How should a housing co-op choose its service provider or

contractors?

Tom Hopkins26th July 2015

Procurement – what’s that then?

Procurement is a process for acquiring goods, services and works; buying is just one part:✓Identifying need✓Planning✓Packaging✓Specifying✓Tendering – OJEU compliance and thresholds✓Assessing✓Commissioning✓Contract negotiation✓Financial control✓Review and management

Procurement – why?

✓ Budgeting ✓ The Value for Money Standard – understanding

the relative costs of providing services✓ Value for Money self assessments✓ Gaining an optimal combination of costs and

benefits to meet your co-ops needs – not necessarily the cheapest price!

✓ Balancing initial spend, on-going resource requirements and social, environmental and corporate priorities

✓ Reducing administration and delays✓ Improved planning and better risk management✓ Greater efficiency

Principles of public procurement regulations and EC Directive

• Fair• Transparent• Proportionate• Competitive• Consistent

Good practice

A clear application process that gathers key information:•Company details – name, parent, registered address, legal form and registration number•Director details – name, address and other directorships•Financial details – accounts and financial assurance•Types of repairs and fee structure•References•Registration details – VAT, CIS, Gas Safe and NICEIC•Insurance details•Health and safety policy•Safeguarding checks

Overarching principlesThe Co-op should• Ensure equality of treatment amongst bidders• Not provide information in a discriminatory manner

which may give some potential suppliers an advantage over others

• Not reveal to the other participants solutions proposed or any commercially confidential information communicated by a participant in the dialogue without that participant’s agreement

• Recording of information• Co-op should record discussions, decisions and

actions• Share this with suppliers• Internal debrief

Drawing up management agreements

✓ Management agreements are about legal contracts between a client (i.e. the co-op) and the service provider.

✓ Contract law has 6 elements:-

1.Agreement2.Consideration3.Intention4.Capacity5.Genuine Consent6.Legality

✓ Responsibilities should be clear and should cover each parties duties and roles

Monitoring management agreements

▪ Regular review meetings to assess:-

▪ Service delivery – agreed Key Performance Indicators (KPIs) and penalty clauses

▪ Customer satisfaction and complaints▪ Equality and diversity

• Training for Management Committee members in how to manage contracts, performance and negotiations

• Performance is a two sided issue!• Improvement plans• Clear and agreed processes for dealing with breaches of

contract including cancellation

Agency Management

• Is the co-op taking all the major decisions?• Is the co-op having discussions following agency

reports?• Target setting and review processes for services

and Management Agreement• Are members fully aware of their choices?• Tenant involvement• Non-housing activities• Committee support and administration• Encourage to attend events with other co-ops in

the wider co-operative movement• Business Planning?

What do you consider Value For Money in procurement?