Frachtbox team

What Is A Framework Agreement?

Published 15 Sep 2021

What Is A Framework Agreement?

What Is A Framework Agreement?

Frameworks are “umbrella agreements” between one or more contracting authorities and one or more economic operators, that sets out the terms – particularly relating to price, quality and quantity – under which individual contracts 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 time-frame.

In the context of negotiations, a framework agreement is an agreement between two parties that recognizes that the parties have not come to a final agreement on all matters relevant to the relationship between them, but have come to agreement on enough matters to move forward with the relationship, with further details to be agreed to in the future.

Framework agreements continue to play a central role in public procurement including enabling councils to work together through central purchasing bodies.

What Are The Framework Agreement Features?

The PCR 2015 have clarified the rules on framework agreements in the following ways:

Who Can Publish Framework Agreements?

Any organisation subject to 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 You Secure A Place On An Framework Agreement?

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?

For Suppliers

·         Possibility of being awarded multiple contracts

·         Reduction in administrative burden due to streamlined procedure

·         Chance to build lasting working relationships with multiple buyers

For Buyers

·         Less downtime between identifying a need and fulfilling it

·         Reduction in administrative costs associated with publishing multiple notices

·         Potential savings with economies of scale – suppliers may offer more competitive prices

What Are The Disadvantages?

For Suppliers

·         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

For Buyers

·         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