Here are the answers to our top 10 frequently asked questions about framework agreements:
1. What is a framework agreement?
A framework agreement is an ‘umbrella agreement’ that sets out the terms under which individual contracts (call-offs) can be made throughout the period of the framework agreement. There are pros and cons in obtaining a place on a public sector framework agreement.
2. Do framework agreements need to be advertised in OJEU?
If the procurement is being paid for out of the public purse and the value of all the potential call-offs is estimated to exceed the EU thresholds then yes, the framework agreement should be advertised in the Official Journal of the European Union (OJEU).
3. Do individual call-offs (contracts) need to be re-advertised if a framework agreement is in place to cover them?
No, individual call-offs do not then need to be re-advertised.
4. What is commonly procured using framework agreements?
Framework agreements are typically used where the authority knows they are likely to have a need for products or services but are unsure of the extent of this. Framework agreements usually cover commonly purchased products or services.
5. Who can use a framework agreement?
Many framework agreements can be utilised by more than one authority. If this is the case, the purchasing authorities need to be identified in the relevant OJEU notice. Examples of frameworks available to a wide range of purchasing authorities are those formed by Crown Commercial Services, ESPO, YPO etc. These are central purchasing bodies who create framework agreements for use across the whole of, or sections of the UK public sector.
6. How can I get onto a framework agreement?
If the framework agreement is advertised in OJEU, you can only be considered for inclusion on the framework agreement if you respond to the OJEU notice by the stated deadline. The procurement process for awarding the framework agreement will then follow all of the usual EU procedures and rules and be awarded according to how well suppliers satisfy the selection criteria.
7. How are call-offs awarded under a framework agreement?
If the framework agreement is awarded to one provider, then the purchasing authority can simply call-off the requirement from the successful supplier as and when it is needed. Where the framework is awarded to several suppliers, there are two ways in which call-offs might be made:
a) Where the terms laid out in the framework agreement are detailed enough for the purchasing authority to be able to identify the best supplier for that particular requirement – in this case, the authority can award the contract without re-opening competition.
b) Where the terms laid out in the framework agreement are not specific enough for the purchasing authority to be able to identify which supplier could offer them best value for money for that particular requirement, a further mini-competition would be held between all the suppliers on the framework agreement who are capable of meeting the need.
8. What are the advantages of framework agreements to both the buyer and supplier?
The main advantage of a purchasing authority of using a framework agreement is that they do not have to go through the full OJEU process every time the requirements arise. Having to go through the tender procedure once rather than several times will obviously reduce tendering costs. It also means that there is less downtime between identifying the need and fulfilling it, which is a considerable benefit. There are further potential savings to the purchasing body because of economies of scale, which may prompt suppliers to offer more competitive prices.
The reduction to tendering costs also applies to suppliers, as going through the tender procedure can be costly and time-consuming for them. Obviously, the main advantage to suppliers of being on a framework agreement is the chance of being awarded valuable business opportunities.
9. What are the disadvantages of framework agreements for the purchasing authority?
A disadvantage of a framework agreement for a purchasing authority is that they are relatively unresponsive to change – there may be new suppliers or new solutions within the market which were not included when the framework agreement was initially set up. Also, most framework agreements do not place any obligation on the purchasers to actually buy anything. Therefore, if the requirement doesn’t fit into the framework agreement or they think they can achieve better value for money not using it, then they can go elsewhere.
10. What are the disadvantages of framework agreements for the supplier?
This, in turn, is a disadvantage for suppliers under the framework agreement; most frameworks do not guarantee that suppliers will get any business from them. Therefore, you may spend a lot of time, effort, and resources getting included on a framework agreement and never get any business as a result. However, you are still in with a chance, whereas suppliers not included on the framework (whether they were unsuccessful or were not aware of it when it was tendered) are likely to find it more difficult to secure business for the requirements covered by the framework agreement.
To conclude, we recommend that suppliers investigate which framework agreements already exist and when they might be up for re-tender. And for those suppliers included on frameworks, don’t take the business for granted – continue to market your products or services to the purchasing authorities!
Remember that we can undertake a framework review specifically for your business. We will identify relevant frameworks with a timeline for pursuing them. This way, you can strategically plan your framework approach. Call us on 01202 237506 if you would like to know more.