New research from payment specialists Allpay and Consortium Procurement indicates that the increasing complications of tendering for contracts is preventing housing providers and local authorities from reviewing and procuring new services, due to the high financial and time costs associated with completing a full tender process.
According to the research, a third of all participants (32 per cent) believe the tender for service contracts is the most challenging element during the review process. As such, 67 per cent of housing providers plan to switch fewer than five services in the next 12 months.
Pierre Galeon, commercial and corporate development director, Allpay, said, “The long-standing complications of tendering for services are well documented – the timescale and cost, administrative issues, the need for OJEU compliance, and the overall management processes all take their toll on the public sector.
“The research indicates that housing providers are increasingly reluctant to review their existing service provider contracts. This could not only mean that budgets take a big hit, but tenants might receive lower quality services. Housing providers and local authorities should look at alternative means of reviewing service contracts, such as framework agreements.”
According to the research, only a quarter (27 per cent) of the sample of housing associations had assessed the market for new service providers via a framework agreement.
Framework agreements are usually set up to cover things like office supplies, IT equipment, payment services, and repairs and maintenance services. 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.
Tracy Harrison, commercial director, Northern Housing Consortium, said, “We were surprised to see so few organisations opting for the low-hassle, low-risk route of framework agreements. We expect that to change over the next few years as more organisations realise the flexibility and benefits of framework agreements.”
