Quality versus price: Rebalancing the scales in procurement

In this blog David Mawson, executive director of Kier Specialist Services, discusses how social housing contracts could be procured differently, putting more emphasis on quality.

'With no great certainty on how future government investment will affect the social housing sector, it has become increasing important for Housing Associations and Local Authorities to consider whether price should remain the key denominator in social housing procurement. For too long the scales have been tipped towards price at the expense of quality and we can all understand why. We live in testing economic times when every penny counts.

But when the true cost of procurement is leading to assets deteriorating and as a consequence we face dissatisfied clients and complaints from residents. Plus, the increased possibility of something far, far worse, should price really be the be-all and end-all?

So, does this mean we should go back to basics? Well, yes, it does.

Somewhere along the way, we as an industry have lost sight of what we were trying to achieve - providing affordable homes for those who need them most, which are safe, economical to heat, dry, well-maintained and don't deteriorate in value. To achieve this requires selecting contractors that can deliver the right outcomes. This may mean planned investment throughout the lifecycle of assets, full compliance which is checked through third party audits and reactive maintenance delivered by skilled, trained teams able to deal with the unexpected as well as the routine.

It is one thing to offer housing that ticks all the boxes for a provider, but don't we need to understand the wishes of residents, too? In the NHS, the patient is at the centre of a decision-making process affecting their treatment, so why should it be any different in social housing? Shouldn't residents be more involved in informing decisions about their homes?

All I am saying is that, like other sectors, together we need to find a way to assess whether contractors can deliver on outcomes, to the quality required, because at the moment, going for the cheapest simply isn't working for any of us.

I know from bitter experience how disappointing it can be to put forward a proposal based on quality and good practice, only for it to be turned down on cost.

At Kier we have made significant investment to improve safety, customer satisfaction, training and development across our social housing contracts. It is added value aspects such as these that should be taken into account alongside cost when determining the true value of a contract.

I would like to see consideration given to a two-stage procurement model where there is meaningful dialogue between contractors and clients, where we would actually spend time together getting to know what each would bring to a long-term partnership arrangement. This emphasis on greater collaboration could take the form of soft marketing testing where stakeholders work together to shape a tender specification, or even a stage further where clients would run a 'try before you buy' approach to road test a contractor's solution.

In parallel with this, I would welcome much greater scrutiny on the measures which really matter - the number of reportable incidents, compliance statistics and qualifications gained and maintained - all standard as part of the tender process and on an ongoing basis through KPIs. These meaningful indicators will show how contractors are really performing against the outcomes which matter to clients and residents, and a clearer indication of the quality of services they are actually providing to residents.

It is important that as we move into the future of social housing that we learn from our past and change the mindset across our sector to one that puts greater emphasis on quality and social value and less on the bottom line cost.'