ODA makes U-turn over payments to specialists

The Olympic Delivery Authority has ruled out using a pioneering payment practice on large schemes that benefits specialist companies.

Howard Shiplee, the ODA’s construction director, told MPs at a business, enterprise and regulatory reform select committee hearing last Tuesday that “project bank accounts”, a safeguard against non-payment, “would not be appropriate” for use on main Olympic venues.

Project bank accounts permit supply chain payments to be processed through a single account, administered by the client and main contractor, which gives greater assurance of payment continuity. The Office of Government Commerce recommended its use in a Fair Payment Charter this year.

The ODA’s 2012 construction commitments, published in July 2006, also said “all contracts will incorporate fair payment practices including project bank accounts, where practicable and cost effective”.

Now, Shiplee appears to have reneged on that agreement by ruling out the method for the Olympic stadium, the aquatics centre and the velodrome.

He said: “It would not be appropriate to intrude on the payment processes of subcontractors that are employed by tier-one contractors.”

Shiplee insisted this did not mean the ODA was unconcerned about late payments. He said: “We’re not turning a blind eye. When we are paying properly, we will ensure tier-one contractors are doing so too. If it is not reflected down the supply chain, we will take a very dim and proactive view on it.”

He said he had not ruled out the use of project bank accounts on smaller projects where a construction management route was used.

Shiplee also disclosed that the Border and Immigration Agency was in talks about joining the police on-site security team.

Tarique Ghaffur, assistant commissioner of the Metropolitan Police, said Olympic construction workers had already been vetted for terrorist connections.