An Update on Framework Agreements
Posted by Nelson Poon on April 13, 2016
What is a Framework Agreement?
The Public Contracts Regulations 2015 came into force in February 2015 and defined a Framework Agreement under Regulation 33 as:
“an agreement between one or more contracting authorities and one or more economic operators, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate the quantity envisaged”.
In essence, a framework agreement is an agreement with providers that sets out terms and conditions for specific purchases, known as call-offs, and can be made through the term of the agreement.
The establishment of a Framework Agreement must be advertised publicly via a Contract Notice and all Suppliers will be considered for inclusion on the framework agreement if a response has been made to the initial Contract Notice by the stated deadline. The procurement process for awarding the framework agreement must follow all the usual procedures and rules and be awarded according to how well suppliers satisfy the selection criteria.
All framework agreements that are subject to Regulation 33 must be advertised in OJEU, if the minimum potential value of the call-offs mounts to a value more than the EU threshold in the lifetime of the agreement. When estimating the total value of framework agreements, all potential call-offs during the period of the agreement made by all contracting authorities that can call off from the framework should be considered, not just the intended call-offs from the contracting authority procuring the framework.
What has changed?
Since the last blog that was published on Framework Agreements, some key changes have been made with the enforcement of the 2015 Regulations to make the process simpler and more transparent for businesses and contracting authorities.
These changes include:
- Clarification on rules of identifying parties to the Framework.
- Flexibility on the rules of setting up and calling off multi-supplier Framework Agreements.
- Requirements to publish award notices for call-offs on Contracts Finder.
Identifying Parties to the Framework
The initial Contract Notice establishing the framework agreement must clearly identify the contracting authorities that can use the framework. Essentially, an economic operator from any Member State in the EU can easily identify who the users of the framework may be, which can be done by name or by other means that makes them clearly identifiable. If possible, then a list or a link to a list should be provided.
Call-offs and mini-competitions
Call-off contracts from framework agreements can now be made for longer than four years, and can be extended beyond the expiry date of the framework:
“In particular, it should be allowed to set the length of individual contracts based on a framework agreement taking account of factors such as the time needed for their performance, where maintenance of equipment with an expected useful life of more than four years is included or where extensive training of staff to perform the contract is needed…[and that] there might be exceptional cases in which the length of the framework agreements themselves should be allowed to be longer than four years”
As per Recital 62 of the Public Contracts Directive, which can be read here.
With regard to single provider framework agreements, call-offs are advertised in accordance with the terms and conditions of the framework agreement.
Multi-supplier frameworks can now consist of a minimum of two suppliers. Previously, this was a minimum of three suppliers.
There are three ways of selecting suppliers from a multi-supplier framework agreement. The contracting authority must identify within the initial Contract Notice establishing the framework agreement which of these options they will use. The three options for selecting a supplier from a framework agreement are as follows:
- Direct Award without re-opening competition
Where the framework sets out all terms governing the provision of work, service, or supplies concerned and all objective conditions that are required to make decisions with regard to awarding contracts, the awarding of a contract without re-opening for competition can now be done. This is where the choice of provider must be based on the objective criteria provided in the initial documents.
- Mix of direct award and mini-competitions.
This is a new method and can be used when procurement documents for the framework clearly state that it can be used, and where the framework sets out all terms governing the provision of work, supplies or services. The documents must set out objective criteria which can be used to determine whether specific contracts will be placed using the re-opening of competition or directly on the terms within the framework, and must also be transparent for all users and suppliers.
This is the process of inviting all the successful suppliers who are party to the framework agreement to provide a submission for the individual call-off. These can be used where a framework agreement does not include all terms governing the works, services or supplies concerned. A mini-competition can be carried out using Millstream’s Quick Quote facility on the myTenders advertising portal. This facility allows only the invited parties to respond to the call-off.
Framework Agreements being used by other contracting authorities
It is possible for contracting authorities to set up and advertise a framework agreement on behalf of other authorities. This is often seen where a contracting authority acts as a Central Purchasing Body. If EU rules are applicable, other contracting authorities can use the framework, providing that they have been named in the initial Contract Notice establishing the framework agreement.
There must be a clear list of all authorities entitled to call-off under the terms of the framework agreement in the notice itself or in the documentation.
Awarding a framework
Over EU Threshold framework agreements must be awarded in compliance with the Regulations and what has been specified in the procurement documentation. Again, the OJEU call for competition must specify the procedure that will be used in the original Contract Notice. Awarding the establishment of the framework agreement involves listing all those suppliers party to the framework agreement. There is no obligation to subsequently publish OJEU Award Notices for the call-offs.
How many providers should there be on a Framework?
Framework agreements can now be concluded with a single provider or with several providers, for the same goods, services or works, depending on the market and the procurement strategy carried out. Previously, multiple-supplier frameworks stated that there must be at least three providers. However, this has now been changed and is now permissible to have two providers.
A list of advantages and disadvantages to using framework agreements can be viewed in our previous blog published on the subject. If you are looking to establish a framework agreement or call off from a framework, Millstream’s mytenders Pro service can provide these facilities.