Contracting authorities, including utilities, will soon be required to accept electronic invoices issued as a result of the performance of public contracts.
The new Public Procurement (Electronic Invoices etc.) Regulations 2019 (the Regulation) provide that from 18 April 2019 central contracting authorities will be required to accept electronic invoices issued as a result of the performance of contracts. Sub-central contracting authorities and utilities will have an extended period until 18 April 2020 from which to comply with the regulation.
However, it is important to note that a sub-central contracting authority, which was or will be acting as a central purchasing body, will need to comply with the Regulation from 18 April 2019.
The Regulation requires that any contract must include an express provision requiring the contracting authority to accept and process an electronic invoice, submitted for payment by or on behalf of the contractor. This is subject to the invoice being undisputed and that it complies with the standard on electronic invoicing.
A failure to include such express provision does not invalidate the contract. Subject to the invoice being undisputed and that it complies with the standard on electronic invoicing, it would be an implied term of the contract. This would require the contracting authority or utility to accept and process the electronic invoice.
These changes apply to contracts awarded under the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016, the Concessions Contracts Regulations 2016 and the Defence and Public Contracts Regulations 2011.
In light of the above, it is therefore essential that all central contracting authorities and sub-central contracting authorities review their processes. Any changes that need to be made regarding electronic invoices (i.e. adding express clauses in template contracts and their internal invoicing procedures) should be identified to allow them to comply with the Regulation.
Please note, an electronic invoice complies with the standard of electronic invoicing mentioned above, where it complies with the European standard published in the Commission Implementing Decision (EU) 2017/1870.
