Procurement Policy

Introduction

This Procurement Policy sets the outline principles which mhs Homes Group, inclusive of the Registered Provider of Social Housing Heart of Medway (referred to in this Policy as “mhs”), will follow when procuring contracts for the supply of services, the supply of goods and materials and/or the execution of works. mhs Homes Group is defined as a Contracting Authority under the Procurement Act 2023.

Who needs to know

This Policy applies to all our staff and suppliers who work on our behalf. It supports a culture of spending money wisely and ensures that mhs complies with all legal and regulatory requirements governing procurement and related best procurement practice.

Policy statement

mhs is committed to maintaining the highest standards of Procurement activity. The policy aims to ensure that in carrying out a procurement, mhs will have regard to the importance of the following principles:

1. Transparency – all actions and decisions are visible and accountable

2. Proportionality – our approach and requirements are relevant to the need

3. Fairness and equality – everyone has the same opportunity to bid

This policy helps us manage the regulatory requirements related to procurement and provides a framework for purchasing anything for or on behalf of mhs. This policy should be read in conjunction with the Procurement Procedures which support the delivery of this policy.

Purpose

By adopting this policy, mhs will ensure that we:

1. Comply with current and relevant legislation, regulatory standards and contractual obligations

2. Remain consistent with best practice and the strategic aims of mhs

3. Work well on an operational level

4. Have appropriate levels of quality assurance, measures and monitoring

Scope

This policy applies to all mhs employees and suppliers who work on our behalf.

Roles and Responsibilities

All individuals who make purchases and procure goods, services and works for or on behalf of mhs Homes, must comply with this policy.

The mhs Leadership team and Assistant Directors/Executive Directors are responsible for ensuring they and their staff conduct their procurement, purchasing, and commissioning of third parties, in accordance with this Policy.

The Procurement Team are responsible for ensuring overall compliance with regulations, that procurement processes, templates and systems are in place to meet legislative requirements, the approval of new vendors and supplier amendments, supplier compliance with accreditation and insurance requirements, ensuring alignment with the mhs strategic plan and providing advice and training to staff members in relation to Procurement.

Policy Detail

In carrying out a procurement, mhs will have regard to the importance of:

1. Delivering value for money;

2. Sharing information for the purpose of allowing suppliers and others to understand mhs’s procurement policies and decisions;

3. Acting, and being seen to act, with integrity.

As required under the National Procurement Policy Statement, mhs aim to deliver value for money through:

1. Driving economic growth and strengthening supply chains by giving small and medium-sized enterprises (SMEs) a fair chance;

2. Delivering social and economic value that supports the UK Government’s missions including by working in partnership across organisational boundaries where appropriate; and

3. Ensuring the right commercial capability and standards are in place to procure and manage contracts effectively and to collaborate with other contracting authorities to deliver best value

Procurement Route and Award Approvals

Before any procurement of any sort is undertaken, you must have discussed the requirement with the budget holder, to seek outline agreement to proceed and to confirm that a budget for this is in place. You must then seek approval to proceed from the correct authoriser dependent on total contract value. The values for which approval is sought is to include extensions and VAT, and therefore is approval to proceed for the entire aggregate contract value (the maximum permissible spend).

Appendix 1 outlines the approvals required.

Full details and supporting tables are available in the Procurement Procedure.

Specification and cost Model Approval

For medium and high-risk contracts (those that have been defined as Silver or Gold using the Contract Tiering Tool, a matrix based scoring system linked to contract value, complexity, ease of seeking replacement suppliers, impact of supplier failure and information Security Risk), before a tender or quotation exercise is issued, the specification and cost models/pricing methodologies must be reviewed by Procurement (for regulation compliance purposes) and signed off from a technical perspective by the appropriate manager/Assistant Director prior to issue. No tender or quotations are to be issued without these checks having been signed off.

Variation and Extension Approval

If a contract contains agreed extension clauses and these are to be activated, to ensure an audit trail is in place and approval is sought for LT awareness, an Extension Request is to be logged using the PAF system and this will be signed off by the designated Assistant Director.

Any variations to contracts will need to be in line with the Procurement Act regulations and agreed in writing with the Procurement Manager prior to seeking further approvals. This will be done through the Contract Modification Request form. Once Procurement have approved that it is a complaint modification, if the modification is for additional goods/works/services, is more than 10% of the original value or more than 10% of the original term, approval will be required from ET via a Procurement Paper before proceeding.

Public Procurement Thresholds

Mhs, inclusive of HoM, are defined as a Contracting Authority, therefore we are subject to the Procurement Act 2023. Any contract above these thresholds, including certain development contracts, is defined as a Public Contract and the full Procurement Act 2023 applies. Below these thresholds, the Below Threshold element of the act applies. These are subject to change very two years and the policy will be updated to reflect as required.

Goods, Services and Works Definitions

Goods refer to tangible items or products that are purchased to fulfil operational needs or provide public services. These can include office supplies, vehicles, IT hardware, and more.

Services refer to activities or tasks performed by individuals or organizations to meet the needs of mhs. These can include consulting, maintenance and repair services, transportation, IT support, Legal advice, recruitment agencies, and more.

Works are defined by the Procurement act but typically refer to construction-related activities or projects. This includes the building of infrastructure and facilities and associated tasks like demolition, site preparation, and installation of systems or equipment integral to the construction process. A full list of activities defined as works can be found here: The Procurement Regulations 2024

Tendering and Quotation requirements

All purchases must be made in line with this policy. Purchases must only be made upon completion of a quotation/tendering exercise or from existing contracts covering your department and expense codes. Designated corporate contracts can be used across the organisation.

Only suppliers that have been procured correctly and hold a current contract will be available for use on the P2P, Repairs and Asset Management systems. Systems are also not to be seen as “approved suppliers lists” and orders must only be raised for goods, services or works covered under a correctly procured, existing contract and under the applicable expense code.

Appendix 1 outlines the available routes to market based on the Procurement Act 2023.

Full details and supporting tables are available in the Procurement Procedure.

Waivers

In exceptional circumstances, a waiver to this policy for below Procurement Act Threshold requirements only, may be required. Colleagues should engage with their Assistant Directors, to outline the reasons why a waiver is required and to seek outline agreement to request a waiver. Waiver requests must be requested through the Procurement Approval Form process, where Procurement will ensure compliance with the Procurement Act 2023 and final approval will then be sought from the Assistant Director. Waivers will only be approved in certain circumstances, for below threshold tenders these include the below. Note these reasons do not automatically qualify for a waiver and this must be discussed with Procurement and approvers before proceeding:

1. Sole supplier: Instances where only one supplier can deliver the goods/service. This must be evidenced at the point of request. Note that specific brands or systems do not count as sole supplier if other companies produce similar systems (for example asset management systems).

2. Compatibility: Where a change of supplier would result in the contracting authority receiving goods, services or works that are different from, or incompatible with, the existing goods, services or works, and that difference or incompatibility would result in disproportionate technical difficulties in operation or maintenance.

3. Urgent threat to life: Where it is necessary to protect human, animal or plant life or health, or to protect public order or safety.

4. Unforeseen compliance issues: Where, as result of routine or planned inspections, surveys or other maintenance regime, and only where mhs could not reasonably have foreseen the issue, urgent rectification work is required to maintain compliance.

Waiver requests for below threshold procurements, that do not meet the above, will be rejected. Both Leadership Team members and Procurement team members will review and sign off waiver requests and this must happen prior to any commitment to spend money. Repeated waiver requests for the same requirements will be scrutinised and may be rejected. Any retrospective waivers will be denied.

Exceptions and Breach

Any exception to this Policy requires the written acknowledgement of the Executive Directors.

Repeated breaches and knowingly not following the mhs Procurement policy may result in disciplinary action under the Disciplinary Policy.

Stakeholder Engagement

Colleagues across mhs have been involved in the revision of this policy, including the Assistant Director of Finance, Executive Director of Finance, Executive Director of Asset and Development, Assistant Director of Asset Management, Executive Director of Customer and Transformation, Assistant Director of Development and Sales, Assistant Director of Property and Estates Services, Director of Governance and Compliance, the Governance team including Data Protection, and the Health and Safety Manager. No customer engagement has been sought due to the nature of the internal processes involved.

Training

Introduction to Procurement Training should be provided for all relevant staff on induction. Contract Managers and LT members will be given enhanced training provisions based on their roles and responsibilities including but not limited to: In person training, eLearning and external courses, to be refreshed annually.

Assurance and Monitoring

Legal advice received from Trower’s and Hamlin’s and Devonshire’s support the principles within this policy.

The Procurement Manager reviewed existing legislation and regulatory change in addition to policies from other Housing Associations.

Regulatory updates such as Procurement Policy Notes (PPN’s) will be reviewed on issue and revisions to this policy made in line with the change process.

Compliance with this policy will be monitored through reporting drawn from the P2P system (In and out of contract suppliers), Central Digital Platform (Regulation Compliance), PAF Application (Approvals), ET Meeting Minutes (Approvals) and Monday.com (Project management).

All external reporting obligations under the Procurement Act 2023 will be met, in addition to further internal reports, and shared with the mhs Leadership team at set intervals.

The following reporting shall be undertaken and made available to the LT and where required under the Procurement Act 2023, published on the Central Digital Platform:

Additional reporting will be available upon request.

Legal and Regulatory Overview

We are subject to UK public procurement regulations as well as our Leadership Team and Board delegated authorities. Our Procurement Policy and Procedures comply with, as a minimum, the following external regulations:

(a)Public Contracts Regulations 2015 (see 3.4)

(b)Procurement Act 2023 and Procurement Regulations 2024

(c)National Procurement Policy Statement

(d)Landlord & Tenant Act 1985

(e)Commonhold and Leasehold Reform Act 2002

(f)Public Services (Social Value) Act 2012

(g)The Modern Slavery Act 2015

(h)The United Kingdom General Data Protection Regulation (GDPR)

Our Procurement policy and procedures comply with, as a minimum, the following internal Policies and Procedures:

(a)Anti-Fraud, Bribery and Corruption Policy

(b)Anti-Money Laundering Policy

(c)Information Asset Policy

(d)Data Protection Policy

(e)Staff and Board Member Declaration of Interests and Hospitality Policy

(f)Standing Order Procedure

(g)MHS Group Financial Regulations

The Procurement Act 2023 and Procurement Regulations 2024 give clear direction on tendering and contract awards above the Procurement thresholds. The Procurement Team will lead on all new tenders or contract awards exceeding these thresholds. https://www.legislation.gov.uk/ukpga/2023/54/schedule/1/enacted

Both PCR 2015 and Procurement Act 2023 provisions will need to be met in certain circumstances. Where contracts were procured prior to February 2025, and where call offs from Frameworks and Dynamic Purchasing systems set up under the PCR Regulations (prior to 24th February 2025) take place, these must be managed using the PCR 2015 regulations.

Procurements commenced after 24th February 2025, and new Frameworks and Dynamic Markets set up after this date and their associated call offs, fall under the new Procurement Act 2023 and must be managed as such.

Principles

Equality statement

mhs homes has a duty to ensure that no person receives less favourable treatment from the organisation on the grounds of age, disability, gender reassignment, marriage, civil partnership, pregnancy, religion or belief, race, sex or sexual orientation.

​​​​​​​Data protection

mhs homes will only share information that meets the requirements of the Data Protection Act 2018 and the UK GDPR. Confidentiality and impartiality will be exercised by mhs homes at all times.

Feedback

We welcome suggestions and comments from people who use or provide our services. We believe that this can provide some important lessons to help us ensure that the service is improved for everyone.

If you have something to say about this policy or the information that is provided, then please let us know. Please refer any comments to the author of this document.

Links and Appendices

Appendix 1