What are the benefits of a framework over a simple contract?
A framework agreement will generally allow a purchaser more flexibility around the goods or services contracted for under the framework, both in terms of volume and also the detail of the relevant goods and services. A multi-supplier framework allows a contracting authority to select from a number of suppliers for its requirements, helping to ensure that each purchase represents best value.
Can my organisation use a framework that someone else set up?
This depends on whether your organisation, or your "class" of organisation, is listed as being a contracting authority who is permitted to use it. This issue has been made more important since the Remedies Directive came into force at the end of the 2009, bringing with it a new remedy of “ineffectiveness” for contracts entered into directly without competition, when competition was required. If a declaration of ineffectiveness is made, the contract comes to an end prospectively from the date of the declaration. The OGC points out that a contracting authority who uses a framework without being entitled to do so is, in effect, awarding a contract directly and without the proper element of competition and thus is laying itself open to a claim by a challenger for a declaration of ineffectiveness. Please see our blog post here for further details.
What is the minimum and maximum number of suppliers we can appoint to a framework agreement?
It is possible to enter into a framework agreement with a single supplier. However, where the contracting authority enters into a framework with more than one supplier, there must be a minimum of three. There is no maximum number of suppliers in the procurement Regulations, but in practice frameworks with a very large number of suppliers become difficult to manage, as contracting authorities may have to approach each supplier appointed to the framework in relation to a proposed call-off.
We want to enter into a framework agreement that will operate over the next seven years – is this possible?
In general, no. The maximum permitted duration of a framework agreement is four years, other than in exceptional circumstances. Such circumstances would generally be around the level of investment required to participate in the framework (eg, in specialist equipment), meaning that suppliers could only recover that investment over a term longer than four years.
Our framework agreement has only six months left to run – can we call-off a two year specific contract?
Yes, provided that this is a typical call-off and the purpose is not to distort competition. Call-off contracts can continue after the relevant framework agreement has expired. However, guidance suggests that the call-off should not be longer than the total duration of the framework, or of a length which suggests that the framework is being used improperly.
Do we have to provide in the contract documents an exhaustive list of all contracting authorities who will potentially use the framework?
Yes. The contracting authorities should either be listed by name, or by reference to a list of the relevant authorities. It is quite common to refer to a web page containing a list of the relevant bodies. General descriptions of the relevant categories of authorities are not sufficient.
We want to set up a framework agreement but don't see how we can specify all the main terms of individual call-off contracts in advance – is this a problem?
When setting up a framework agreement, the contracting authority should include in the contract documents as many of the terms as possible which will apply to the call-off contracts so that the suppliers are clear as to their risks in relation to the call-off terms. However, if it is not possible to specify the terms which will apply to a call-off, those terms can be established at the time of call-off through use of a mini-competition.
Once we have appointed a supplier to a framework, are we obliged to make sure that the supplier is awarded at least one call-off contract?
No. Suppliers are not usually guaranteed any work under a framework agreement, and it is helpful for a contracting authority to confirm this in the relevant tender documents. However, contracting authorities should ensure that suppliers on a framework are treated equally in relation to evaluation under any mini-competition process.
We are awarding a framework agreement – do we have to observe a standstill period before we enter into the framework agreement with the providers?
Yes. The standstill period applies when you set up a framework agreement. However, there is no mandatory standstill period for a call-off contract under a framework.
Once we enter into the framework agreement, do we need to publish a contract award notice?
Yes. The standard rules on award notices apply to setting up a framework agreement. However, there is no requirement to publish an award notice for a call-off contract under a framework.
We entered into a three year framework last year, with three providers. Since then another provider has entered the market and we would like to add this provider to the framework. Can we do this if we get the consent of the existing three providers?
No, this would be a breach of the legislation. It may be appropriate to consider running a procurement exercise for a new framework arrangement now, and terminating the existing framework arrangement early. However, there would need to be an objective justification for this which did not simply relate to a single supplier.
We want to call-off a contract under the framework by holding a mini-competition. Do we have to use exactly the same award criteria at this stage as we used when we awarded the framework agreement itself?
The legislation states that, following a mini-competition, the call-off contract must be awarded to the supplier that submits the best tender on the basis of the award criteria specified in the contract documents based on the framework agreement. The position in relation to proposed call-off award criteria should therefore be made clear in the contract documents made available to suppliers when the framework agreement was awarded. Subject to that, it is possible to vary the relative priorities of the call-off award criteria from those used at framework award. The proposed call-off criteria and the relevant weightings must be clearly stated in documents sent to suppliers in relation to the mini-competition.
Do we have to send a contract award notice to the OJEU every time we award a call-off contract?
No. There is no requirement to send an award notice to the OJEU for call-off contracts under a framework agreement, or indeed to send award notification letters to the bidders or to hold a standstill period.
However, where the procurement process was commenced on or after 20 December 2009, the new remedy of "ineffectiveness" is potentially available to a challenger if call-offs are awarded without following the rules on mini-competitions as set out in Regulation 19 of the Public Contracts Regulations 2006.
There is however a "safe harbour" for contracting authorities. Provided that a contracting authority believes it has not infringed these rules, the ineffectiveness remedy will not available to a challenger if the contracting authority has voluntarily sent an appropriate form of award notification letter to all the bidders and voluntarily held a valid standstill period.
If a framework agreement is declared ineffective, does that mean the call-off contracts are also ineffective?
No, not necessarily. Call-off contracts entered into before any declaration of ineffectiveness will continue to be valid, unless they are the subject of separate proceedings.
Beyond the Regulations, is there any guidance on how to use frameworks?
The OGC guidance on frameworks can be found here and here. You may also wish to refer to additional guidance from Mills & Reeve.