21 October 2019

It still surprises me when people think that procurement is a single event and it’s just about a tender. That couldn’t be further from reality; it’s about maximising “value for money” from the whole procurement exercise and this can only be achieved by having end to end involvement.

Stage 1

Before even thinking about how to procure the work; you must allow time to review and reappraise what you’re procuring. This will cover areas such as the required number of suppliers, changes to service and whether it’s providing value for money.

This is also the stage to get feedback from stakeholders; ask suppliers how they can improve the service so that you obtain better value for money. Perhaps most importantly take the opportunity to involve tenants in the process, ask them what they think of the service, how it could be improved and what adjustments they would like to see. Utilise available data to assist in your decision making.

Stage 2

Once you know what you want it’s time to consider how to procure it and this will involve what’s best for you. Expect to require a bespoke solution and never be satisfied with a standardised offering.

If you have the time, knowledge and skills you may want to procure it in-house. If you don’t have the resources you may want to utilise an existing framework. If SME’s and local regeneration are your focus, you might opt for a Dynamic Purchasing System (DPS). Or it will be a mix, with internal procurement and surveyors progressing areas they are confident with which maximise economies; whilst framework/DPS providers with their expertise will pick up the remainder.

However, it’s not always that straightforward. You may have the skill, knowledge and time; but if you are a small housing association you may not be able to achieve the scale that interest large contractors and thus deliver economies of scale. One solution I have been involved with was to assist a few small housing associations to procure a joint kitchen/bathroom contract and the savings proved significant.

You need to review the specification documents to ensure you’re not asking for something you don’t need. Alternatively your service may have changed since you last procured it and to simply use the last set of documents may result in claims for extra work and not deliver the service you require.

Stage 3

Too often clients do excellent work in reviewing the service, revising it to provide value for money; award the contract and then in twelve months wonder why they haven’t made the savings they expected.

What should be happening is that the supplier needs to be managed and appropriate KPI’s need to be set, monitored and reviewed. Regular review meetings should take place and service issues highlighted and addressed promptly.

Data also needs to be collected to deliver insight on spend. This needs to be collected internally, not only to identify trends, overpayments and exceptions; but also externally on a regional/national basis to ensure benchmarking exercises on cost and service can be completed.

To find out more about effective procurement and best practice, join me at the Asset Management and Maintenance Conference & Exhibition.

Mike Williams

Mike Williams is Relationship Manager for Asset Management at Procurement for Housing

Mike is a Fellow of the Chartered Institute of Building, with over thirty years’ experience working in the assets profession, for clients, contractors and DLOs; of which around twenty five years covered asset management and fifteen years DLOs. He has worked for large urban through to small rural RSLs and local authorities, contractors and at all levels up to director. In addition he has held responsibility for tenant involvement, leaseholders and regeneration.

Now with Procurement for Housing, Mike is working with members to achieve maximum benefit from their procurement.

Maximising value from procurement and contract management