As a supplier, navigating public procurement can be complex, especially when it comes to understanding different contract types. One of the most important is the framework agreement. In this blog post, we’ll break down what a framework agreement is, how it works, and why it’s a valuable opportunity for suppliers in the public sector.
What is a framework agreement?
A framework agreement is a long-term procurement arrangement between a public sector buyer and one or more suppliers. It sets the terms and conditions—such as price, quality, and quantity—under which future contracts, also known as call-offs, can be awarded throughout the duration of the agreement. However, it does not guarantee any specific volume of work. Instead, it establishes a structure for potential orders over a fixed period, typically lasting up to four years.
How does a framework agreement benefit suppliers?
For suppliers, framework agreements offer significant advantages, particularly in the public sector. Here are some of the key benefits:
- Reduced competition: Once you’re part of a framework, you don’t need to compete with external suppliers for every single contract. Only those included in the framework can submit bids for call-offs, which reduces the competition significantly.
- Stable business: While a framework doesn’t guarantee work, being part of one increases your chances of regular orders over the agreement’s duration, offering more predictable business opportunities.
- Streamlined procurement: Framework agreements simplify the bidding process for individual contracts. Since the main terms are pre-agreed, call-off contracts often involve quicker, less complex procedures.
- Strong relationships with public buyers: Being part of a framework allows you to build long-term relationships with public sector buyers, making it easier to secure additional work and strengthen your reputation.
What types of framework agreements are there?
There are generally two types of framework agreements:
- Single-supplier frameworks: These agreements are made with just one supplier, meaning all call-off contracts during the term will be awarded to that supplier. This provides exclusivity but also comes with the responsibility of fulfilling all future orders.
- Multi-supplier frameworks: In this case, the framework includes multiple suppliers, and call-off contracts are awarded based on mini-competitions or direct awards, depending on the specific needs of the buyer at the time.
How do suppliers get on a framework agreement?
To be part of a framework, suppliers must go through a competitive bidding process similar to other public procurements. The key difference is that instead of bidding for a single contract, suppliers are competing for a place on the framework. During this process, public buyers will evaluate:
- Price and cost-efficiency
- Quality of services or products
- Compliance with regulations and specifications
Once the framework is established, suppliers can be called upon for specific contracts without the need for a lengthy procurement process each time.
Staying active: responding to call-offs
Being part of a framework is only the first step—staying active and responsive is crucial to winning business. Once you’re included in a framework agreement, it’s essential to actively engage with any call-off requests issued by the buyer. A call-off is essentially an invitation for you to submit a bid for a specific contract based on the terms set out in the framework.
Here’s why it’s important to remain active:
- Winning contracts: While the framework limits competition to those included, you still need to actively respond to each call-off to win contracts. Failing to respond could mean missing out on valuable opportunities.
- Demonstrating reliability: Regularly responding to call-offs helps you build a reputation for reliability and responsiveness, which strengthens your relationship with the buyer. This can lead to more direct awards or invitations to additional frameworks.
- Managing workload: Call-offs often come with tight deadlines, so staying on top of communications and responding quickly is essential. Being prepared and organised will help you manage these opportunities without disrupting your existing workload.
Common challenges suppliers face with framework agreements
While there are many benefits, suppliers should be aware of some challenges when dealing with framework agreements:
- No guaranteed volume: Even though you’re on the framework, there’s no certainty of receiving work. It depends on the needs of the buyer and the outcome of any mini-competitions.
- Price pressure: In competitive frameworks, suppliers might feel the pressure to offer lower prices during mini-competitions to win call-off contracts.
- Administrative burden: Some frameworks may require suppliers to participate in frequent mini-competitions or provide extensive reports on performance and compliance.
Final thoughts
A framework agreement can be a valuable opportunity for suppliers to secure long-term business with public sector buyers. While it doesn’t guarantee work, being part of a framework reduces competition, streamlines procurement, and provides the chance to form strong partnerships with public buyers. To make the most of it, suppliers must stay active, respond to call-offs, and make the most this opportunity.
If you want to win more tenders with less effort, consider using Tendium’s smart tender monitoring solution. Our platform helps you find good tender opportunities faster, and if you win a framework agreement, can also manage your call-offs alongside your tender monitoring. Book a demo with us today and start winning more tenders.
