Procurement can be a hidden business. Every housing organisation does it, but most of us are more interested in the end product than the processes and paperwork that went into buying it. That is set to change thanks to new transparency rules that came into force last month under the Procurement Act 2023. Social landlords in England must now publish a slew of information about their procurement processes, contracts and outcomes, all overseen by Cabinet Office officials.

From increased flexibility and commercial opportunity, to more admin and potential reputational risk, the new regime presents the housing sector with both prizes and pitfalls. “What’s new is the extent of the information that needs to be put into the public domain,” explains Clare Tetlow, procurement lead at framework provider Procure Plus. “It’s a gear shift.”

The act introduces a schedule of more than 20 new procurement notices – some compulsory, some voluntary – for housing providers to publish. These cover the pre-procurement stage, through to tender, contract management and potential termination.

Among the publications is a ‘pipeline notice’, required from organisations expecting to pay more than £100m under relevant contracts in the coming financial year, tender and contract award notices, and ‘performance’ notices for contracts valued at more than £5m. All will be logged on a government-run central digital platform (CDP), which also went live last month and will be searchable by anyone who cares to look.

“There are substantially more notices [than under the previous regime],” says Stuart Brown, senior associate at law firm Trowers & Hamlins. He notes that the reporting requirements are no longer restricted to the “procurement life cycle” – tendering and setting the contract up – but now extend to the “commercial life cycle” – managing the contract throughout its term.

Procurement teams must balance the commercial opportunities with additional form-filling. “The more information we give to the market, the more interest we might have in our tender requirements,” John Wallace, head of procurement at 125,000-home association Clarion, told a Chartered Institute of Housing webinar. “Because of the bureaucratic requirements, it’s important that procurement staff don’t get drawn back into an admin function to process these notices.”

Speaking at the same event, Thirteen Housing Group’s head of procurement Sara Wetherill agreed, adding that overhauling systems, processes and cross-organisation staff training is crucial if increased transparency will ultimately enhance procurement, instead of drag it down.

At the heart of the new transparency regime is the requirement for providers to set and measure suppliers against key performance indicators (KPIs), where a contract is worth more than £5m. Examples might include setting a target number of properties completed per week for refurbishment works, or a certain number of appointments fulfilled for services. As with the notices, KPIs will be logged on the CDP. “There will be a lot more information at large,” says Mr Brown from Trowers. “It shifts the focus onto contract management.”

Performance scrutiny

Providers will need to assess suppliers’ performance against the KPIs annually, rating them on a five-point scale. The government advises contracting authorities to work closely with bidders and suppliers to shape the KPIs, so that they are jointly understood. Landlords should ensure that bidders – particularly smaller organisations that might not be aware of the rule changes – have priced meeting the KPIs into the contract, and allowed for flexibility if costs are too high.

Where KPIs are not met, landlords must detail the failure in a “contract performance notice”. Procurement teams that have not been involved in managing contracts will need to start. “They can’t take the risk of not understanding whether [a supplier’s] performance is dropping,” says Ms Tetlow from Procure Plus.

Policing the new rules is the Cabinet Office’s new Procurement Review Unit (see p58-60). While the unit, alongside the CDP, poses reputational risk to suppliers that fail to perform, landlords should also be aware of the scrutiny. “If I’m a registered provider and I’m not using the system in the way it’s designed to be used, and maybe the residents identify that and other bidders, too… that speaks to the importance of setting the KPIs correctly and making sure they are relevant,” Mr Brown warns.

But it is not all about downsides. “The need to measure our supplier and contract performance will require more engagement with our critical suppliers on a strategic level, and will create more opportunities to create value from our supply chains,” says Emma Briggs, director of procurement and sustainability at Metropolitan Thames Valley Housing.

The Performance Review Unit expects to be in hand-holding mode for a while, a Cabinet Office spokesperson suggests: “The unit will engage with contracting authorities and suppliers to achieve the shared ambition to raise standards in public procurement – and ensure that the changes become adopted practice.”