The Coronavirus crisis means that procurement is facing very challenging times. To help buyers across the UK public sector, we will be looking at the use of Framework Agreements and Dynamic Purchasing Systems, as quicker routes to market for buyers during the current Coronavirus crisis, and the key issues to consider in their use.
This blog considers various issues including the benefits and limitations of both processes and how buyers can speed up the procurement timescale, engage faster with suppliers and ensure they achieve the outcomes they seek.
Delta eSourcing offers a way to make procurement simple for public sector buyers. With an end-to-end web-based tool, Delta help buyers manage their active tenders, bids and suppliers all in one solution. In this guide, Delta explores the increasingly popular option of framework agreements and why buyers should consider using frameworks to achieve more efficient and effective procurement.
A framework agreement in procurement is reached between buyers, suppliers and other stakeholders for goods, works and services to cover a pre-agreed, often long-term period (usually up to four years). Suppliers tender not for a specific piece of work but for a place on the framework agreement. Individual requirements are then ‘called off’ in a series of mini competitions. Framework agreements are a particularly popular option for public sector buyers as they provide a healthy platform for continued collaboration, sustainability and investment into the local community.
The first major issue in respect of Framework Agreements is ensuring that you know which agreements you have access to and which are strictly off-limits.
As a rule, you should have been clearly named or identified as a user when the Framework Agreement was established.
The second issue is to understand the type of Framework Agreement you are looking at, as the format of the agreement will determine whether you can use it in a quick and efficient manner, or whether it doesn’t suit the requirement you have.
In the case of single-provider Framework Agreements, their use is quite simple, with call-offs placed according to the terms and conditions laid out in the agreement.
These Framework Agreements can be the quickest to use as there is no competition stage.
In terms of multi-supplier Framework Agreements, there are various ways in which they can be used:
- Direct award without re-opening competition: If the Framework Agreement sets out all the terms governing the provision of the supplies, services or works concerned, then awarding the contract without re-opening competition among the parties to the agreement is possible. In this instance, the choice of provider must be based on the objective criteria laid out in the procurement documentation.
- Mix of direct award and mini-competition: This option is available where the terms of the Framework Agreement state that it may be used, and the agreement sets out all the terms governing the provision of the works, supplies or services concerned.
- Mini-competitions: If the Framework Agreement does not include all the terms governing the provision of the supplies, services or works concerned, the contracting authority must organise a ‘mini-competition’ between the providers which are party to the agreement.
It’s also worth noting that where Framework Agreements are set up by a contracting authority other than your own, you are nonetheless responsible for the parts that you carry out.
This Cabinet Office guidance provides some useful information on Framework Agreements here.
Dynamic Purchasing Systems
Similar to an Electronic Framework Agreement, a Dynamic Purchasing System provides a shortlist of suppliers from which buyers can conduct an e-competition for tenders. Unlike a framework agreement, suppliers can apply to join the DPS at any point during its cycle.
Using a Dynamic Purchasing System (DPS) may not be as quick as using a Framework Agreement – this is the first issue that you need to consider.
Remember that a DPS is a two-stage process, the first of which is the setup stage, whereby all suppliers that meet the selection criteria must be admitted.
You cannot limit the number of suppliers that join your DPS; and unlike Framework Agreements, suppliers can apply at any point to join the DPS.
Contracts can be awarded following the opening up of competition and authorities must invite all suppliers on the DPS (or relevant category) to tender for the contract.
The timescale for the tender exercise must be at least 10 days and, depending on the complexity of the procurement, may need to be longer.
This process cannot be short-circuited; so again, in terms of time, a Framework Agreement may be a quicker route to finding a solution.
It’s also important to bear in mind that single tender action is not permitted in a DPS (unless there is only one supplier listed) and you cannot change the rules for a below-threshold procurement: all the terms remain the same.
In respect of the need for quick turnaround at the present moment, an established DPS is really the best option, as the setting-up and acquisition of supplies, services or works from the outset would take around 30 days – double the time that an Open Procedure would take under the accelerated route.
This Cabinet Office guidance provides some useful information on Dynamic Purchasing Systems here.
We’re here to help
We understand that many buyers have experience of using Framework Agreements and some of using Dynamic Purchasing Systems; however, our procurement experts at Delta and our PASS consultant colleagues stand ready to assist you with in-depth guidance and advice on their use, or indeed with any other procurement-related issues you may have.
If you need further support or information on PASS services, simply visit their website.
If you would like to find out more about Delta’s Dynamic Purchasing System or Tender Manager tools, please contact a member of our team to receive a free demo of our services.