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Housing associations say 'complicated tender process' key barrier to procurement

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Housing associations say 'complicated tender process' key barrier to procurement


Published by Anonymous for in Housing and also in Local Government

Housing associations say 'complicated tender process' key barrier to procurement Housing associations say 'complicated tender process' key barrier to procurement

The increasingly complicated nature of tendering for contracts is preventing housing associations and local authorities from reviewing and procuring new services, according to new research.

A survey of 100 housing professionals carried out by payment collection specialists, allpay, in partnership with Consortium Procurement highlights the high financial and time costs associated with completing a full tender process as a barrier in the procurement process.

Pierre Galeon, commercial and corporate development director at allpay, said: "The long standing complications of tendering for services are well documented - time-length and cost, administrative issues, the need for OJEU compliance, and the overall management process rightly takes its toll on the public sector.

“The research clearly indicates that housing authorities are increasingly reluctant to engage in reviewing their existing service provider contracts. This could not only mean that budgets take a big hit, but the end users – the residents – could be negatively impacted, both in their pockets and through the quality of service that they receive,” he said.

In light of the findings, Galeon suggests that public sector departments should look at alternatives to the traditional tender process when identifying a new service provider.

"This problem is not unique to housing, but it does have the potential to create a vendor lock-in market dominated by a core selection of service providers. Housing associations and local authorities should look to alternative means as to how to review existing service contracts. One such alternative is a framework agreement.”

According to the research, just a quarter (27%) of the sample of housing associations had assessed the market for new service providers via a framework agreement, compared to a tender process, which accounts for almost 70% of all activity.

Framework agreements are commonly set up to cover things like office supplies, IT equipment, payment services, repair and maintenance services etc. If the framework agreement is awarded to one provider, then the purchasing authority can simply call-off the requirement from the successful supplier as and when it is needed without the costs and time of going to tender.

As the framework has already been advertised in OJEU and follows all the usual EU procedures and rules, housing associations and local authorities avoid any legal challenges arising from non-compliance that can commonly arise through tender exercises.

Tracy Harrison, commercial director of the Northern Housing Consortium, said: "We were surprised to see such a large proportion respond that they are still going out to tender themselves, rather than opting for the low-hassle, low-risk route offered by frameworks.

"That is something we expect to see changing quite significantly over the next couple of years, as more and more organisations realise the flexibility and the benefits frameworks can offer."


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