Did you know that in 2023, procurement framework agreements in the public sector amounted to £31.6 billion? That’s a significant investment. One that’s well worth pursuing for buyers and suppliers in the public sector.
In essence, public sector framework agreements are a relatively quick and easy way for contracting authorities to award contracts to suitable suppliers. However, while they simplify the procurement process for both suppliers and buyers, there’s still a series of steps that need to be followed to unlock all the benefits.
We’re going to look at how public sector frameworks fit into procurement processes and how buyers can use framework agreements to identify suppliers who deliver the most value at the best price.
What Are Framework Agreements In Procurement?
Procurement frameworks consist of approved suppliers who meet qualifying criteria, so buyers are assured of quality standards when choosing a supplier that meets their needs. Public sector frameworks reduce the time it takes to award contracts by eliminating a lot of admin.
Because suppliers are pre-approved, there’s no need to carry out the entire tender process. All buyers must do is run a mini-competition or call off to find the most suitable supplier.
Sometimes, like when it’s a single-supplier framework, buyers can use the direct award process to select a supplier. There’s no need for mini-competitions or call-off contracts.
Frameworks sound simple, and they are, to a degree. There is some preparation involved. For example, contracting authorities must identify the contract’s needs, define the specs, identify potential suppliers, complete the tendering process, negotiate contracts, and implement ongoing supplier management strategies.
The Complexity of Public Sector Procurement Frameworks
One of the primary factors contributing to the complexity of frameworks is the wide range of legislation to which buyers and suppliers must comply. Legislation and regulations are national and international and include fair competition, anti-corruption, environmental sustainability, social inclusion, etc.
Public sector organisations and suppliers navigating these requirements must completely understand the sector’s laws and regulations. This includes the communication and negotiation required to build and maintain stakeholder relationships, as well as risk, finance, and project management.
Frameworks must comply with requirements set out in the new Procurement Act 2023. That means they must be transparent, selection must be fair, competition encouraged, and overall value prioritised.
In addition to compliance with the new Act, framework contracts must still comply with EU procurement directives, including contract award criteria and resolution processes for supplier complaints. This facilitates procurement transactions across borders, keeping the supplier pool wide open, so buyers have a diverse selection to add to their frameworks.
Getting To Grips With Framework Agreements In The Public Sector
It’s possible to wend your way through framework agreements without over-exerting yourself, but then you miss out on most advantages. Getting to grips with framework agreements takes time and effort, but the rewards are worth it.
There are three types of frameworks.
Closed frameworks
The Act leaves closed frameworks largely unchanged. After a number of suppliers have been approved and admitted to the framework, it is closed and no one else can be added. The contract lifespan is four years for most of the public sector and eight years for the Utilities and Defence & Security sectors.
Single-supplier frameworks
These frameworks are closed frameworks on two levels.
1) Buyers can award contracts to a supplier without any other competition or tendering process.
2) Buyers can award contracts to a supplier after a mini-competition or tendering process.
Contracts are for four two eight years, although they can be extended if the circumstances warrant it.
Open frameworks
Open frameworks allow suppliers to bid on framework contracts at certain set points during the contract. Buyers can limit the number of suppliers on the framework, but there must always be at least two service or product providers.
The advantage for suppliers is that they get a second bite of the cherry, because if they didn’t quite make the cut the first time round, they can have another go at least once during the term of the contract.
An advantage for buyers is that framework agreements contain conditions that allow them to remove suppliers from frameworks should they meet grounds for exclusion.
Understanding procurement processes
It’s essential to fully understand framework procurement processes. This sounds obvious, but requires a deep understanding of the procurement cycle. It’s also a deep understanding of various essential processes, like contract negotiation, risk management, and supplier management.
You must absolutely understand the laws and regulations that govern public sector procurement in the UK, including regulations for anti-corruption, fair competition, environmental sustainability, and social inclusion.
Then you can come up with contract award-winning strategies. This step takes time, so don’t rush it. You must define and refine the criteria, so you know exactly what you’re looking for from suppliers, and suppliers know exactly what they must provide. Early engagement with suppliers is strongly encouraged because collaboration drills down into specifics and refines the terms and conditions of the contract.
This is especially important for complex contracts because buyers may have an idea of what they want, but may not know what’s required to achieve their goals. Working with suppliers can set them straight, enabling them to revise the contract so everyone is happy.
Where Are Public Sector Frameworks?
Buyers can publish framework notices on:
- Crown Commercial Service (CCS): The government’s procurement body helps contracting authorities procure goods and services through several processes, including frameworks.
- Find a Tender: The government’s procurement platform for high-value contracts.
- Contracts Finder: The government’s tender platform for lower-value contracts.
- Private sector: Private companies have a database that advertises contract notices. Delta eSourcing has an eTender portal with a database bigger than the UK and the Republic of Ireland combined.
- NHS Shared Business Services: Manages framework agreements across various categories within the NHS system.
The Role eSourcing Tools Play In Framework Agreements
eSourcing tools, like Delta eSourcing, play a big role in simplifying framework procurement. Manual tasks, like bid analysis, are automated, reducing the risk of error and improving supply chain efficiency.
eSourcing platforms enable real-time collaboration and information sharing. This allows quick, informed decision-making to capitalise on opportunities and mitigate risks. Standardisation helps keep everyone on the same page by providing the same access to the same information.
The time saved enables procurement teams to focus more on strategic tasks and refine their procurement techniques.
eSourcing tools provide a central hub for buyers to manage contracts and suppliers, and for stakeholders to collaborate on solutions. Hubs ensure transparency and encourage competition and innovation. Buyers benefit from greater value, but the knock-on effects are felt in local and national economies.
Many eTendering platforms also provide support services, like analytics for data-driven insights and decisions. Predictive analytics is an important tool that provides critical information, like pricing trends and market research, to create realistic and resilient procurement strategies.
Quick-fire ways in which eSourcing tools improve framework contracts
- Budget management: Track spending for accountability and prevent maverick spending.
- Spend analysis: Tracks trends, reduces costs, and uses analytics to refine procurement strategies.
- Security: Built-in security systems protect sensitive data and prevent illegal activities, like fraud.
- Scalability: Scale up as demand increases.
- Integration: Integrate with existing systems for accuracy and smooth workflows.
eSourcing and compliance
eSourcing tools are set up to ensure frameworks include compliance with internal policies and regulations, as well as national and international legal and operational regulations. Regulations include data security, ethical procurement practices, fair labour practices, and anti-corruption requirements.
Compliance is critical because non-compliance carries severe penalties.
Reputation: Non-compliance, especially a track record of non-compliance, can affect the reputations of suppliers and buyers. They’ll find it difficult to drum up business and could put the company or government body in financial jeopardy.
Financial penalties: Non-compliance can result in significant financial penalties or require payment for any damages caused as a result of non-compliance with things like security and quality standards.
Criminal prosecution: In severe cases of non-compliance, repeated non-compliance, and non-compliance with critical regulations, buyers and suppliers can face criminal prosecution and jail time.
Disqualification: Non-compliance can result in disqualification from the framework concerned, exclusion from all similar contracts, or total debarment. Companies that can prove they’ve corrected the issue that resulted in exclusion can be readmitted.
Key Considerations When Choosing Procurement Frameworks
Procurement frameworks offer numerous benefits to public sector buyers and suppliers, but public sector bodies must choose their frameworks wisely if they’re to leverage these advantages.
Key considerations public sector bodies must bear in mind.
- Does the framework allow customisation so they can set specific criteria to pre-approve suppliers?
- Is the structure set up to provide complete transparency throughout the process?
- Does the procurement framework encourage competition and innovation?
- Does the framework protect buyers and suppliers from non-compliance via a robust legal framework?
- Are there tools that enhance supplier management?
Delta eSourcing And Frameworks
Delta eSourcing’s tender portal adheres to procurement’s core principles of community building, collaboration, transparency, social value, and sustainability.
Analytics provide all the data needed for any public sector organisation to make informed decisions, especially when it comes to supplier performance and selection.
Our excellent support staff can help buyers ensure that social value requirements are built into procurement frameworks and that there are measures to assess the effectiveness of social value initiatives.
Our vast experience in public sector procurement means that we understand the challenges of implementing framework contracts and have the knowledge to help you overcome those challenges to optimise frameworks and reap all the benefits that make your contract a success.
Contact us now to book a free demo or to find out more about our analytics tools and how they can help you optimise procurement frameworks.
