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Unrest in the Private Contractors Market

There is considerable change happening in the Social Housing market, particularly amongst the private contractors. These changes are mainly due to two major events; the comprehensive spending review and the collapse of Connaught’s and ROK which left many housing clients high and dry in delivering critical frontline housing repair services to tenants.

To some extent this has caused a fundamental re-examination of whether it is more beneficial to in-source or out-source the housing repairs function. The crux of this is a comparison of the relative efficiency and costs of each option and how the risk is managed if contracts are out-sourced to ensure contracts are secure and front line service delivery adequately protected.

With Connaught’s and ROK exiting the market one might of thought this consolidation would generate less competition as there is are less players bidding. However this seems to have had almost the opposite effect because smaller contracts are being let as social landlords are reluctant to put all their eggs in one basket and this has attracted a larger number of smaller companies to bid.

In this highly competitive market private contractors are increasingly looking to IT systems as a differentiator both in the contract bidding phase and during service delivery. During the sales phase contractors are looking for innovative solution which sets their bids apart from the pack and smaller players are at least requiring comprehensive solutions which allow them to bid on a level playing field against the bigger companies. Once the contract is won the emphasis is on efficient service delivery and ensuring the conditions of the contract are being satisfied and managed.

ROCC have seen some contracts being brought back in-house and others being split into smaller lots and let to different contractors or in some circumstance a combination of part in-house and part out-sourced (for example out-source the operatives and in-source the supervisors and contract managers).

The IT system needs to have the following key functions:

• Multi –contract/ multi SOR

• Real-time reporting dashboard

• Customer satisfaction generation & management

• Good, easy integration with multiple client systems

• Electronic invoicing

• Electronic supply chain management

• Mobile working

• Job costing

• Easy Integration with the desktop

• Materials management in real-time

As far as the housing client are concerned they are looking to IT to help them manage the outsourced contract and police the performance of the contractor using traditional KPI’s and also to give an early warning if things are going fundamentally wrong which puts the overall contract at risk. This means providing sophisticated monitoring of job turnaround times, commitment accounting (value of work in progress etc), proactive post inspection regimes and the trading account information.

Posted Friday, May 20th, 2011 by Chris Potter

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