Framework Agreements are essentially contracts (or agreements) that cover similar or related goods or services, but with no specific purchase order. On other words, it’s a general term for an agreement that set out terms and conditions for making specific purchases but without committing to an order.
Why use a Framework Agreement? Essentially individual orders can be placed with one of several approved suppliers quickly and cost effectively. It also permits the buyer more flexibility around the goods and services contracted under the agreement, both in terms of the specifics of the relevant goods and services and also the volumes involved. Some authorities use multi-supplier frameworks, which allows them to select from a number of suppliers in order to meet their requirements. This clearly helps when attempting to obtain the highest quality at the best value.
How many suppliers are there in each agreement? Some have just a single supplier but where the contracting authority enters into a framework with more than one, there must be a minimum of three suppliers. Under the current procurement regulations there is no maximum number of suppliers. The contracting authority is then obliged to approach every appointed supplier to ask for a quote prior to issuing an order.
How long do they last? Typically an agreement is for two years, but commonly they have extensions, which take them up to three or four years.
Other useful info…
- There is no limit to the types of goods / services that can be purchased using this mechanism.
- Where it’s not clear which is the best approved supplier for a particular occasion, a “mini-competition” is held to ensure best value for money.
- Having an agreement does not guarantee that you will receive any orders, but it provides the enabling contractual relationship.
- It puts you in good stead when bidding for other tenders. You can use the framework award as a case study / referee.
- The opportunities are published and awarded in the normal tender process way.
- When bidding for a framework agreement, your tender will have to include a pricing structure, so the awarding body can compare the financial side of the competing tenders. By providing this, both buyer and vendor will have an agreed method for calculating the price of each individual order placed under the agreement.