Housing Association Guide Part 4 - Appendix 2Procurement Requirements and Guidance (for Housing Associations)
Contents
The New Procurement Strategy launched on 2 October 2008 requires the establishment of a Housing Association Sub-Group to consider what amendments will be needed to the HA Guide as a result of the changes brought about by the new approach to Procurement. Membership of this Sub-Group will include representatives from each of the Procurement Groups and those changes will be consulted and agreed upon in the normal manner.
This Appendix lists – in checklist form - the Department for Social Development’s (DSD’s) procurement requirements for all social housing schemes that receive Housing Association Grant (HAG) or utilise Disposal Proceeds Funds.
1.01Guidance - This Appendix also includes general guidance and definitions of the various development options and procurement options available to Housing Associations in the provision of social housing for rent, as well as DSD’s procurement requirements. The Guidance is in ‘checklist form’ where possible and includes references to other sources of guidance and advice.
The Procurement Objective - Is to ensure that Associations receiving Housing Association Grant (HAG) or utilising Disposal Proceeds Funds operate procurement procedures generally – and especially in relation to the selected procurement route - that are considered to be:
a. Open, accountable and above approach;
b. In accordance with current Government procurement policies and recognised guidelines on good practice;
c. Appropriate, contractually sound, justifiable and fair in the selection and treatment of consultants and contractors.
2.01Meeting the procurement objective - In order to meet the procurement objective, Associations should incorporate, where relevant, the following:
- Essential Items in their procurement procedures.
- Recommended Items should also be considered by Associations and incorporated only where the Association considers it appropriate to do so.
2.02 Further Guidance:
Guidance is provided for Associations on selected Essential and Recommended Items.
3.01The Management Committee’s responsibility:
Essential Items
a. The organisation, management and methods of procurement used by the Association have been authorised by the Management Committee.
b. The Management Committee of the Association monitors and reviews the overall procurement process and the appropriateness and use of any delegated functions.
c. The Association’s procurement policies include the delivery of best value for money.
d. The relative merits of alternative methods of procurement in terms of value and risk are regularly reviewed by the Association.
3.02 Further Guidance:
a. Guidance for Associations on procurement policy is included at Annex A.
4.01Association’s development and procurement options follow either:
Essential Items
a. Selective competitive tendering for a building contract (either Traditional or Design & Build);
b. Negotiated tendering for a building contract (either Traditional or Design & Build);
c. Off-the-Shelf Purchases; or
d. Existing Satisfactory Purchases (ESPs).
4.02Procurement route selected:
a. Appropriate for the type and scope of work undertaken; and
i. Account taken of overall cost and best value for money;
ii. Account taken of prevailing market conditions at the time;
iii. For a negotiated contract, appropriate authority given and documentation retained for the use of negotiation.
4.03Further Guidance:
a. Guidance on development and procurement options available to Associations and selection criteria applicable to various procurement routes is included at Annex B.
5.01Where the EU Procurement Rules apply the Association complies with:
Essential Items
a. For supply contracts, the Public Contracts Regulations 2006.
b. For services contracts, the Public Contracts Regulations 2006.
c. For works contracts the Public Contracts Regulations 2006.
5.02Further Guidance:
a.Guidance for Associations on the EU Procurement Rules is included at Annex C.
6.01Associations with an on-going development programme:
Essential Items
a. Implement ‘Achieving Excellence’ including:
i. Become best practice clients;
ii. Improve efficiency in procurement;
iii. Include partnering in Procurement;
iv. Promote sustainability; and
v. Promote standardisation and whole-life costs.
6.02Further Guidance:
a. Guidance for Associations on ‘Achieving Excellence’ is included at Annex D.
7 Appointment of Consultants7.01The Association ensures that:
Essential Items
a. Consultant appointed in writing where estimated works/costs exceed £10k.
[Note: ‘Consultant’ includes Employer’s Agent in Design and Build Schemes and a surveyor in Off-the-Shelf schemes].
b. Association’s main or lead consultant appointed in writing prior to the Association making an application to the NIHE (DPG) for project approval.
c. Where relevant, consultant appointment complies with:
i. The Public Contracts Regulations 2006 See 5.01(b) above); or
ii. The Consultant Constructionline Register.
d. Consultant(s) relevantly qualified and experienced for the range and scale of expertise required.
e. Consultant has adequate Professional Indemnity Insurance for the commission.
f. Consultant not an unqualified person for the purposes of the Fair Employment and Treatment (Northern Ireland) Order 1998.
g. Health and Safety - as a condition of appointment after 1 October 2007 (subject to confirmation), all ‘works’ consultants to achieve a rating of not less than 2 in all categories of the H&S Executive’s self-assessment of Commitment Duties under the CDM Regulations.
h. Appointment specifies the services to be provided.
i. Consultant provided with a detailed brief on the Association’s requirements.
7.02Recomended Itemm:
a. Consultant has a written Health and Safety policy.
7.03Further Guidance:
a. Guidance on the appointment of consultants is included at Annex E.
8.01The Association ensures that:
Essential Items
a. Procedures for the selection of a contactor accords with appropriate guidance, e.g. JCT Practice Note 6 (Series 2) Main Contract Tendering or equivalent.
b. The contractor has the organisation, capacity and financial standing to undertake the works, and, where relevant, the contractor selection complies with:
i. The Public Works Contracts Regulations (see 5.01(c) above);
ii. The Contractor is Constructionline Registered (works costs over £30k).
iii. The requirements where works costs are less than £30K.
c. Contractors drawn from approved framework; or select list of contractors compiled on an ad hoc basis by advertising for each scheme. (Competitive Tendering with works costs over £30k).
d. Procedures for selecting contractors reviewed regularly by the Association’s management committee (Competitive Tendering only).
e. Selection of contractors is fair and reasonable; allows for rotation and takes past tendering performance into account (Competitive Tendering only).
f. In Design & Build situations the ‘contractor’:
i. Has established skill, integrity, responsibility and proved competence for the work of the character and extent contemplated; and
ii. Is a reputable Design & Build contractor or contractor/developer (but not a developer only and contracting the building element to a third party or parties).
g.As a condition of tendering, all contractors:
i. Confirm they are submitting a bonafide tender;
ii. Are registered for the new Construction Industry Scheme (New-CIS);
iii. Have adequate public and employers liability insurances;
iv. Are registered for VAT purposes or are not required to register;
v. Are not ‘an unqualified person’ for the purposes of the Fair Employment and Treatment (Northern Ireland) Order 1998;
vi. Are Constructionline Registered (if applicable); and
vii. Have acceptable third party accreditation of their health and safety management systems (Buildsafe-NI Initiative).
8.02Recommended Items:
a. Any security firm employed directly by the Association or indirectly through the contractor and providing a ‘security service’ to have a current licence from the Northern Ireland Office.
8.03 Further Guidance:
a. Guidance on Contractor Selection’ is included at Annex F.
9.01The Association ensures that:
Essential Items
a. All works:
i. Commissioned in writing;
ii. Let on a formal contractual basis; and
iii. Appropriate Form of Contract used.
b. Standard Forms of Building Contracts include:
i. The latest published amendments, where relevant;
ii. Amendment for the law of Northern Ireland;
iii. Legal/professional advice on contractual amendments;
iv. The Association clearly identified as party to the contract for the works;
v. Completion in the name of the same contractor who submitted the relevant tender;
vi. Account taken of JCT Practice Note, ‘Deciding on the appropriate JCT Contract’ or equivalent;
vii. Account taken of JCT Insurance and Related Liability Provisions or equivalent;
viii. Contractual Insurance Provisions checked.
c. Package Deals:
i. Include separate contracts for the purchase of the land and for the Design & Build works.
ii. Where a substantial delay is necessary from purchasing the land until the Design & Build contract can be signed, any Development Agreement must give the Association the option of seeking other procurement routes if the contractor’s status changes in the interim.
9.02Further Guidance:
a. Guidance on building contracts is included at Annex G.
10 Pre & Post-Tender Procedures10.01The Association ensures that:
Essential Items
a. Appropriate procedures for the advertising, receipt, opening and scheduling of tenders are operated.
b. A prompt payment policy to contractors is operates and requires contractors to make prompt payment to sub-contractors.
c. Building Warranty or Defects Liability Insurance arranged prior to tender stage.
d. The Association, its consultants and principal contactor comply with the Construction (Design and Management) Regulations.
e. Account is taken of tenants welfare including Health and Safety considerations during any construction works.
10.02Tender Reporting:
a. Relevant consultants required to provide tender reports giving:
i. Professional appraisal advice and recommendations.
ii. Comments on any lack of tender responses.
iii. Comments on genuineness of tendering competition.
iv. Comments on whether value for money achieved.
v. Comments on the recommended tender’s ability to develop the scheme.
vi. Comments on whether all the HA Guide’s essential Design and Procurement Requirements are incorporated, as required as a condition of HAG.
10.03Contract Control:
a. Association represented at site meetings.
b. Association regularly monitors the work in progress (Clerk of Works or equivalent).
c. Association monitors consultants to ensure they carry out their responsibilities.
d. Association undertakes pre hand-over inspection (snagging) and is represented at any hand-over stage.
e. At Final Account stage all settlements and agreements involving additional costs, claims or financial set-off were:
i. Cost-effective;
ii. Professionally endorsed;
iii. Fully documented; and
iv. Duly authorised.
10.04Recommended Item:
a. Collateral Warranties considered in Design & Build Projects.
10.05Further Guidance
a. Guidance on pre and post-tender procedures is included at Annex H.
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