When a contract changes hands, value starts to slip

When a contract is awarded, we tend to treat it as the finish line. In practice, it’s the point where the real risk begins. I wrote recently for Social Housing about why contract management, long written off as the boring job, deserves a serious rethink, and I set out five practical steps to strengthen it. Here I want to follow one thread further, because it’s where I see most value quietly slip away. It’s the moment a contract stops being procurement’s job and becomes someone else’s.

The scale of the problem is easy to underestimate. World Commerce & Contracting puts the average value lost to poor contract management at almost 9% of a deal’s worth every year. In a sector as financially stretched as ours, that isn’t a rounding error. It’s the difference between reinvesting in homes and cutting back.

What actually gets lost in the handover

We put enormous effort into the award. The market engagement, the specification, the evaluation, the sign-off. Then the contract is handed over, often to a service manager or an operational team whose day job is repairs, assets or compliance, and a great deal of the thinking that shaped the deal simply doesn’t travel with it.

Much of a contract’s value lives in people’s heads rather than on the page. The trade-offs made during negotiation. The commitments the supplier gave verbally that never quite made it into the specification. The risks that were flagged and parked for later. The rebate that only applies if someone remembers to claim it. None of that is written on the front of the contract, and when ownership moves to a colleague who wasn’t in the room, it tends to evaporate.

What’s left is a document and a supplier, with no one who fully understands what good was supposed to look like. The result is the slow erosion I described in my earlier piece: missed measures, small price rises that go unchallenged, and promised innovations that never appear. But the root cause is often simpler than a failure of process. It’s a failure of ownership. When everyone assumes someone else is holding the supplier to the standard, no one is.

Why the gap is wider than ever

The financial backdrop makes this urgent rather than academic. The Regulator of Social Housing’s most recent Global Accounts showed aggregate interest cover, measured after all repairs spend, falling below 100% for the first time since the 2008 financial crisis. Financial headroom is thin, and value lost after award is value the sector can no longer afford to lose.

At the same time, two pressures are pulling the handover apart at exactly the wrong moment. The first is resource. In parts of South Wales and Northern Ireland, many providers have no dedicated procurement function at all and rely on framework partners for start-to-finish support. In smaller housing associations, particularly in Scotland, procurement often sits with the asset team alongside everything else they carry. So the procurement team and the operational team are frequently the same stretched people, and the handover happens from one overloaded inbox to another.

The second is demand. Awaab’s Law has flooded repairs call centres, with an estimated £129m needed across the sector just to recruit the people to handle the additional enquiries. When a team is firefighting emergency repairs against a 24-hour clock, sitting down to actively manage a supplier relationship falls to the bottom of the list. The contract keeps running. It just stops being managed.

Innovation is the first casualty

The Procurement Act gives social landlords real commercial freedom to design procedures around fresh outcomes, new technologies and better delivery models. That freedom is one of the most genuinely useful things about the new regime. But an innovative contract needs a champion to survive contact with day-to-day delivery.

Once the deal moves to a pressured operational team, the delivery model that helped win the tender needs someone with the time and the authority to hold the supplier to it. Without that, teams understandably default to business as usual, and the innovation that was priced into the award never materialises. The value wasn’t lost at the negotiating table. It was lost in translation afterwards.

The Act moved the risk, not just the paperwork

Here’s the part that makes the handover a compliance issue and not only a commercial one. The Procurement Act 2023 attached a set of duties to the post-award phase: publishing KPI outcomes on higher-value contracts, keeping transparent records of supplier performance, and issuing performance notices when delivery slips. Those duties sit with whoever owns the contract in practice.

If that owner is a service manager who inherited the contract by email and doesn’t know the publication triggers exist, the organisation still carries the risk. Supplier performance is now, in effect, a matter of public record. A contract that underdelivers is no longer a private disappointment to be smoothed over. It’s visible, reportable and open to scrutiny. Handing over a contract without handing over the obligations that come with it is how compliant organisations end up exposed.

Closing the gap

The five areas I set out in my earlier piece cover the operational detail of how to run a contract well. My focus here is narrower: how to make sure a contract survives the moment it changes hands. Three things make the difference.

Treat the handover as a deliverable, not an email. A contract that moves to a new owner needs a proper handover, with a named contract manager, the pricing and rebate terms, the risks that were flagged, the notice and publication requirements, and the commitments the supplier made that aren’t obvious from the contract itself. If the knowledge stays with the person who ran the tender, it leaves when they do.

Give the owner visibility they can actually use. You can’t manage what you can’t see, and no one can hold a supplier to account from a spreadsheet that’s three weeks out of date. A single view of spend and performance data, down to line level, is what lets a busy manager validate invoices against agreed rates, spot off-contract spend as it happens, and challenge a price rise with evidence rather than a hunch. This is exactly what our Quantum platform is built to do, so managing a contract doesn’t depend on chasing information across suppliers and formats.

Build capability around the people who inherit contracts. If contract management is going to land with operational teams, they need more than the responsibility. They need training, a route to procurement and legal expertise when a variation or dispute lands, and someone to call. It’s where my team spends a lot of its time, because the gap is rarely a lack of willingness. It’s a lack of support.

The point of all this

Contract management gaining strategic recognition is welcome, and overdue. But recognition at the top only matters if it changes what happens at the point where a contract actually lives, which is with the person now responsible for making a supplier deliver. Strengthen that handover, and the value you fought for at award has a chance of surviving. Ignore it, and the tender was the easy part.

So it’s worth asking honestly of your own organisation: for the contracts awarded in the last year, could you name who owns each one today, and are you confident they know exactly what they inherited?.

Ready to strengthen your contract management?

PfH helps social housing organisations take control of every stage of the contract lifecycle. Whether you need expert guidance, the right technology, or a compliant route to market, we’ve got you covered.

If you’re not sure where to start, our procurement consultancy team can benchmark your current contract management capability and build a practical improvement plan.

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With 30-plus frameworks and DPS solutions, we give you a fast, compliant route to award in as little as 10 to 15 days, with contract management support built in from day one.

By Guy Stapleford, Head of Consultancy Services, PfH This article builds on my earlier piece for Social Housing, “The boring job: it’s time to re-evaluate procurement contract management”.

About Guy Stapleford

Guy Stapleford is a commercial procurement specialist with nearly 20 years’ experience in the public sector and housing association sectors.

Currently Head of Consultancy Services at Inprova Group, Guy has also held senior roles as Head of Procurement at Paradigm Housing Group and Bracknell Forest Homes, and Senior Category Manager at Brent Council.

His expertise spans procurement strategy development, contract and supplier management, strategic sourcing, and delivering sustainable cost savings across property, development, and housing operations.

With experience managing procurement portfolios worth over £100m and leading large-scale transformation projects, Guy combines commercial acumen with practical implementation skills, helping organisations embed professional procurement functions and drive measurable efficiencies across their supply chains.