There is big difference between tendering for a framework agreement and tendering for a contract. However we understand that as they can both be tendered in the same manner, it can lead to confusion amongst those new to tendering. In this blog we explain the differences to provide a greater understanding of the purpose of framework agreements.
Framework agreements differ to contracts in a number of key areas:
A framework is generally seen as an overarching agreement between buying and supplying parties which outlines the principles under which contracts can be placed. Whereas a contract is a commitment between a buyer and a supplier for the provision of, and payment for, goods and services (or works).
- Therefore, the framework operates as a general ‘umbrella agreement’ that sets out the terms under which individual contracts can be made throughout the period of the framework. A framework does not guarantee any award of business or commit a buyer to making any purchases. It is the contracts placed under the framework that commit buyers and suppliers to one another.
Often frameworks are structured in lots, for the supply of certain goods and services (or works). Frameworks for PPE and Facilities Management (FM) are key examples. FM frameworks can be lotted into individual areas, such as security, cleaning, catering for example. Similarly provision of PPE can be separated into lots, such as clothing, footwear, gloves for example. Separating frameworks into lots allows a framework to be let for a general requirement, whilst enabling specialist companies to bid for each specialist lot. Some frameworks will also assign a lot to a managed service, which encompasses the provision of all of the lots under the framework.
- It is typical for framework agreements to operate with numerous buyers and numerous suppliers. Single suppliers or multiple suppliers may therefore be awarded in each lot of a framework. A single organisation (lead buyer) will tender the framework on behalf of all potential customers, who should be named or referred to within the framework documentation.When tendering a framework agreement in the public sector, OJEU procurement procedures are used.
- Frameworks usually have a duration of 4 years. The lead buyer will choose the most appropriate duration of the framework and how this is to be allocated, for example the four years may be 2+2 years, or 3+1 years. The decision will be informed by market factors in addition to internal requirements and the potential for change in demand over the proposed duration of the framework.
- Contracts placed under a framework can be awarded for any number of years up to the length of the framework (unless there are exceptional reasons why a longer contract is required). The award of contract can overrun the end of the framework if they are placed before it expires.As an example a buyer can award a 4 year contract in year 2 of a four year framework, enabling their contract to overrun the expiry of the framework by 2 years.
Frameworks and mini competition
When suppliers are awarded a place on a framework that has multiple suppliers, it is quite likely that those suppliers will be required to take part in a mini competition process, in order to win a contract under that framework.
It is standard practice for buyers to “mini compete” suppliers in order to decide who they will award their contract to. As long as the buyers honour the headline award criteria of the original framework procurement, the mini competition process can be conducted using shorter timescales than a standard procurement exercise. Mini competition can also focus on the buying organisation’s requirements more closely, such as specific product or service requirement for their defined needs and lead times.With the exception of abiding by the headline award criteria, procurement regulations do not specify how a mini-competition should be run, but the same general principles of fairness and transparency apply.
We hope this clarifies the difference between tendering for a place on a framework agreement as opposed to tender for a contract. Please use the esourcing directory to find organisations tendering for frameworks for your product or service.
We can help answer your other/additional framework queries please get in touch.