2.6.2 Why use framework agreement?

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Framework Agreements offer a number of advantages for a contracting authority such as:

The vfm advantages of centralised procurement without the commonly associated level of bureaucracy;
a single tendering exercise over the life of the arrangement;
a reduction in administrative effort and cost for the contracting authority;
the initial tendering process allows contracting authorities to identify competitive suppliers, who should offer more competitive prices on the basis of an expected value of business;
the agreed range for the supply of items or services can be given at short notice by the contracting authority, therefore reducing or avoiding stock holding for goods, and reducing down-time on equipment maintenance and repairs;
A mutually beneficial longer-term working relationship can be established with the supplier.

The benefits to the supplier include: 

a longer term approach to business development planning
a longer term approach to planning, for example in terms of stock levels and continuity of supply
A mutually beneficial longer-term working relationship can be established with the contracting authority.

The following checklist outlines considerations contracting authorities should use when considering using a framework agreement.

Table 2-15: Guidelines on when to use Framework Agreements

Action

Y/N

Are you in a position to specify, in detail, the kinds of purchase you require upfront, over the proposed life of the framework?

 

Does the purchase allow you to establish a competitive pricing mechanism over the life of the framework?

 

Are you in a position to detail the scope and types of goods and/or services that will be called-off?

 

Can you ensure that your obligations on equality and sustainability etc. can be met?

 

 

If a contracting authority decides to use a framework approach then it must be advertised in the OJEU if the estimated value, over the lifetime of the framework, is higher than the EU thresholds. Under the new Directive the OJEU notice must:

Make it clear that a framework agreement is being awarded
Include the contracting authorities (users) entitled to call-off under the terms of the agreement
State the duration of the framework agreement
Include the estimated total value of the goods and/or services for which call-offs are to be placed.

© 2007 Republic of Cyprus, Treasury of the Republic, Public Procurement Directorate
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