Improved streamlining of the procurement processes, wider benchmarking & standardisation, lifecycle costings rather than cheapest wins, increased tenant engagement, industry collaboration and review of legislation.
A Report has been launched today at EMEX which summaries the key findings of a comprehensive Review that has been carried out with key stakeholders into the Procurement of boilers and their installation, service and maintenance in Social Housing.
The Review was organised by the Association of Gas Safety Managers (AGSM) with a meeting held in July 2014 at the House of Lords under the Chairmanship of Lord Redesdale, CEO of the Energy Managers Association. Stakeholders who attended the Review included Housing Organisations (primarily gas and asset managers and directors) Procurement Frameworks, Boiler Manufacturers, Contractors, Merchants, Members of the AGSM and CORGI Technical Services.
Each year, many thousands of organisations in Social Housing across the UK spend millions of pounds going through the Procurement process for the installation, service and maintenance of boilers. Most have fairly standard requirements to supply heat in the most efficient, cost effective, sustainable manner.
But the Review found that many of the current processes are:-
– bureaucratic (largely due to current EU Regulations), expensive, a waste of public money, no longer fit for purpose, unsustainable, lacking in innovation and collaboration leading to fragmented economies. They are leading to an increase in the supply chain costs and are showing a lack of industry knowledge and Gas Manager input.
The key recommendations for Stage II of the Review concluded that there need to be:
- Benchmarking and standardisation need to more widely used and brought up to date
- Streamlined procurement processes – it is time to cut the red tape and think out of the box!
- Review of legislation to enable the sector to cut waste and drive long term efficiencies
- Changes to current legislation for Landlords to carry out annual gas safety checks
- Tenant engagement and accountability in line with the Right to Manage philosophy
- Lifecycle costings initiatives for boilers moving from the race to-the-bottom on price, to addressing the lifetime costs and value for money
- Built in energy efficiency providing affordable warmth as a standard requirement
- Industry collaboration with an integrated approach at all levels and stages of the supply chain including contractor training accreditation
- Greater reliability of modern boilers and a review of parts and labour warranties
Claire Heyes, CEO of the AGSM said: “The Report being published today highlights that there are some serious issues in the way boiler procurement is currently being carried out. All stakeholders in the supply chain have highlighted issues and the public money being wasted on the processes is shocking. Money is being wasted by housing organisations and suppliers spending thousands of man hours in the development, submission and assessment of lengthy pre-qualification questionnaires and invitations to tender. Procurement Frameworks don’t always encourage the best value for money over the lifetime of a boiler. None of this benefits the tenant at a time of welfare reforms and rising fuel prices.”
“With millions of tenants living in fuel poverty, energy efficiency and sustainability need to become a standard requirement. There is a need for a wide level of industry collaboration.”
“We have identified the issues and can see some paths forward in the process to make changes. But it’s clear that this is a very complex issue involving many stakeholders. The launch of the Report into the Boiler Procurement Review is the first stage in the process of change. We have the engagement and support of all areas of the sector and will welcome input from all interested parties as we move into the second stage of the process.”
Lord Redesdale, CEO of the Energy Managers Association, chaired the July meeting of stakeholders at the House of Lords. He commented: “The first stage of the Review into the Procurement process shows that there could potentially be billions of pounds of public money being wasted. The launch of today’s Report is a key step in drawing attention to the issues, the bureaucracy and the waste of public money. We would welcome the participation of all stakeholders in the discussions about how we can implement the recommendations in the Report.”