Once the framework is in place, work is called off to suppliers in direct selection or there may be an additional mini-competition stage to allocate the work.
Framework agreements come in a variety of shapes and sizes, from national frameworks with hundreds of suppliers in tiers, to smaller regional frameworks with a few approved companies. They can be in place for a number of years.
The benefits of framework agreements
Benefits exist not only for the supplier, but also for the contracting authority, with a pre-approved route to market in place which means there is no need to repeat the procurement exercise time and time again for similar contracts. This creates a significant reduction in administration for the contracting authority and bidder. Even if there is a mini-competition stage involved, it is far less onerous that a lengthy PQQ and tender process for each individual contract.
There is the potential for larger volumes of work to be secured through one bid, with reduced risk as a company is not bidding for one individual contract. Obviously this is not guaranteed, but with a high quality bid it is possible to gain a place high up on a framework and secure more work.
For a lot of frameworks, there is also the opportunity for SMEs to work together for a contract. This allows smaller companies to compete successfully with larger players in the market, encouraging fairness and encouraging SMEs to bid for larger contracts – a main procurement directive at the moment.
Disadvantages
There are a few disadvantages to be aware of when bidding to become an approved supplier for a framework agreement. As mentioned, it is common for there to be no guarantee of any work. This can be a risk when you have spent time and money on a bid; however, provided that you have carried out a bid/no bid decision, the contract could reap more benefits in the long run and it is a risk worth taking.
A framework agreement is typically closed to new providers once it has been established, which can be as long as 5-10 years. It is vital to be aware of the contract notice and subsequent deadline dates to make sure you do not miss out on an opportunity in your geographical area or sector of work, especially if the opportunity is not likely to arise again for another 10 years!
There is a high level of competition with framework agreements. This may seem contradictory as a number of suppliers can be invited onto the framework, but as there are even more bidders to compete with, it is crucial to stand out and come up with new ways to add value to make sure your bid scores highly. If there is a tier system in place on the framework, competition will be even greater as companies bid to be awarded a place on the top tier, and so be either guaranteed a level of work, or be first in line for the work called off.
How to get ahead
It is possible to benefit greatly from public sector framework agreements. Make sure you research the likely amount of work available and the number of suppliers to be invited onto the framework, which can assist in making the bid/no bid decision as to whether it is a worthwhile exercise.
Getting ahead of your competition is vital; if you are an SME look for similar companies or existing contacts which you could partner up with in order to widen your scope of services and your ability to deliver the work. If this isn’t an option, it is all about getting across added value to the evaluator. With high levels of competition, the contracting authority needs to be assured of why you are the best bidder for the contract, and why you should be ranked higher if there are tiers in the framework. This can be achieved through new innovations, evidence-based responses and key differentiators for your business.
For assistance when bidding for a framework agreement, contact us today to discuss how we can help you obtain that all important place. Email info@executivecompass.co.uk or call free 0800 612 5563.
