A framework agreement is an agreement which sets out the terms on which future contracts under the agreement will be based. Framework agreements are used when there is no defined quantity of goods or services to be put out to tender but the buyer has identified a need for a long term relationship during the lifecycle of the contract.
Typically, there are two distinct types of frameworks:
- Single provider framework agreement – where the buyer may place orders or request services as and when required within the agreed scope of works.
- Multi-provider framework where a pre-specified number of applicants are offered a place on the framework providing they have met minimum quality standards. Once on the framework, there are typically two methods for work to be awarded:
- The supplier with the highest score is given the option to accept/reject with the buyer then working down a list of approved suppliers based on their scores.
- Via mini-competition whereby suppliers complete an application for a specific project/volume of work and the most advantageous submission is awarded.
The tendering process is very similar to that of an ITT or SQ, with the buyer usually specifying the number of places and their anticipated volume of work/value of the framework.
What are the benefits of a framework agreement?
Companies may find it easier to negotiate a place on a multi-provider framework as there are more opportunities and acceptance tends be based on either achieving a benchmarked standard (%) or being ranked within a certain number of applicants, e.g., top six. It also means that you are not contracted to accept work, meaning you can accept/reject or apply for mini tenders as and when you wish to develop your pipeline or work.
It is worth noting that framework agreements are often used by more than one authority within an area, or authorities that share a similar requirement within the scope of the agreement. This may be a certain geographical region, or nationally. It is not unusual for local authorities which have a requirement for services to seek out a framework contract which covers their locality.
Framework agreements can provide many benefits to a local authority, such as:
- They are a pre-approved route to market, and a tool to centralise public procurement spend, meaning that the procurement process is much more efficient than releasing a new tender.
- Shared risk amongst buyers as well as an ability to share contract management meaning it is often a more attractive option for local authorities who do not anticipate generating much work.
- They reduce the administrative burden placed on each local authority:
- Less resource is required to use an existing framework agreement against conducting a full procurement procedure each time the authority has a requirement.
- Pre-agreed terms and conditions and due diligence have already been completed as part of the framework acceptance process meaning they do not need to be repeated.
- Even if a mini-tender process is used to allocate service requirements, it still means that a shorter period of time and money will be spent evaluating the tenders submitted, especially if the agreement has multiple lots.
- If the contracting authority looking to utilise a framework cannot ascertain value for money in a particular framework, they have no obligation to use it, and will enter a full procurement procedure if they feel that this would offer better cost savings.
- It also provides added security: if one provider is unable to meet the demand for services then another provider on the framework should be able to meet the authority’s requirements.
Framework agreements can also provide many benefits to suppliers, such as:
- The potential for higher than envisaged quantities of work, that they can choose to accept/decline.
- Joint working between framework providers is often encouraged by the local authority to drive innovation, continual improvement and best practice. Organisations, particularly SMEs, may therefore benefit from this exposure to other providers as a means of learning and refining their business model. This is also true of the further supply chain.
- You do not need to go through a lengthy tendering process every time the opportunity for work arises, meaning you will see a much faster turnaround from expressing interest/applying via mini-tender to award.
- You will become familiar with councils’ preferences/methods of working, with this insight often proving valuable when tendering for works outside the framework.
Things to consider
As you may have already surmised, what local authorities perceive as a benefit, buyers may view negatively. For example, whilst frameworks can be an excellent means of facilitating more equitable access to contracts, particularly for SMEs, there is no obligation for the buyer to actually use the framework. This means that whilst you invest time and money into the tendering process you are not guaranteed any work.
Even via mini-tender competitions or call-offs, where you are required to submit applications for a specific project/service, the buyer does have the option to open it to a competitive tender should they feel the framework is not economically competitive. You must therefore satisfy yourself that applying for a framework agreement is going to be beneficial to your organisation before committing to the application process.
Where to find suitable framework agreements
As a framework agreement consists of two or more providers, it is very likely that the total amount will be classed as ‘high value contracts’ (usually above £118,000) in the UK’s public and utilities sectors, meaning it will be advertised via the government’s procurement portal, Find a Tender, or for lower value contracts through Contracts Finder. Subscriptions to these services and procurement portals is free and can also keep you informed of prior information notices and/or upcoming opportunities and expected release dates so that you can ‘plan in’ submissions. In line with most procurement rules, there will be typically one month given to produce and submitt a high-quality tender application. If you are specifically looking for framework agreements, this can be refined in the searches you make, but you should be checking this site regularly anyway if you are bidding into the public sector or wish to gain a foothold in the sector.
How do you apply?
Once you have found a contract notice for a framework agreement which you would like to pursue, you will find that procurement will follow a similar process as a contract for a single provider. You will have to register your interest through either a portal or via email, and the pre-qualification questionnaire and tender documents will then be made available to you. This will provide further detail around the anticipated volume of work (this is not guaranteed), the number of places on the framework, how work will be awarded and any contractual obligations. Make sure you review these documents in detail to satisfy yourself that:
- You are eligible for the framework
- You can deliver the services
- You have the time and resources to complete a submission, or have access to support to do so
- The framework is worth your while to apply, i.e., are you confident that work will be generated?
From here, you should develop highly tailored responses that respond directly to the quality responses and where possible reflect your experience and ability to meet the buyer’s requirements.
How can Executive Compass help?
If you are looking to maximise your chances of not only securing a place on a framework but securing the best possible position which can increase your chances of being awarded work, please do not hesitate to contact us today. We are expert tender writers who have a wealth of experience in securing places on frameworks across a wide variety of sectors.
If you are looking for advice regarding a particular framework agreement, or are unsure where to start, we would be more than happy to talk to you, and we welcome the opportunity to assist you in securing a framework position for your organisation.