract must include:
- the total cost of the work
- the payment approach being used, for example fixed price or time and materials
- any discounts
- a breakdown of costs
If you’re buying an outcome or specialist, the contract must also specify:
- the number of roles needed
- the day rate for each role
- how long you’ll need each role for
You should then split the work that needs to be done into separate parts, called ‘statements of work’. The work covered by each statement of work must take no longer than a month. All statements of work must include:
- a clear description of the work that needs to be done
- how long the work should take
- a list of people needed to do the work and their roles
- day rates for each role if you’re buying an outcome or specialist
- the total cost
When to pay
For a Digital Outcomes and Specialists contract, a supplier must send you an invoice when both parties have agreed that a statement of work has been completed.
A supplier invoice should include:
- the buyer’s purchase order number (included on the contract)
- a buyer contact name, number and email address
- a project name and reference (if you have one)
- a breakdown of the invoice charges
- the supplier’s payment information, for example bank account details for Bacs payment
You must pay your supplier on time. The government’s prompt payment policy says that buyers should pay most invoices within 5 days of receiving them. Other public sector buyers may also have their own internal payment commitments which they should consider when they arrange payment.
The Digital Outcomes and Specialists contract says that you must pay suppliers ‘within 30 days of receipt of a valid invoice’.
How to pay for digital outcome services
There are 3 different ways to pay suppliers for digital outcome services:
- fixed price
- time and materials
- capped time and materials
You must use the payment approach you chose when you published your requirements.
A fixed price approach can be more expensive because the supplier owns most of the risk. It works best when your requirements are well defined so the supplier can provide an accurate quote without incorporating extra costs.
The supplier must do all the work you specify in each particular statement of work within the time you agreed it would take.
Time and materials
A time and materials approach means you own more of the risk. The supplier can send a pricing matrix showing how long they need to provide the work. If it takes longer to do the work defined in a statement of work, you pay the day rate and expenses for any extra days worked.
Capped time and materials
A capped time and materials approach is the same as a time and materials approach but there’s a limit on how much you have to pay for the work. If you reach the limit before the work is finished, the supplier has to complete the work at their own cost. If the supplier finishes the work before they said they would, you only pay them for the time they took to do the work.
How to pay for digital specialist services
You must pay specialist suppliers for the time they work using the day rate agreed in the contract. The day rate excludes VAT, travel and expenses. Travel and expenses should be agreed before invoicing and capped according to your organisation’s expense policy.
You’re also responsible for checking that the way they work meets the rules for off-payroll workers (known as IR35).
How to pay for participant recruitment services
The price participant recruitment suppliers provide includes all incentives, recruitment, and travel and subsistence costs paid to participants. You don’t pay for participants who don’t attend on the day. Suppliers are responsible for paying participants directly.
How to pay for user research lab services
The supplier provides a total cost for the labs based on the facilities you need and how long you need them for.
What to pay
You can only pay a supplier the prices you agreed to in the contract. The supplier provided these when they applied for the work.
If the statement of work changes, you can pay the supplier up to 20% more than the price agreed in the statement of work. The supplier must get written approval from you before they charge over the price you agreed in the contract. You can’t pay more than the agreed price if you’re buying access to user research labs.
The supplier must invoice you for the full cost of the service. This must include any services from a third party that subcontracts through the supplier.
Read more about how to award a Digital Outcomes and Specialists contract.
You can provide information on your travel and expenses policy in the buying process. This should determine any expenses the supplier can include on their invoice.
All other charges must relate to the services agreed in a statement of work.
Keeping accurate records
The supplier must keep an accurate record of the time they spend working for you. If you ask them to provide records of the time they’ve spent on your service or project, they have to give them to you.
If things go wrong, for example if a supplier hasn’t been paid on time or has been paid the wrong amount, both parties need to work together to resolve the dispute.
Read more about how to handle disputes under ‘managing disputes’ in the Digital Outcomes and Specialists contract.
You should make sure that someone is available to deal with payment queries.
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