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Ask the Experts – Framework contracts

Monday April 19th, 2010

By Eddie Regan, Senior PASS Consultant

PASS Consultant Eddie Regan answers your queries regarding framework contracts

Q What is a framework contract?

The term ‘framework contract’ is used to cover agreements not covered by the definition of a contract to which the UK and Scottish Public Contract Regulations apply, but they may contain certain contractual provisions.

Framework contracts will normally detail the terms and conditions for call-offs from the frameworks. However, they will also ensure that contractors on the framework are aware that procurers are under no obligation to purchase anything.

Ultimately, a framework contract is an agreement with contractors, which establishes the terms and conditions governing contracts to be awarded during a given period.

Q Is there any useful literature on framework contracts?

The European Commission has produced an Explanatory Note on Framework Agreements which can be downloaded from: ec.europa.eu/internal_market/publicprocurement/docs/explan-notes/classic-dir-framework_en.pdf

The Office of Government Commerce has also published a revised guidance on framework contracts covering a range of aspects including ‘Setting up a framework agreement’ and ‘Examples of framework agreements’. The guidance, entitled Guidance on Framework Agreements in the new procurement Regulations, can be downloaded from: www.ogc.gov.uk/documents/OGC_Guidance_on_Framework_AgreementsSept_08.pdf

Q What does the EU Procurement Directive say about framework contracts?

EU Directive 2004/18/EC defines a framework contract as “…an agreement between one or more contracting authorities and one or more economic operators, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged”.

It also defines part of the process for setting up a framework contract: “…when a contracting authority enters into a framework agreement in accordance with the provisions of this Directive relating, in particular, to advertising, time limits and conditions for the submission of tenders, it may enter into contracts based on such a framework agreement during its term of validity either by applying the terms set forth in the framework agreement or, if all terms have not been fixed in advance in the framework agreement, by reopening competition between the parties to the framework agreement in relation to those terms.

“The reopening of competition should comply with certain rules the aim of which is to guarantee the required flexibility and to guarantee respect for the general principles, in particular the principle of equal treatment. For the same reasons, the term of the framework agreements should not exceed four years, except in cases duly justified by the contracting authorities.”

Profile

Eddie is BiP Solutions’ Senior Procurement Consultant and frequently assists public sector organisations with clarification and interpretation of EU Directives and a wide variety of legislative issues. He is also Lead Consultant on BiP’s PASS Mark Health Check and provides in-house training on the tendering process – law and practice – to personnel in both the public and private sectors, including several multinational organisations.

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