After 18 years and providing over 80,000 homes from the Private Rented Sector for our Service Personnel, HCR will no longer be looking after the Contract for the Defence Infrastructure Organisation (DIO).
HCR won the first ever Substitute Accommodation contract in 1996 as an alternative to Service Personnel seeking out their own rental property and getting it set up. In those early days, there weren’t clear guidelines available on property standards, suitable locations, budgets, service standards and the rest, so HCR developed them working along side the MoD teams and Military Project Managers.
With the deterioration in the MoD’s own Housing Stock standards, the substitute property offered by HCR was always superior in quality and frequently provided a cheaper alternative to the MoD Housing Stock. HCR’s approach was always to provide accommodation that we would be happy ourselves to live in and we never forgot we were spending the tax-payers money. This balance of value for money and quality is an essential part of the culture of HCR and the delivery of the three subsequent contracts, resulting in two ‘Public Procurement awards’ for the trusted partnership between Defence Estates (now DIO) and HCR.
We pioneered our deposit free Tenancy Agreement, savings £ millions for the tax-payer and yet building a trusted relationship with thousands of private Landlords and Letting Agents across the UK with our fair and equitable handling of damages. Many of the landlords rented their homes to HCR year-after-year, safe in the knowledge that we never once defaulted on the payment of a single rent and we prided ourselves for payment on-time. In turn we received ‘lower than average rents’ which we passed on as savings for the tax-payer.
We developed immense loyalty and service knowledge within HCR’s MoD delivery team as the majority of our staff were with us for many years. This provided a counter-point to the frequent changes of DIO Civil Servants who relied on us to deliver a complex Contract without a hitch. Similarly our systems were changed and adapted over the years to match the shifting security requirements, collection of data and immense changes within the rental market.
Given the experience, the systems and the value for money that was being provided to DIO you might wonder why HCR lost the contract.
The pre-programmed re-tender started in 2010 and finally concluded in December 2015. During that 4½ period there were 3 failed attempts to reach a conclusion that had a considerable impact on this relatively small business (we were 105 staff at that stage). The failed processes and changing requirements created a huge amount of uncertainty which negatively impacted on our growth. Part way through the 4½ year re-tendering process, DIO decided to change the contract requirements, again. For 18 years, HCR has facilitated Service Personnel into private rented accommodation by sourcing property that meets the demanding standards, protecting the occupant during their stay by managing maintenance issues and then carefully handing back the property when it was no longer required. The rent payable was “re-charged” back to DIO at the same cost we paid for it.
In the penultimate tender process, DIO changed the contract as they wanted the contractor to take the entire responsibility for the amount of rent paid and to provide a fixed rent ceiling, by geographic location and property size, for the next 3 years. This understandably changed the risk profile, making it far less suitable for a small, medium enterprise (SME) like HCR to compete.
In the final expedited tender process, DIO chose a Public Limited Company (PLC) with £multi-million revenue, and predominantly a social housing maintenance contractor, to provide the contract. With Contractual rent caps to achieve, together with unrealistic Key Performance penalties and even a requirement to place Service Personnel in 3-star accommodation if a property is not provided within 14 days, HCR could not take the same risks as a PLC coming in second and in the final analysis we quoted 10% more than the winner.
We believe this solution is to the detriment of the Service Personnel and the tax-payer. The new contract reduces the choice for Service Personnel as to where they can live and to what standard and in the final analysis is likely to end up costing more than the prior contract. As for HCR; we will be novating over the existing tenancy agreements and TUPE’ing across HCR’s MoD Delivery Team to the new provider over the next couple of months. We will be inevitably leaner and completely focussed on our Employee Relocation services, our Eldercare services and of course we shall be continuing with our comprehensive corporate accommodation services, including our rapidly growing and innovative MYTAS brand of all-inclusive leased accommodation.
Whenever there has been conflict or strife that has involved our Armed Forces, we have always been grateful to them stepping up and putting themselves on the line for us. We have recognised that sacrifice and dedication by supporting military charities, but more importantly always doing our job to the best of our ability so they have the home they deserve. We wish every Service Person every success and happiness, with peace in a place they can call home.
Thank you to our Landlords, Letting Agents, Property Advisers, Furniture and Other Suppliers, our Staff and of course our Guests for their support, kind words and encouragement throughout the years.
Onwards & Upwards
The Directors and Staff of HCR Ltd