Sellafield Supply Chain Notice – Coronavirus COVID-19

Sellafield Supply Chain Notice – Coronavirus COVID-19

Changes to Sellafield’s procurement practises in response to the Coronavirus pandemic.

Supply Chain Covid-19 procurement notice

An update for our supply chain from Alan Hartley, our interim supply chain director

In these very challenging times, we are committed to playing our part in supporting our suppliers to ensure they remain sustainable.

To enable us to do this and to ensure service continuity during and after the COVID-19 pandemic, Sellafield Ltd will continue to pay those suppliers considered central to the delivery of our mission that have been affected by the virus.

This is on the basis that throughout this period we maintain value for money for our business and the UK taxpayer and enable the supply chain and Sellafield Ltd to return to business as usual at the end of the pandemic.

How will we deliver this with effect from March 2020

  1. Where feasible and following government guidance we expect our suppliers to continue to perform work under the existing contract and we will pay for this work in accordance with the contract.
  2. Where there are arrangements under the existing contract to obtain relief from contractual mechanisms such as service credits or key performance indicators we expect these to be applied in accordance with the contract.
  3. Those suppliers deemed central to the delivery of our mission may also request additional relief in the form of a support payment due to the impact of COVID-19, and where Sellafield Ltd agrees that such relief is required, we will enter into a contract variation (where it is lawful to do so) in order to provide such relief. We will provide a standard form for requesting such relief soon. The support payment is intended to ensure that our supply chain remains intact and able to return to business as usual at the end of the pandemic.
  4. In their request for each payment, suppliers will need to set out exactly what support is needed and why (for example staff wages or sub-contractor payments). Profit margin will not be payable on any undelivered aspects of the contract. We also expect suppliers to mitigate costs where possible, for example by performing alternative work for us. We will provide a standard monthly spreadsheet to be completed by each supplier supporting their request for payment with details of costs to be covered.
  5. To enable this, suppliers will need to operate on an open book basis to allow us to check at a later date that payments that have been made are in accordance with the agreement to provide support- and the details provided in the standard monthly spreadsheet. If a supplier does not spend any support payments in line with what it said it required the payments for, fails to act transparently and with integrity, or takes undue advantage of the relief, Sellafield Ltd can take the actions necessary to recover any support payments.
  6. Subject to the supplier having demonstrated that such support is necessary for payment of staff and their supply chain, supported by the monthly spreadsheet analysis, we will work with each supplier, on a strategic and supportive basis to agree the way forward. Where we pay based on outputs, outcomes and/or milestones we will work with each supplier to agree what our Latest Best Estimate would have been for the months of March, April, May and June and where it is no longer feasible for the supplier to perform work to that value in any of those months, we will make support payments up to an amount sufficient to restore our total monthly payment to the amount of the LBE. We will enter into an agreement with those suppliers in line with the principles set out above and make retrospective adjustments to the payments if necessary, to be administered via a monthly return which the supplier will complete.
  7. We expect these arrangements to be flowed down through subsequent tiers of the supply chain as required, in order to provide support to our full supply base. We will require verification that this is the case.
  8. This proposal is intended to ensure that our suppliers’ workforce who support our work remain in post and are receiving their salary. Suppliers will need to ensure that they are not making use of this proposal and claiming separate relief from the Government to the effect that the supplier gains an undue advantage by claiming relief twice for the same hardship. As part of this, suppliers will need to ensure that they are not making applications for support to the HMG Job Retention Scheme offer of 80% payment of employee wages in relation to any support provided by this proposal.
  9. Provision of support payments will be conditional on the supplier not invoking force majeure under the contract.
  10. Our finance team will ensure that suppliers are paid promptly and quickly, but normal invoicing frequency and dates will remain.
  11. If these measures are not sufficient for any supplier we will deal with this on a case by case basis. Please speak to your commercial contact for advice.

Whilst we appreciate all our suppliers will be keen to understand if this is applicable to them, we ask that you remain patient whilst we work through our contracts. Your Category Manager will be in contact with you as soon as we have the information available.

We thank you for your patience at this difficult time and ask that you continue to flow this good practice down into the lower tiers of our supply chain.


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