A framework is an agreement with suppliers to establish terms governing contracts that may be awarded during the life of the agreement. In other words, it is a general term for agreements that set out terms and conditions for making specific purchases (call-offs).
Note that a framework covers the provision of a generic group of goods, works or services (or a combination), for example:
- Goods – office furniture
- Services – design consultancy
- Works – construction of schools.
You would normally have one ‘framework’ for each generic group, but you may have a ‘framework agreement’ with more than one supplier under each framework.
Framework agreement not normally a contract
The framework agreement itself 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 the EU procurement rules apply.
However a framework agreement is more likely to not be a contract itself, but merely an agreement about the terms and conditions that would apply to any order placed during its life. In this case, a contract is made only when the order is placed and each order is a separate contract. Despite this kind of agreement not technically being a ‘contract’, you still need to follow the EU procurement rules.
Here is an example framework with two agreements. Note that each project called-off under the agreement has its own contract.
These examples are from the Office of Government Commerce paper “Framework agreements and EC developments”:
Supplies from a single supplier
A framework agreement is required for desks by one authority and is awarded, following OJEU and selection, on the “most economically advantageous” basis to a single supplier. The authority calls-off its requirements for desks, during the period of the framework, on the basis of the terms agreed when the framework was set up.
Supplies from several suppliers
A framework agreement is required to cover a number of authorities’ paper needs over four years. Following the OJEU notice and the selection process, based on financial and economic standing and technical capacity, bids are evaluated on the “most economically advantageous” basis for entry into the framework. A number of suppliers are included in the framework to supply a variety of paper types – plain, lined, recycled, coloured, etc. – over the four-year period. The authority goes to the supplier within the framework whose offer is the “most economically advantageous”, based on the original award criteria, for each call-off required throughout the four years. As the terms do not need to be refined or supplemented in this case, the authority has no need to use the mini-competition option.
A framework agreement is required for a range of consultancy services. An OJEU notice is issued and candidates for the framework are selected on the basis of financial and economic standing and technical capacity – including track record and ability. Bids are then evaluated on the “most economically advantageous” basis, including quality systems and fee rates. A number of companies are included in the framework, covering the range of consultancy services required. Hourly rates for different grades of staff form part of the agreed terms. When there is a need to call-off specific services, within the framework, the contracting authority holds a mini competition with all providers capable of meeting that need for the category of services required in order to establish which company provides the “most economically advantageous” (value for money) offer for the particular mix of grades/rates required.
A framework is awarded to several contractors on a UK-wide basis, following OJEU, selection and award on the “most economically advantageous” basis. The contractors provide a range of services within categories, such as building, plumbing and electrical services. Hourly rates, call-out charges and levels of quality are set under the framework agreement. When a call-off is required, the authority goes to the contractor providing the “most economically advantageous” offer, on the basis of the original award criteria, for the particular need. There is no need for a mini-competition in this case, as the terms do not need to be refined. An alternative approach might be to award a framework to a single contractor for each region.
Major works 1
A framework is needed for units to be constructed as part of a major works programme. Following an OJEU notice and a selection process, based on financial and economic standing and technical capacity, a framework is awarded to a small number of prime contractors for units to be constructed as necessary throughout the period of the agreement. The kinds of units in question might include prison cells, categories of hospital beds (e.g. acute, accident and emergency etc) garages etc, where there is a standard size, design or requirement. The awards are made on the basis of the particular mix of quality/unitary prices to meet the need. At the call-off stage, a mini-competition is held and bids are invited from all contractors capable of meeting the requirement for the specific units, with the call-off awarded to the contractor providing the “most economically advantageous” bid for the units required.
Major works 2
A framework is required for the construction of standard building units or office space in various locations over a four-year period. Following OJEU and the selection process, based on financial and economic standing and technical capacity, a framework is awarded to a number of prime contractors on “the most economically advantageous tender” basis. Each of the prime contractors has the skills and supply chains necessary to undertake the different aspects of the construction work during the period of the framework. A decision is made, at each call-off, as to whether a mini-competition is needed – based on whether the terms need to be refined. If a mini-competition is necessary, bids are invited from all prime contractors capable of meeting the particular need. Call-offs under the framework, which may be awarded any time up to the end of the agreement itself, can continue beyond the period of the agreement until the work is completed.