On Tuesday 11th June and Thursday 13th June CHIC, in partnership with EN, held two roundtable consultation events to ensure that our new merchants framework meets current market need.
CHIC and EN will be using the market feedback from both sets of discussions to shape the new framework to ensure that we procure solutions that our members want and need.
Why There is a Need for a New Framework
The merchants and material supply sector has faced disruption from the COVID-19 pandemic and increased UK import costs, leading to raw material price hikes and market volatility. The merchant market has evolved in recent years through mergers and consolidations, reducing the number of merchants but strengthening some specialised solutions.
CHIC’s and EN’s Members have become more conscious of catalogue pricing and the volume of ‘specials’ purchased. Allowing operatives to buy products outside their core catalogue to reduce tenant waiting times has increased ‘specials’ purchases significantly. CHIC has engaged directly with suppliers and manufacturers, offering better supported rates and demonstrating increased savings and efficiencies through quarterly catalogue reviews. Our framework and DPSs provide a comprehensive merchant solution, including multiple merchants, branch networks and managed stores.
CHIC launched a new Merchant Framework in March 2019, an 8-year framework with call-off contracts permissible until 2027 and trading until 2029. The existing framework will continue to be utilised by CHIC and EN members, with quarterly catalogue reviews and regular management reports.
Although the current framework does not expire until 2027, market changes have prompted CHIC, in partnership with EN, to seek feedback to develop a new framework addressing all current and future needs.
Sector Requirements and Service Evolution
At the beginning of the year, through regular market engagement, CHIC’s Head of Merchant Services Giles Newman predicted that in 2024 many main merchants will scale back operations, reducing staff and branches. However, the merchant social housing market will remain robust and integral to future business plans, with a shift from smaller local stores to larger regional ones. Managed stores work well for members with condensed housing stock, but some organisations view them as excessive expenditure. Members are now separating their supply chain between more specialised suppliers.
Reprocurement is now timely, responding to market changes including mergers, acquisitions, macro environmental influences, inflationary pressures, sector disruptors and new ways of working. These elements necessitate a framework that adapts to changes and remains effective.
The sector’s evolving requirements highlight the need for a flexible procurement strategy, balancing spot buying with long term strategic partnerships. Improved operative productivity and material standardisation is essential. Better use of technology and management information (MI) is needed to inform decision making and enhance operational effectiveness. Flexibility in the merchant supply chain is crucial and there’s a strong desire for additional specialist services, such as glazing and waste management, to meet project needs.
Market Consultation
CHIC and EN have therefore started to shape a new merchants framework to be procured later this year and to be fully operational from 2025. We wanted to consult our stakeholders to test whether the lot structure of the framework and the procurement process are reflective of current needs and expectations.
We therefore hosted two roundtable market consultation events:
- Rotherham – Tuesday 11th June
- Milton Keynes – Thursday 13th June
These were attended by a range of consortia stakeholders, including:
- Members
- National merchants
- Regional / Local merchants
- Materials manufacturers
- Distributors or other suppliers
After a summary of the utilisation of the current framework, there was a briefing of forthcoming changes arising from the Procurement Act 2023, which becomes operational in October 2024. Delegates were asked to consider and advise on a range of specific questions.
The context will be a single framework, procured by CHIC for its own members and those of EN, where framework support – the consortia managed services – is a combined service.
The framework Lot structure that we asked stakeholders to review is show below:
| Lot 1 | Plumbing & heating |
| Lot 2 | Electrical |
| Lot 3 | General building (optional plumbing & electrical) |
| Lot 4 | Painting & decorating |
| Lot 5 | Managed Stores (Optional Plumbing and Electrical) |
| Lot 6 | Merchant consortia managed store (multiple suppliers – one store) |
| Lot 7 | Specialist materials (independent/specialist material suppliers)- Glazing- Roofing- Ironmongery- Upvc- Timber- Flooring |
| Lot 8 | Tools – plant & HIRE |
| Lot 9 | Waste management |
| Lot 10 | Click & collect |
| Lot 11 | Retrofit materials- Pv panels- Battery storage- Air source and ground source heat pumps- Insulation- Ventilation- Environmental sensors |
| Lot 12 | Van stock management technology |
| Lot 13 | National / Regional merchant representative organisations |
Market Feedback
Four sets of questions were considered at each of the two events. These are shown below:
- LOT STRUCTURE, SCOPE AND PAYMENT OPTIONS
- MEMBERS NEEDS AND EXPECTATIONS INCLUDING PERFORMANCE AND PRICE MANAGEMENT
- PROCUREMENT PROCESS AND SELECTION CRITERIA INCLUDING SOCIAL VALUE EXPECTATIONS
- MANUFACTURER ENGAGEMENT AND COST TRANSPARENCY
CONCLUSION
Both consultation events were well attended by stakeholders and the feedback was consistent. There is support for the new framework, to be procured as an Open Framework under the new Procurement Act, leaving flexibility to increase framework providers over an eight year term.
There was also strong demand to host a bidder’s briefing session before the formal procurement commences, to ensure that existing and new bidders fully understand the scope and the application process. CHIC and EN will therefore be hosting a briefing(s) in the Autumn of 2024.
Our thanks to all stakeholders who gave their time and expertise to make sure that our new merchants framework will be entirely fit for purpose.
