Public sector Framework Agreements can bring significant commercial benefits for contractors, but firms need to understand the scope, commitment required and the potential disadvantages.
If you are considering making a Framework application, and are unsure whether to proceed, this short guide will provide some background insights.
What is a Framework?
‘Framework’ is simply a general term for an agreement that sets out terms and conditions for making specific purchases of goods and services (call-offs) from suppliers. Terms usually relate to price, quality and quantity.
Frameworks are usually based on large volume buying.
The Framework Agreement may be a ‘contract’, but only if the Agreement places an obligation to purchase. In this case, it is treated like any other contract, and EU procurement rules apply.
However, most Frameworks are not contracts. They just describe the conditions that would apply to any order placed during its life. The lifespan of a framework can be anywhere between 3 – 10 years with 4 years being the most common.
When are Frameworks used?
They are typically used when the buyers identify a need for specific products or services but are unsure of the scope or time-frame.
When a buyer is ready to procure, it will run a ‘call off’ or ‘competition’. Only suppliers on the Framework are invited to pitch.
Frameworks give public sector buyers the flexibility to order goods and services from private sector suppliers multiple times without going through the full tender application process more than once. It saves time and money.
Frameworks can be ‘national’ and include many dozens of suppliers grouped into ‘tiers’. Or they can also be ‘regional’ with just a handful of approved suppliers.
Many Frameworks are published either on behalf of multiple buyers or left ‘open’ for use by any public sector organisation.
Suppliers can only join Framework Agreements when a new Framework is being set up. It is therefore important that suppliers are aware of the contract notice advising that a new Framework is being launched.
If a Framework Agreement is publicly funded and the estimated total value of all the potential call-offs exceeds the relevant procurement thresholds then it should be advertised in the Official Journal of the European Union (OJEU).
Full details of existing Frameworks can be found on the Crown Commercial Service (CCS) website.
Notices announcing framework agreements are published in the same way as standard invitations to tender.
What are the benefits to suppliers?
There are several good reasons to apply for inclusion onto a Framework:
Good introduction to tendering – If your business has nevertendered before, Framework Agreements can be an ideal starting point. The greater volume of available places can result in your success rates being higher.
Beef-up your bid credentials – Once you are supplying a Framework you can use this as evidence or supporting information in future tender bids.
Prestige for your brand – being on a Framework will show the marketplace that your business is taken seriously by public sector organisations. It may help your firm win bids elsewhere.
You can focus on selling – By being an approved supplier on a framework you will have already demonstrated your competence to supply. You can now just focus on ‘selling’ when an opportunity to pitch arises.
Less hassle more opportunity – the long-term recurring nature of Framework call-offs results in a reduction in administrative burden. The process is streamlined. You won’t need to tender each time and you have the possibility of being awarded multiple contracts throughout the lifecycle of the framework.
Build long-term relationships – Frameworks provide the opportunity to establish long lasting working relationships with multiple buyers.
Are there any disadvantages to Frameworks?
Framework Agreements are not perfect. Their ‘one-stop-shop’ formula can make it difficult for buyers to satisfy their procurement goals. The long-term nature of Frameworks mean they are unresponsive to market changes. There may be new suppliers, new technologies and new ideas within the market that were not considered when the agreement was initially set up.
Some businesses, particularly SMEs, are deterred from applying for Frameworks due to the significant work required to successfully apply, with no guarantee of winning any business.
There is also a view held that the high number of other Framework contractors entered on to the roster still results in a high level of competition.
It is also true that suppliers unsuccessful at the selection stage are locked out of any call-offs for the duration of the agreement.
Suppliers still need to effectively ‘winthebusiness’ so making the decision to apply for a Framework position should not be taken lightly.
Further resources and support
You should always evaluate the likely value / quantity of work available before applying to a framework. And be sure to identify the number of other suppliers invited onto the Framework. This will help you in making the bid/no bid decision as to whether it is a worthwhile endeavour.
Use our bid / no bid assessment tool
Read this case study to find out how we helped a business onto a Local Authority Framework.
Contact us on 01462 440077 to discuss how we can help you secure a place onto an upcoming Framework.