In the current climate and with cuts to public funding inevitably around the corner, you may be wondering what impact that will have upon your public sector sales strategy. Of course, tender opportunities won’t dry up, but where public sector organisations can use a Framework Agreement or a Dynamic Purchasing System (DPS) to buy goods and services, they will prioritise these vehicles to run their procurements. The knock-on effect of this could be that if you are not on the current agreements, you may be locked out of bidding.
So what are Framework Agreements and how do they work? Here are the answers to our most frequently asked questions:
1. What is a framework agreement?
A framework agreement is an ‘umbrella agreement’ that sets out the terms under which individual contracts (call-offs) can be made throughout the period of the framework agreement. Basically, if you’re on a framework agreement, it should make it a lot easier to supply the public sector with your goods or services.
2. Do framework agreements need to be advertised?
If the procurement is being paid for out of the public purse and the value of all the potential call-offs (contracts) is estimated to exceed the procurement financial thresholds then yes, the framework agreement should be advertised. In nearly all cases they will need to be advertised through Find a Tender.
3. Do individual call-offs (contracts) need to be re-advertised if a framework agreement is in place to cover them?
No, individual call-offs do not then need to be re-advertised. You will be requested to submit a watered down bid or sometimes there is the possibility of buyers directly awarding you a contract.
4. What is commonly procured using framework agreements?
Framework agreements are typically used where the authority knows they are likely to have a need for products or services but are unsure of the extent of this. Framework agreements usually cover commonly purchased products or services and we see many opportunities advertised daily.
5. Who can use a framework agreement?
Many framework agreements can be utilised by more than one public body. If this is the case, the purchasing authorities need to be identified in the relevant Contract Notice. Examples of frameworks available to a wide range of purchasing authorities are those formed by Crown Commercial Services, ESPO, YPO etc. These are central purchasing bodies who create framework agreements for use across the whole of, or sections of the UK public sector.
6. How can I get onto a framework agreement?
If the framework agreement is advertised on Find A Tender, you can only be considered for inclusion on the framework agreement if you respond to the contract notice by the stated deadline. The procurement process for awarding the framework agreement will then follow all of the usual procurement procedures and rules and be awarded according to how well suppliers satisfy the selection and award criteria.
7. How are call-offs awarded under a framework agreement?
If the framework agreement is awarded to one provider, then the purchasing authority can simply call-off the requirement from the successful supplier as and when it is needed. Where the framework is awarded to several suppliers, there are two ways in which call-offs might be made:
a) Where the terms laid out in the framework agreement are detailed enough for the purchasing authority to be able to identify the best supplier for that particular requirement, the authority can award the contract without re-opening competition.
b) Where the terms laid out in the framework agreement are not specific enough for the purchasing authority to be able to identify which supplier could offer them best value for money for that particular requirement, a further mini-competition will be held between all the suppliers on the framework agreement who are capable of meeting the need.
8. What are the advantages of framework agreements to both the buyer and supplier?
The main advantage of a purchasing authority using a framework agreement is that they do not have to go through the full procurement process every time the requirements arise. Having to go through the tender procedure once rather than several times will obviously reduce tendering costs. It also means that there is less downtime between identifying the need and fulfilling it, which is a considerable benefit. There are further potential savings to the purchasing body because of economies of scale, which may prompt suppliers to offer more competitive prices.
The reduction to tendering costs also applies to suppliers, as going through the tender procedure can be costly and time-consuming for them. Obviously, the main advantage to suppliers of being on a framework agreement is the chance of being awarded valuable business opportunities.
To conclude, we recommend that suppliers investigate which framework agreements already exist and when they might be up for re-tender. And for those suppliers included on frameworks, don’t take the business for granted – continue to market your products or services to the purchasing authorities!
Remember that Winning Tenders can undertake a framework review specifically for your business. We will identify relevant frameworks with a timeline for pursuing them. This way, you can strategically plan your framework approach. Call us on 01202 237506 or email email@example.com if you would like to know more or would just like a chat about how supplying the public sector might be a good thing for your business.