Reviewing a subcontract under a government contract

A subcontract under a government contract passes the prime contractor's obligations to the public body down to the supplier, and the prime's drafting decides how much of the public contract the supplier inherits: the specification, the service levels, the audit and transparency duties, the exclusion grounds and the termination rights, with the prime's own margin and protections added. I review the subcontract from the supplier's side and return it marked up with a written explanation of the changes and which ones the prime is likely to accept, for a fixed fee of £895 in five working days.

Who this is for

Businesses in England and Wales that have been offered a subcontract by a prime contractor delivering a contract for a government department, an arm's length body, the NHS, a local authority or another contracting authority, and want to know which public contract terms bind them, what payment terms apply and how they can be removed. The parties are businesses, so consumer law does not apply.

What to look for in a subcontract under a public contract

Flow-down and the public contract you have not seen

The subcontract will say that the supplier is bound by the public contract 'so far as applicable', and that phrase is where the risk sits, because the supplier is bound by a document it may not have been shown. The review asks for the public contract or the relevant schedules, checks which obligations are flowed down (specification, service levels, security, data, audit, key personnel, business continuity) and which are not, and marks up the clause so that the supplier is bound only by identified provisions that it can see, with the prime responsible for anything else the public body requires.

Payment and the 30-day rule

Section 73 of the Procurement Act 2023 implies into every public sub-contract the same payment terms that section 68 implies into the public contract: payment within 30 days of a valid invoice, so a subcontract that provides for a longer period or for pay-when-paid is contrary to the implied term. The review checks the invoicing procedure, the definition of a valid invoice, the dispute mechanism that stops the clock, and whether the Late Payment of Commercial Debts (Interest) Act 1998 is preserved. Where the work is construction, the Housing Grants, Construction and Regeneration Act 1996 payment notice rules and adjudication right apply as well.

Exclusion grounds, sub-contractor directions and being replaced

Under section 28 of the Procurement Act 2023 a contracting authority may treat the prime as excludable by reference to a sub-contractor that is on the debarment list or meets an exclusion ground, and under section 72 it may direct how sub-contracting is dealt with, including requiring a sub-contractor to be replaced. The prime will pass that risk down as a right to terminate the subcontract without compensation. The review checks that termination on that ground is limited to a direction the authority has in fact given, that the supplier is paid for work done, and that the supplier is told of the ground so it can respond before it is removed.

Transparency, audit, freedom of information and modern slavery

Public contracts carry publication, audit and information duties that the prime will flow down. The Freedom of Information Act 2000 means the authority may have to disclose the prime's contract and, through it, the supplier's pricing and terms, so the review marks the information the supplier regards as commercially sensitive and asks for a consultation obligation before disclosure. Audit rights should be limited to records relating to the subcontract, on notice, at the auditor's cost. Where the prime is a large business, section 54 of the Modern Slavery Act 2015 statement obligations and section 7 of the Bribery Act 2010 adequate procedures will be reflected in warranties the supplier must be able to give.

Termination that follows the public contract

The prime will reserve the right to terminate the subcontract whenever the public contract ends, including under the implied right to terminate in section 78 of the Procurement Act 2023 for exclusion grounds and other events, and for the authority's own convenience. The review checks that termination on the public contract ending is on the same notice the prime receives, that the supplier is paid for work performed and committed costs, that exit assistance is paid for, and that the subcontract does not give the prime a wider termination right than the authority has against the prime.

Staff, data and the transfer at the end

Where the subcontract takes over a service from an outgoing supplier, the Transfer of Undertakings (Protection of Employment) Regulations 2006 may transfer staff to the supplier on day one and away from it at the end, and the subcontract should allocate the cost of both. Where the supplier processes personal data for the authority, the prime will flow down the processor terms required by Article 28 of the UK GDPR and the Data Protection Act 2018, and the review checks that the security standards, breach reporting periods and sub-processor restrictions are ones the supplier can meet.

What it costs

Complex review, £895. Heavily negotiated or unusually complex documents. Five working days.

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

The prime says the public contract terms are not negotiable because the government imposed them. Is that right?

Partly. The obligations the authority requires cannot be changed at subcontract level, but the prime chose how to flow them down, what margin to keep and what extra protections to add, and those are negotiable. The review separates the two so you push only on what the prime controls.

The subcontract says we are paid when the prime is paid. Is that allowed?

It is contrary to the payment terms implied into public sub-contracts under the Procurement Act 2023, which require payment within 30 days of a valid invoice. The review marks the clause up to the implied term and, for construction work, applies the pay-when-paid ban in the Housing Grants, Construction and Regeneration Act 1996.

Can the authority have us removed from the contract?

It can direct the prime on sub-contracting, including replacement, where an exclusion ground applies or the public contract allows it. The review ensures that the subcontract only lets the prime remove you on a direction the authority has given, that you are told the reason, and that you are paid for the work done.

Related guidance and services

• Contract review, £895, the service this page describes
• Terms and conditions drafting, £995
• Reviewing a public sector contract before you bid
• Reviewing a teaming agreement for a joint bid

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.