How to use framework Terms and Conditions
Date: 13th Jul 2022 By: Ekkehard Kugler length: Tags: Beginner
Framework agreements are essentially umbrella agreements which provide standard terms and conditions for goods or services requested under individual 'call-off' contracts. Call Off terms are those between members and suppliers and framework terms are those between us (CPC) and the suppliers on the framework.
CPC have produced the following guide to assist our members in how to use our framework agreements and advise members to use ‘call-off’ terms compared to supplier terms where possible, as these are more favourable and written to the benefit of members.
As a publicly funded body, a European Directive governs your organisation concerning its purchasing activity and this directive was enacted into English Law through the Public Contract Regulations 2015 (PCR 15). This has been superseded by The Public Procurement (Amendments Etc.) (EU Exit) Regulations 2020. The principles of the regulations are that you must demonstrate non-discrimination, equal treatment, transparency, mutual recognition and proportionality in all your purchases. These regulations come into force when your organisation’s spend on a certain product or service or contract over a reasonable period of time exceeds the threshold set and regularly updated by the government.
WHAT IS A FRAMEWORK AGREEMENT?
A framework agreement is an agreement with one or more suppliers/providers which sets out terms and conditions under which individual contracts (call-offs) can be made throughout the term of the agreement.
A framework agreement itself is not a contract, but the call-offs made from it are.
Framework arrangements create a streamlined and flexible process for procuring goods, works or services.
Framework agreements are established as a simplified route to market for you to use. The framework will have been tendered following all the guidelines and requirements of The Public Procurement (Amendments Etc.) (EU Exit) Regulations 2020 so that you can be assured of compliance with legal regulations. By combining the purchasing power of several organisations within your region or even with all the organisations in the sector you will also be able to benefit from preferential terms and pricing arrangements. The framework has been tendered compliantly, meaning that you do not need to conduct a full tender process yourself. More details on how to “call off” (how to buy) will be provided in this document.
WHY SHOULD I USE FRAMEWORK AGREEMENTS?
They can reduce the administrative burden of procurement. Individual purchases can be made without repeating many of the stages of a full competitive tendering process required the Public Procurement (Amendments Etc.) (EU Exit) Regulations 2020.
There is no need to formulate terms and conditions for call-off contracts because these are pre-agreed.
There is no need to assess financial standing, technical capability, health and safety or environmental aspects, as this work has already been undertaken (although it may be necessary to check certain supplier credentials as part of a due diligence process).
Aggregated demand through a number of FE and HE Institutions or other public sector bodies working together should be more attractive to suppliers and will usually result in lower unit costs.
The benefits of using framework agreements are:
- More advantageous pricing based on economies of scale from aggregated spend.
- A detailed specification of requirements is provided with detailed service standards and reporting requirements establishing a process for performance monitoring.
- The call-off terms and conditions have been established at framework level. These incorporate elements such as: service frequency/volume variation, disruption to service delivery, consolidation of contracts and exit planning.
- Reduced administrative effort and associated cost savings.
- Multiple methods of call-off including direct award, desktop exercise and full mini-competition including permitted variation of weightings.
- Supporting call-off documentation is provided in the form of a mini-competition template and a direct award template to ensure that agreement users make sure that call off contracts are brought within the terms of the agreement.
- The framework allows for the flexibility to determine specific requirements at the call off stage.
- Framework agreements support longer term business planning as they span a period of typically four years and allow some stability from market fluctuations.
- Contracting authorities such as CPC and other relevant education sector Consortia will provide contract management support to you should you experience any issues with suppliers and will act in your best interests.
CAN I USE ANY FRAMEWORK AGREEMENT?
No. Before making a call-off under a framework agreement, you must ensure that:
- The particular goods, services or works required are available under the framework agreement (i.e. within the scope of the framework agreement as originally advertised); and
- Your organisation falls within the range of contracting authorities that can lawfully use the framework agreement (i.e. FE Institutions are identified or named within the Contract Notice).
HOW DO I USE A FRAMEWORK AGREEMENT?
Users of framework agreements award ‘call-off’ contracts against the framework of approved suppliers. The call-off will be a contract between the relevant supplier and your Institution. Staff should always consult the ‘Buyer’s Guide’ provided by the contracting body before making any call-offs, as this document will explain the procurement process that should be followed.
To ensure that agreement users can achieve favourable pricing, all call-off contracts are for a standard maximum term of 4 years. It is for the member institution to specify whether services will be called off on a single contract of four years duration or members may, at their discretion, agree to call-off contracts for a shorter duration.
You must place your order in writing quoting your purchase order number. This can be via email or your eProcurement platform if you have one.
You must quote the framework agreement reference and title in your purchase order to ensure that you benefit from the commercials associated with the agreement, such as price.
You should then send the supplier the Call-Off terms and conditions provided by us and ask for these to be signed.
Minor points can be re-negotiated with the consent of both the supplier and the organisation, such as payment terms. On some frameworks which were NWUPC led, you can use your own organisational Terms and Conditions if preferred. Never sign the suppliers Terms and Conditions as they will not be advantageous to you.
WHAT HAPPENS IF I DON’T USE A FRAMEWORK AGREEMENT IN A COMPLIANT MANNER?
If frameworks are not used in the manner intended or as described within the Buyer’s Guide, it is possible that your institution could be subject to an ‘ineffectiveness order’ being raised against the call-off contract.
Any contract resulting from the misuse of a framework agreement, for example calling-off a framework where your institution has not been named as a party to that framework, or a material variation to the fixed terms of calling-off, would be viewed as a direct award that would be at risk of an ineffectiveness order.
There have recently been a number of cases where members have signed up to suppliers’ terms and conditions. These are not only advantageous to the supplier but they also bind you into a contract without linking to the original framework and leave you wide open to abuse. Supplier contracts might incorporate the following:
1. Minimum contract period longer than expected: You could sign up to 3, 4 or more years.
2. Termination periods linked to a specific date with automatic contract extension (roll over contracts): If not cancelled by a certain date, the contract will ‘roll over’ for another minimum contract period.
3. Early termination with compensation payments to the supplier: Demand of compensation payments for terminating early which could cover the remaining period of the original contract period.
4. Different reporting process and content: As this is not linked to the framework these will not be enforceable or form party to the contract
5. No agreement to service KPIs: Service KPIs are part of the framework. Without the framework terms and conditions these are not valid.
6. No safeguarding guarantees: Again this is part of the framework and not valid if these terms and conditions are not signed.
7. No service performance guarantees: Expectations are listed in the framework documentation and are part of the terms and conditions.
If you have any questions relating to any of the points above or require any further guidance, please do not hesitate to contact your Regional Procurement Advisor.