Procurement Contract Regulation Implementation: Understanding the Risks and Opportunities

We attended the talk Procurement Contract Regulation Implementation at the Housing Finance Conference. The talk focused on the Procurement Reformation Bill, which was published in May 22 and will go live in 2024 replacing PCR 2015. 

Procurement Contract Regulation (PCR) is the process by which Housing Associations (HAs) purchase goods and services. HAs are subject to government regulation, and the implementation of the Procurement Reformation Bill, which will replace the current PCR 2015, is set to bring significant changes to the way procurement is conducted. This blog article will discuss the risks and opportunities associated with these changes.

Risks Associated with the Changes
One of the significant risks associated with the implementation of the Procurement Reformation Bill is the increased scrutiny of lower-value contracts. The bill mandates key performance indicators (KPIs) for above-threshold contracts, which is currently set at £5m. This change means that HAs will need to be more transparent about their procurement processes and contract performance. Additionally, organisations will be expected to publish the performance of their supply chain, and there will be additional requirements to publish procurement pipelines in advance. HAs may also be asked to make available redacted contracts and bid submissions to support other organisations.
However, the most significant risk is not educating oneself on the changes and not mitigating risks proactively. To take advantage of the opportunities that come with the changes, it is essential to prepare for the risks.

Opportunities Presented by the Changes
The implementation of the Procurement Reformation Bill also presents several opportunities for HAs. The introduction of a competitive, flexible process will allow for more specific and tailored solutions, which could open up many opportunities. The process will drive better outcomes and solutions, rather than a steadfast approach of 'the lowest price wins.' Additionally, flexibility will allow for increased negotiation and innovation, which could lead to better outcomes.
Another positive outcome of the changes is the potential to raise the procurement profile within organisations. HAs will have more control over their procurement processes, including pre-market engagement and negotiation stages that were previously not possible.

Preparing for the Changes
To take advantage of these opportunities, senior leaders need to ensure that their procurement teams have the knowledge, capability, and capacity for the changes. The implementation of the Procurement Reformation Bill will require staff with excellent commercial skills, and organisations need to ensure that their teams are adequately equipped. 

Conclusion
The implementation of the Procurement Reformation Bill presents both risks and opportunities for HAs. It is crucial to prepare for the changes to ensure that the opportunities presented can be maximised. By educating oneself and one's team and being proactive in mitigating risks, HAs can take advantage of the flexibility and innovation offered by the new procurement process.

To discuss how to prepare your team for these changes please reach out to Marie at modriscoll@bostonhale.com / 020 3762 2497. 

If you are the procurement lead for your organisation and you aren’t already in touch with the Housing Association representative for the Cabinet Office please also reach out to Marie. The representative will be helping to ensure everyone is trained on the changes, launching knowledge drops via e-learning.