What are framework agreements?
Frameworks are “umbrella agreements” that sets out the terms – particularly relating to price, quality and quantity – under which individual contracts (call-offs) can be awarded throughout the period of the agreement (normally a maximum of 4 years). They are typically used when the buyer(s) identify a need for specific products or services but are unsure of the scope or timeframe.
Do they need to be advertised in the OJEU?
In line with public procurement legislation. if a framework agreement is publicly funded and the estimated total value of all the potential call-offs exceeds the relevant EU procurement threshold then it should be advertised in the Official Journal of the European Union (OJEU).
Who can use them?
Any organisation subject to EU public procurement regulations can publish a framework agreement. Many are published either on behalf of multiple buyers or left open for use by some or all public sector organisations.
How do I secure a place on one?
- Notices announcing framework agreements are published in the same manner as standard invitations to tender
- Suppliers wishing to participate must register interest using the details provided on the notice and will be awarded a place subject to their ability to satisfy selection criteria
- Only those suppliers who respond to the original notice and are selected will be eligible to participate in any call-offs made under the framework
How are call-offs awarded?
If the framework agreement is awarded to only one supplier, the buyer can simply call-off a requirement from them as and when they wish. If the framework is awarded to several suppliers, there are two ways in which call-offs can be conducted:
- If the terms laid out in the framework agreement are detailed enough for the buyer to identify the best supplier for a particular requirement, they can directly award a contract
- If the buyer is unable to identify which supplier could offer them best value for money for a particular requirement, a mini-competition can be held between all the approved suppliers
What are the advantages?
- Possibility of being awarded multiple contracts
- Reduction in administrative burden due to streamlined procedure
- Chance to build lasting working relationships with multiple buyers
- Less downtime between identifying a need and fulfilling it
- Reduction in administrative costs with removal of OJEU process for every requirement
- Potential savings with economies of scale – suppliers may offer more competitive prices
What are the disadvantages?
- No guarantee of business even if you’re selected as an approved supplier
- Suppliers unsuccessful at the selection stage are locked out of any call-offs for the duration of the agreement
- Frameworks are unresponsive to change. There may be new suppliers and/or new solutions within the market that were not included when the agreement was initially set up
- They apply a ‘one size fits all’ approach, which may make it difficult for buyers to satisfy their own procurement objectives
If you found this blog helpful but want to know more, you can join our free webinar on Thursday 30th August 1pm – 2pm which covers Framework Agreements and Dynamic Purchasing Systems. You can also view a recording of the previous session.
Questions? Feel free to leave a comment, call us on 0800 222 9009, or visit www.tendersdirect.co.uk