What Are The Pros & Cons of a Framework Agreement?

Suitable for businesses of all sizes, Frameworks are invaluable tools for organisations seeking to streamline their purchasing processes and optimise supplier relationships. While Frameworks offer numerous advantages such as enhanced efficiency, standardisation, and cost savings, it is essential to consider the potential drawbacks and challenges they may pose.

In this blog, we will delve into the pros and cons of Frameworks, looking at the benefits they bring and the trade-offs they can cause. Whether you are a seasoned procurement expert, new to the field or a supplier looking to win a place on a framework, understanding the merits and limitations of Frameworks is vital in making well-informed decisions when searching for procurement opportunities.

What are frameworks?

Similar to Dynamic Purchasing Systems (DPS), Frameworks are structured agreements that established terms, conditions, and procedures for procuring goods, services, or works. It provides a framework (hence the name) within which procurement activities can be conducted efficiently and effectively. The purpose of Frameworks are to pre-select a pool of vetted suppliers, to which public sector buyers can award contracts.

Frameworks will typically set out certain rules and expectations which govern the procurement process, and outline the procedures, evaluation criteria, and contract terms that will apply to awarded suppliers.

Where can I find Frameworks?

Whilst first posted on the UK Government websites Find a Tender and Contracts Finder, our advice to all clients and organisations looking to win public sector contracts is to sign up to the free Tender Pipeline database. Tender Pipeline is updated daily with all the opportunities posted on the Government websites collated to make searching for relevant opportunities faster and easier. Whereas keeping on top of Find a Tender and Contracts Finder requires daily monitoring, the completely free-to-use Tender Pipeline allows you to set up a profile within minutes and receive relevant opportunities straight to your email inbox.

Types of Frameworks

Frameworks can take various forms and it is important to know the differences to prevent you spending precious company time and resources on unsuccessful leads. Below is our simple, 7-step introduction to the types of Frameworks used in UK procurement.

1. Single Supplier Framework: This type of Framework involves selecting a single supplier to fulfil a specific scope of work or provide goods and services within a defined period. It offers the advantage of establishing a long-term relationship with a reliable supplier, ensuring consistency and efficiency in procurement activities
2. Multi Supplier Framework: In contrast to a single supplier framework, a multi-supplier Framework involves pre-qualifying or pre-selecting multiple suppliers to provide goods or services. These suppliers are typically evaluated and approved based on their capabilities, expertise, and compliance with certain criteria. Multiple suppliers within the framework can then compete for specific contracts or projects
3. Dynamic Purchasing System (DPS): A DPS is a flexible procurement Framework that allows for the continual submission of tenders from interested suppliers. It is particularly useful when there is a need for ongoing procurement over an extended period. Suppliers can join the system at any time, and competition among suppliers is ongoing as contracts are awarded based on individual tenders
4. Framework Agreement with Call-Off Contracts: This Framework involves establishing a master agreement with pre-negotiated terms and conditions that govern the procurement of goods or services. Once the Framework agreement is in place, specific contracts, known as call-off contracts, can be issued against the framework to procure goods or services as needed. Call-off contracts often have shorter durations and are based on specific requirements and pricing agreed upon in the Framework
5. Collaborative Frameworks: These involve multiple organisations coming together to establish a joint procurement Framework. These Frameworks leverage the collective buying power of the participating organisations to achieve cost savings, standardisation, and improved supplier relationships. Collaborative Frameworks are often used by public sector entities or organisations within the same industry or sector
6. Pre-Qualification Framework: This type of Framework focuses on pre-qualifying suppliers based on specific criteria, such as financial stability, technical capabilities, experience, or compliance with regulatory requirements. Once suppliers are pre-qualified, they may be invited to participate in specific procurement exercises or bid on projects, ensuring a pool of qualified suppliers is readily available
7. Sector-Specific Frameworks: Some industries or sectors have established sector-specific Frameworks to address unique procurement needs and challenges. These Frameworks cater to the specific requirements, regulations, or standards of a particular industry, such as construction, healthcare, or IT services. Examples of these include EEM, SUPC and PfH, to name but a few

Pros and cons of Frameworks versus DPS

A common source of client confusion, we are often asked about the differences between Frameworks and DPS. To help you understand the main differences, we have outlined the main pros and cons of Frameworks versus DPS below.

Are Frameworks right for my Small Medium Enterprise (SME)?

Whilst we cannot provide a certain answer, we can point you in the right direction. By considering the following 7 points, you will be in an excellent position to decide whether a Framework agreement is the right direction for your SME.

First, assess whether you have the capacity and resources to participate in a Framework agreement. Frameworks often require suppliers to handle multiple contracts simultaneously, meet delivery deadlines, and handle potential volume increases. You must evaluate whether your SME can manage the workload effectively without compromising quality or customer satisfaction.

Next, consider the market opportunities available through Frameworks versus your existing procurement routes. To do this, you could research the Framework's scope, the number of buyers involved, and the potential for ongoing business. If the Framework aligns with your offerings and there is a consistent demand for your products or services, participating in frameworks could provide a valuable opportunity for growth and increased market exposure.

A key factor in deciding whether Frameworks are suitable for your SME, you should consider the level of competition within the Framework. Assess the number of suppliers already included and their capabilities. If the Framework has a highly saturated supplier pool or if established suppliers dominate the market, it may be more challenging for your SME to secure contracts and establish a competitive position. However, if the Framework offers a fair and open competition environment, your SME may have a better chance to showcase its unique value proposition. This information should be freely available through Tender Pipeline.

Often overlooked but equally important, it is important to evaluate whether your SME can adapt to the standardised terms and conditions set by the Framework and consider whether your offerings can be tailored to meet the specific requirements of different buyers within the framework. If your SME requires more flexibility to negotiate contracts or prefers customisation, a framework may limit your ability to accommodate unique buyer needs. The terms and conditions will always be set out in the Request for Proposals (RfP) released with the framework opportunity.

To effectively manage the tender process, you must understand the administrative requirements and obligations associated with participating in Frameworks. Evaluate whether your SME has the necessary resources and capabilities to manage the administrative tasks, such as tender submissions, contract management, reporting, and compliance. You should assess the potential impact on your existing operations and determine if your SME can handle the increased administrative workload.

Finally, you should consider your SME's long-term business strategy. Assess whether participation in Frameworks aligns with your growth plans, target markets, and overall objectives. To do this, you should evaluate if the Framework can provide your SME with long-term relationships, strategic partnerships, and opportunities for continuous business expansion. If one Framework doesn’t align, don’t lose hope. Speak to a member of our team to help find relevant Framework opportunities.

Top tips for writing winning Framework bids

Writing winning bids for Framework award since 2009, we know what it takes to make your bids stand out from your competition. Follow these 6 top tips to maximise your chances of success!

1. Thoroughly understand the Framework: Familiarise yourself with the Framework's requirements, objectives, and evaluation criteria. Read the RfP carefully to gain a deep understanding of the buyer's needs and expectations. You should tailor your bid to address these specific requirements and showcase how your products or services align with the Framework's objectives
2. Research the Buyer: Conduct thorough research on the buyer(s) within the Framework. Understand their industry, priorities, and challenges. To maximise your chances of success, you must tailor your bid to demonstrate a clear understanding of their unique needs and how your offerings can address them effectively. This shows the awarding panel that you have done your homework and are genuinely invested in meeting their requirements
3. Highlight your differentiators: Your bid is your opportunity to showcase the best that your company can bring to this opportunity. You must clearly articulate your unique selling points and differentiators in your bid. This can include highlighting what sets you apart from your competitors and why the buyer should choose your company. Ways that you can do this include emphasising your expertise, experience, innovative solutions, quality assurance processes and any other factors that give you a competitive edge
4. Demonstrate your relevant experience: Showcase your relevant experience and successful track record in delivering similar products or services. To do this, you can provide case studies, testimonials, or references that demonstrate your ability to meet the buyer's requirements effectively. This evidence helps build trust and confidence in your capabilities. Public sector procurement uses taxpayer money to fund its services/works. Because of this money being within public interest, the procurement processes values the security and safety of its suppliers. Demonstrating your experience and high-quality work will make the awarding panel more comfortable with your SME which, in turn, will work in your favour
5. Provide a clear value proposition: Public procurement awards contracts to the Most Economically Advantageous Tender (MEAT). To show that you are the MEAT, you must clearly articulate the value and benefits your offerings bring to the buyer. You can explain how your products or services can solve their problems, reduce costs, increase efficiency, improve outcomes, or provide other significant advantages. For maximum effect, you should quantify these benefits whenever possible to demonstrate the value for money your solutions offer
6. Focus on quality and compliance: Given that public sector buyers like to play is safe, throughout your bid you must highlight your commitment to quality, compliance, and adherence to relevant regulations and standards. Demonstrate your robust quality control processes, certifications, compliance records, and any other factors that reassure the buyer of your reliability and ability to meet their expectations. Pay particular attention to any requirement or expectations set out in the RfP as this attention to detail is often rewarded

How Thornton & Lowe can help you win Framework awards

We know that our clients have what it takes to win, and we champion the SMEs that make it happen. With a success rate of 75% and 90% client retention, get in touch and let us be the voice that wins you Framework award today.

Framework Agreements for Public Sector Buyers: Pros and Cons

Framework agreements also have pros and cons for public sector buyers. While in many cases they are recommended as best practice, in others they can be seen as 'too generic' and not able to meet the specific requirements of the buyer.

Pros of framework agreements

• Framework agreements reduce repeated tendering processes, which are costly and time-consuming. By having a long-term relationship with a supplier or a group of suppliers, the buyer avoids the administrative burden and uncertainty of issuing new tenders. This also improves efficiency and quality, as the buyer and the supplier streamline their operations and communication.
• Framework agreements are quite often 'multi supplier'. This creates a more diverse and competitive market, which benefits the buyer by lowering prices, increasing innovation, and ensuring compliance. The buyer can also monitor the suppliers' performance and quality more easily, as they have their data and feedback.
• They offer flexibility and adaptability therefore letting the buyer to adjust the scope, quantity, and specifications of the goods or services according to their needs and priorities. The buyer can also choose from different types of framework agreements and the call-off routes they prefer, such as direct award or with the higher scoring bidder automatically being passed projects, for example.

Cons of framework agreements

• They can limit the buyer's options and opportunities. Framework agreements restrict the buyer's choice of suppliers and lock them into a long-term contract. The buyer may miss better deals or more suitable suppliers that appear in the market after the framework agreement is signed. The buyer may also face legal or contractual challenges if they want to change or add suppliers, or if they have disputes or problems with the existing suppliers.
• Using a pre-existing framework agreement, not developed yourself, will limit access to the suppliers you can engage. If you have a specific challenge due to your location, for example, there may not be enough relevant suppliers you can engage with via the framework agreement. This limits competition and value for money.
• Compared to individual procurement exercises for a specific requirement a framework agreement can seem generic. If you are looking to procure something very important do you want to be limited with how you can purchase and who you can work with?