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Five common oversights in housing association procurement

Common oversights in housing association procurement

As housing association procurement teams up and down the country grapple with ever shrinking budgets and calls for more efficiency, there has never been a better time for the UK Government and European Commission to step in and help out.

A year on from the implementation of the Public Contracts Regulations 2015, housing associations are now on target to achieve a 10% cost efficiency through the new legislation, but is there more that procurement teams can do to achieve even greater efficiencies?

Below, we take a look at just five common oversights that you and your team may have missed, and how they can help you maintain a quality level of service while being as efficient as possible with your budget.

Fully embrace the digital future

Social housing procurement teams have already embraced the digital era, making use of e-sourcing platforms, PQQ tools, and online procurement organisations.

You will be aware that in the Public Contracts Regulations 2015, social housing procurement is expected to be fully digitised by 2018 – less than two years away. While industry sources, such as Inside Housing, were quick to point out that this process would mean more work for procurement teams upfront, the standardisation and time saved through keeping contractor and tender documents online could be significant.

Moving towards a fully digitised future before the 2018 deadline not only means that you’re not rushing around last minute to comply, it also means you can safeguard the future of the association’s procurement procedures, and start seeing a real efficiency benefit earlier.

Screening new contractors thoroughly

PQQs, as you know, are a great way to gather essential information from contractors before moving onto the next step of the tendering process. Asking the right questions associated with the products or services that you are requesting, can inform your team better when it comes to making decisions.

Unfortunately, many associations still use standardised PQQs that have simply become a necessity in the process, rather than a way of extracting useful information. However, screening new contractors thoroughly with a bespoke PQQ, something we talk about more in our All-in-one PQQ Checklist Guide, can give you a greater understanding of who is right for the job – saving time sourcing and getting the job done quicker.

Gain a better understanding of your prospective contractors >

This has become even more essential following the updates to the Public Contracts Regulation whereby associations test for contractor and supplier capability and financial strength until the contract has been awarded. Likewise, it has now become harder to exclude bad suppliers who have submitted for a new tender. Because of this development, there has never been a better time to get your PQQ template right.

Don’t discount SMEs

In a push to spread the wealth from public contracts across the full spectrum of contractors and suppliers, an initiation by the Government has been introduced to include SMEs in future work. Public housing associations with contracts over £25,000 and under the EU tendering threshold will be automatically added to the Government’s contracts website.

While PQQs will be scrapped for this service, essential health and safety, insurance and financial information will be gathered to ensure contractors meet the most basic of requirements. While associations may have good relationships with larger organisations, the chance to save money, and potentially get a better product or service, could mean that working with SMEs is the best option going forward.

Pushing for a bargain

You wouldn’t be in procurement if you didn’t get a buzz from achieving a bargain. While some associations do still accept the first tendering quote that comes through to their email, rule changes have meant that pushing for a bargain has never been so accepted or standardised.

While the trick of accepting a supplier tender and then working with them to reduce the cost has now been killed off, new legislation means associations can still get a better deal while feeling they’re not pushing suppliers too hard. Post-tender negotiations mean that you can go back to all tendering companies and ask them whether they wish to stick or twist with their initial quote. Pushing the onus back on the suppliers like this, knowing they’re still in competition with other firms, may see a larger discount than you imagined.

Contract growth flexibility, at last

Common sense has prevailed. The regulations around the growth of an initial contract with a supplier or contractor has been relaxed for over 12 months now. This means that:

  • Contract value can increase by 50% due to technical or unforeseeable reasons
  • Contract value can increase by 10% for services and supply contracts
  • Contract value can increase by 15% for works contracts

Instead of simply guessing on the size of the project where your knowledge is limited, you can now work strategically with a contractor or supplier to get the job done in the allocated time frame. If you need the extra budget to make it happen, as long as it falls within the percentage boundaries, you can concentrate on making this happen, rather than re-tendering.

The all-in-one PQQ checklist

If saving money and becoming even more efficient is your goal for your housing association, than starting to take another look at these five common oversights above will help you refocus your efforts.

This all begins by taking a look at your internal processes, and seeing what you can do to improve and get the most from your contractors. In the free guide, All-in-one PQQ Checklist for Housing Associations, we go over the essential requirements from your pre-qualification questionnaire, following the regulation change in 2015, and how you can use PQQs to make time and money savings right from the start of the process.

Download the free PQQ checklist on our web page here.

Download the all-in-one PQQ checklist for Housing Associations

Best practice guide to supply chain compliance now available as a free download.