I’m often asked what a framework agreement is, and what does it mean in terms of tendering for a contract. To respond to that question, I’ve tried to summarise the key points below:
A framework agreement is a contract that is used in procurement when there is more than one potential supplier. So for example, if the contract has been broken down into separate Lots of activity (e.g. Boiler installation, solid wall installation, replacement windows), and the overall value of the contract is not guaranteed, then a framework agreement is commonly used. The public sector typically use frameworks for larger value contracts where they want diversity of supply broken down into smaller lots, or where there are some specialist areas of activity that need to be taken into account. It is also a way for the public sector to be able to engage effectively with small and medium sized businesses.
Typically there will be a minimum of 3 suppliers on a framework and the important thing to find out is what the award process will be once you are on the framework. There are 2 options:
1. Call off contract
2. Mini competition
If it is a call off contract, when there is a requirement for work to be carried out, then the bidder who scored the most on the framework is offered the contract, and only if they are unable to fulfil the work in the timescales required does it go to the next highest scoring bidder and so on. If the second stage is a mini competition, then everyone who secured a place on the framework is issued with the specification and invited to bid, usually these are then awarded to lowest price and highest quality, but the % breakdown of the marks should be stated up front.
If a company is on a framework there is no guarantee at all of any work, and many companies forget this and sit back. My advice is always once on the framework, get to know the people in the authority and keep your profile high. It won’t guarantee work, but if you have a higher profile there is a higher chance that you might.
To find out more about framework agreements, or their impact on your company, get in touch.