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What Are The Pros & Cons of a Framework Agreement?

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May 15, 2023

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 or new to the field, 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.

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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

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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.

Pros of Frameworks

Pros of DPS

Simplified procurement process: Frameworks provide a streamlined procurement process for suppliers. Once pre-qualified and selected for the Framework, suppliers can participate in subsequent procurement exercises without undergoing repetitive qualification procedures. This simplification saves time and effort, allowing suppliers to focus on submitting competitive bids and delivering quality goods or services.

Ongoing business opportunities: DPS offer continuous business opportunities for suppliers. Unlike Frameworks that have fixed submission deadlines, DPS allows suppliers to submit tenders at any time during the system's duration. This ongoing access to procurement exercises increases the chances of securing contracts and provides a steady stream of business opportunities for suppliers.

Access to a ready market: Suppliers awarded Framework placement can gain access to a ready market of potential buyers. Being part of a Framework increases visibility and the opportunity to secure contracts from multiple organisations within the Framework. This broader market exposure can lead to increased business opportunities and revenue potential for suppliers.

Reduced competition pressure: DPS typically attract a larger pool of suppliers compared to traditional procurement methods. However, unlike a one-time tender where all suppliers compete simultaneously, DPS allow suppliers to submit tenders independently as and when they are ready. This reduces the direct competition pressure from other suppliers, giving each supplier a fair chance to present their offerings.

Reduced marketing costs: Inclusion in a Framework reduces the need for extensive marketing efforts by suppliers. Instead of individually targeting multiple buyers, suppliers can concentrate their marketing resources on the Framework itself. This concentration can lead to overall cost savings and a more efficient use of your

marketing budget.

Flexibility in tender submission: Suppliers participating in DPS have flexibility in tender submission. They can submit tenders for specific requirements as they arise or selectively bid on projects that align with their capabilities and capacity. This flexibility allows suppliers to prioritise their efforts and resources, focusing on the most suitable opportunities, which can enhance efficiency and improve chances of success.

Compliance and contract stability:Framework agreements often establish clear terms and conditions, ensuring compliance and providing contract stability for suppliers. These standardised agreements minimise disputes and ensure fair treatment for all parties involved. Suppliers can operate with confidence, knowing that their rights and obligations are well-defined within the Framework.

Access to real-time market information: DPS platforms often provide real-time market information, including published tenders, updates, and competition statistics. Suppliers can monitor the system to stay informed about new opportunities, track trends, and gain insights into market dynamics. This access to up-to-date information helps suppliers make informed decisions and develop competitive strategies.

Cons of Frameworks

Cons of DPS

Limited supplier pool: Frameworks often have a limited pool of pre-qualified suppliers, which can restrict competition and limit the options available for buyers.

Limited contract durations: DPS contracts tend to have shorter durations, which may not be ideal for suppliers looking for long-term commitments or stability.

Rigidity in contract terms: Framework agreements often come with predefined contract terms and conditions, leaving little room for negotiation or customisation. This lack of flexibility can be disadvantageous for suppliers seeking specific contractual arrangements.

Administrative burden: DPS require suppliers to continuously monitor and respond to tenders as they become available, which can result in a significant administrative burden, especially for smaller suppliers with limited resources.

Longer procurement cycles: Frameworks often involve longer procurement cycles due to the requirement for competitive bidding, evaluation, and selection processes. This can result in delays in securing contracts and potentially hinder business growth.

Uncertain workload: DPS do not guarantee a steady workload for suppliers, as the frequency and volume of tenders can vary. This uncertainty in workload can make it difficult for suppliers to plan resources and operations effectively.

Potential price erosion: Frameworks' focus on achieving cost savings may lead to price erosion, where suppliers are forced to lower their prices to win contracts. This can impact profitability and the ability to deliver high-quality products or services.

Limited relationship building: DPS contracts often involve short-term engagements, limiting the opportunity for suppliers to develop long-term relationships with buyers. This can make it challenging to establish strategic partnerships and achieve consistent business growth.

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.

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