Framework Agreements “are they working”
garry | May 5th, 2011 | No Comments »Framework Agreements are by their definition a “Term Contract”, normally over four years, which were devised in the most part to circumvent having to OJEU individual projects, but tender a string of projects that may collectively exceed EU thresholds.
Framework Agreements, with best intentions, aimed to create longer term relationships leading to better value through improvements in efficiency of the procurement process across the entire supply chain.
The questions that I suggest needs to be asked of the Contracting Authorities and Suppliers alike
“are they actually achieving the benefits and efficiencies originally thought and has true competition and value simply been lost to unnecessary bureaucracy resulting in little reward for those Clients and Suppliers involved”
I hear mixed messages, not least from Clients themselves. Those at group level who instigate frameworks say they are successful streamlining and regulating the procurement processes making it more transparent, are those on the ground (who operate the frameworks) not necessarily in full agreement. Their views suggest no flexibility, poor performance, and generally a lack willingness to add value (that is code for doing something for nothing). Equally I hear from the supply side that the work flow suggested never seems too materialised, certainly not at anywhere near the levels or regularity as suggested at the bidding stage. In these tight economic times the basis of the competitive bid that won the suppliers a place on the framework, report key objective of best value are being ignored and now we appear to be slipping back to lowest price in the end and how much can be shaved off the next project or service profit line!
The EU has a lot to answer for, I suggest in not recognising what makes business really happen. Business is all about confidence in the people, those who you know and trust to deliver underline value is fundamental. It seems now to be all about employing professional bidding teams to win tenders and less about on-going performance. I see Contracting Authorities who simply go through the motions of renewing frameworks without any real understanding of how to set up new frameworks based on strong business ethics, and with knowledge of what is really required to deliver underling value to all those involved.
There has to be a “Win Win” situation, not the alternative “Win Lose” or “Lose and Win” or simply the creation of work for those that facilitate the framework, who often seems to have no real understanding of the Clients business or how business gets done in the first place. There are a lot of well off lawyers and specialist consultants out there because it.
Frameworks appear to be “a necessary evil”. I heard said “If I see another gateway question asking do you have ENO9001; or Investor in People, Total Quality Manage (TQM) systems, Sustainability Policy ENO14001, etc I will go mad”. The question is how many of the Contracting Authorities themselves have these accreditation to which they place so much importance in, or is it all really just padding to justify the involvement of the facilitators? In my opinion, and this is shared by others, the outcome has been the isolation and reduction in the ability of SME having a fair chance to bid with only now the corporate sized companies able to afford compliance and bid costs, monopolising the market. I believe there has been a reduction in true competitive pricing, limiting success to those few who have all the bells and whistles but sometimes no substance when you need it.
I recently attended a seminar on procurement where a framework was devised for a four project programme, a mini PFI took place and the initial investment in the bid was over a million pounds by the winning bidder, the programme was then reduced to only one project and the value of that project was 1.8 million. The true cost of the project was 2.8 million. Sometimes a simple competitive tender starts to look a lot more cost effective!



