Framework Agreements

These are defined in EC Directives and UK Regulations for Utilities (SI 1996/ 2911) as:
a contract or other arrangement which is not itself a supply or a works contract but which establishes the terms (in particular the terms as to price and, where appropriate, quantity) under which the provider will enter into such contract with a utility in the period during which the framework agreement applies.
The promoter defines a type of work for which he wishes to let a number of contracts. From an open tendering process a shortlist of firms are selected on the basis of some pre-set criteria such as experience, staff proposed, financial resources, etc. The promoter then invites the selected contractors to bid prices for future works of the kind defined. When the promoter requires some of the works defined he can then negotiate terms for it with a contractor on the basis of prices already submitted.
The advantage of framework agreements is that they avoid the need for
open tendering, or repeated prequalification of tenderers under restricted or selective tendering. A criticism, however, of framework agreements is that they can result in long-term tie-ups between a contractor and an employer, thus tending to reduce open competition as mentioned below in Section 1.14. Also, as with any pre-selection of contractors on the basis of experience, etc. first, and then on competitive prices submitted, this could drive prices down unfairly.

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