Thursday, April 29, 2010

Freight Trucking Association Slates QinetiQ

Changing Terms of Payment is Unacceptable and Unaffordable
Shipping News Feature

UK – The Road Haulage Association (RHA)has come out to openly criticise the defence technology suppliers QinetiQ for drastically altering its terms of payment unilaterally and without notice. The policy of extending terms of payment, particularly from a company with mainly Government contracts which are normally settled on time. One of the RHA’s members drew the attention of the association to the policy which met with a particularly scathing reaction.

RHA chief executive Geoff Dunning commented:

“QinetiQ, with this action, is spreading bad business practice and is breaking both the spirit and letter of the Prompt Payment Code. To make matters worse, QinetiQ is a major supplier to central government – the Ministry of Defence – which has a policy of prompt and reliable payment.

“Our member had a contract that stated that invoices would be paid in 30 days. That has become 60 days, with little notice. I am writing to the business secretary, Lord Mandelson, to urge him to apply pressure to QinetiQ to reverse this decision and to apply a broader principle across government – that if you want to benefit from prompt payment by government, you must also pay your suppliers in an acceptable manner”.

QinetiQ is the latest “blue-chip” company to announce to its suppliers that it would increase the amount of time it takes to pay its bills. In this case, notice was given in little more than one week from the new terms, making it extremely difficult for SME suppliers to take account of the impact on their cash flow. This appears to be a policy which affects freight transport companies, as many are reliant on these larger contracts they are seemingly viewed as an easy target by corporations bent on controlling cash flow.