Procurement- Public Sector Framework Agreements

Constructing Excellence

On Monday 27th November, the procurement group met to discuss public sector framework agreements in the construction sector. We were lucky to be joined by Steven Brunning, Head of Public Procurement at Anthony Collins, and Alan Heron FCIPS, Director of Procurement at Procurement Hub / Places for People, to discuss current legal position, current policy position, problems unearthed by research and any potential solutions.

What do we mean by framework agreement?


The definition of a framework agreement, as identified in PCR 2015, requires a framework to be set up “between one or more contracting authorities and one or more economic operators”.

Only those contracting authorities identified in the framework agreement can actually use that framework.

A central purchasing body is a type of contracting authority that may set up a framework agreement under Public Contracts Regulations (PCR) 2015.



Central Purchasing Bodies


Essentially, the role of CPBs is to set up framework agreements and other commercial purchasing dynamics.

What are the risks?

  • The role of CPBs in appointing suppliers to frameworks can in some circumstances, depending on the membership and nature of the CPB, create divergent objectives between what CPBs are trying to achieve and what contracting authorities who use frameworks are trying to achieve.
  • Depending on the subject matter of the framework and size of the product/service market, CPBs may be more attentive to inputs from suppliers rather than requests from contracting authorities, in an attempt to create a purchasing mechanism that attracts key suppliers.
  • CPBs may not be incentivised to foster competition and reduce prices between the suppliers on the framework and encourage aggressive sales tactics.
  • Frameworks can become profit-making commercial tools that is difficult to reconcile with the value for money ethos of public sector purchasing.
  • No controls on fees or scope of “ancillary purchasing activities”.
  • PCR 2015 do not place restrictions on the volume of frameworks that can be set up- overlapping frameworks are not prevented.
  • Who bears the practical risks?
      • Reg 37 states that, although it’s a contracting authority who fulfils its obligations under the PCR 2015 where it uses a framework concluded by a CPB, it is also the contracting authority that is responsible for any part of the procedure it conducts itself.
  • No single, centrally controlled list of CPBs available in the UK at the moment.

Private Sector Framework Models

Agency Model

The first one is an agency model, which is where a private sector entity acts as an agent of a contractor.

The model could pose a problem if:

  • the organisation is not a contracting authority or acting on the instructions of a contracting authority as an agent.
  • the terms of any relationship are inconsistent with the public procurement rules.
  • The arrangement was set up as part of an organisation’s general business, with contracting authority participation secured afterwards.

Under PCR 2015, a private sector organisation cannot be party to a framework instead of a contracting authority.

Neutral Vendor Model

The main features of this model:

  • single provider frameworks- a provider network is run to subcontract level where they operate a multi-supplier style arrangement on a subcontract level that is actually a single supplier framework.
  • managed service arrangements
  • broad scope
  • difficult to reconcile with PCR 2015- lack of transparency




Private Sector Frameworks


5 things to question when looking at private sector frameworks…

  1. Contracting authority status– It could be considered misleading that one organisation is named in the framework, yet another is providing the services and managing it. It begs the question, how much control does the contracting authority actually have? We also need to consider whether some of these organisations’ claims to be CPBs and/or agents are valid?
  2. Transparency– greater transparency is needed around contracting authority status, customer fees and supplier fees. Where does the money go?
  3. Nature of fees– high and hidden fees are a concern and, with little transparency around money, its necessary to question how fair these fees are? Care should also be taken with frameworks that charge just to be included.
  4. Integrity– with all of the other concerns raised, we must wonder whether these frameworks actually deliver public good.
  5. Victims– whilst public sector organisations will feel the effects and will be able to do less with their budgets, it is ultimately the customers of those public sector organisations that become the victims as don’t get what they need.

To Sum Up


There are some frameworks out there that are working well, with organisations doing their part to ensure good procurement practices take place. However, as an industry we need to mindful of the challenges in order to seek better ways of doing things. The public sector needs good private sector partners that will honour the privilege of working with the public sector by ensuring their practices are legal, processes are transparent, and fees are proportionate. The Gold Standard has the potential to bridge some of these gaps and develop greater clarity and openness in these arrangements.