What is a framework agreement?

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 implementing it going forward to achieve more efficient and effective procurement.

What is a framework agreement?

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.

Framework agreements not only provide a collaborative environment for more cost-effective and consistent high-quality projects, they also allow all parties involved in a framework agreement to develop positive and long-lasting relationships, as we explain in the benefits of framework agreements below.

What are the benefits of using framework agreements?

For many procurement projects, framework agreements have proved to deliver more value for money, greater sustainability and increased benefits for communities than single-supplier contracts. However, framework agreements are not a ‘one size fits all’ solution – not all public sector or private sector requirements are necessarily suited to framework agreements. The scale of the contract and the specification of the goods, works or services required will indicate if a framework agreement is the right option, and it is the responsibility of the contracting authority to decide this. Here we highlight some of the key benefits of framework agreements to find out if framework agreements are the right option for you.

Work collaboratively with organisations of all sizes and skillsets

Framework agreements in procurement encourage participation by private sector companies of all sizes and levels of experience. They provide a great ladder for SMEs to build up their experience in procurement whilst simultaneously working on high-profile projects alongside larger firms. Framework agreements encourage diverse suppliers with a range of skillsets and degrees of experience. They are also a preferred option for public sector buyers and other contracting authorities looking to develop a strategic relationship with the supply chain over a long period of time to strive for continuous improvement. Over time, as the buyer and the suppliers on the framework agreement become more familiar with how the other likes to work, communications will steadily improve and work progress will get better and better.

Save time, resources and unnecessary processes

Framework agreements save contracting authorities from the need to issue repeated tenders for the same goods, works or services. Instead, buyers can simply ‘call off’ again and again from suppliers within the framework agreement. This means no time is wasted re-advertising or re-evaluating the selection and award criteria for contracts, which often entail site visits and proposal meetings over a period of time. Instead, framework agreements save buyers substantial time, unnecessary physical waste and costs of repeat bidding, ensuring procurement is as sustainable as possible.

Achieve procurement that is value for money

Framework agreements allow buyers to spend public sector money wisely. If a contracting authority knows that it will require multiple contracts over a certain period, a framework agreement will reduce administrative tender costs. It can encompass ten projects within one tender exercise, rather than tendering each project separately. Suppliers can offer more competitive rates amongst other competing suppliers and agree to those rates for the entirety of the framework. In short, as a public sector buyer you are planning a longer-term relationship with a third party on an agreed price formula.

What is the key to a successful framework agreement?

To avoid a framework agreement in procurement falling down, you will need to allow for sufficient time to consider and agree what you want to achieve and how to achieve it with suppliers and other stakeholders. After this, you will need to draw up the framework agreement and underlying contracts, the technical specifications and fee matrix, as well as the invitation to tender. Only once this has been agreed should the contract notice be issued and work begun.

Another common problem is that contracting authorities may open framework agreements to a large number of suppliers, for a modest amount of work. This means that larger suppliers will often be awarded the work and leave SMEs and micro-businesses out in the cold. To avoid this happening, ensure that you have considered all the variants that a framework agreement brings. By extensive planning and careful consideration, you should understand whether a framework agreement is the right option for you.

Delta is a government-approved supplier on GCloud11

GCloud11 is a fantastic example of a framework agreement which supports public sector bodies across the UK to achieve better, more efficient services.

The GCloud11 framework agreement was made specifically for public sector bodies in the UK to use as a free service. GCloud11 works as a government-approved list of over 4,000 suppliers offering 30,000 different services across IT, cloud services and network support systems. UK public sector bodies can choose from the list and buy from the suppliers in a pay-as-you-go-service.

As an expert in eProcurement, Delta eSourcing is on the GCloud11 framework agreement as an accredited eSourcing service for effective and efficient procurement management. Delta fulfilled the requirements and conditions of the framework agreement to achieve government pre-approved status. Not only is GCloud11 is a free service for all public sector bodies in the UK, it is an example of how a framework agreement can bridge the gaps in the market for the benefit of everyone. From Delta’s perspective, it also makes it easier than ever for organisations to streamline their procurement processes.

Prepare for more effective procurement today

Delta’s eProcurement tools, such as Tender Management and Dynamic Purchasing System (DPS) allow public sector buyers to quickly procure goods, works and services that are available in the market.

If your organisation is still adapting its eProcurement strategy, Delta will have the solution that will fit the requirements and needs of your organisation. We support public sector organisations to transform the way they procure goods to long-lasting positive effect.

Request your free Delta demo now