The OGC has issued two separate practice notes addressing practical issues it has encountered in the use of framework agreements: (i) the procurement of general purpose frameworks by non-contracting authorities, and (ii) the conditions under which contracting authorities may safely use an existing framework agreement.
The OGC has observed several instances of private businesses procuring general frameworks with no mandate from contracting authorities to begin with, and on the basis of the breadth of the purchasing organisations they claim to serve, have been able to secure good prices from some suppliers. This has apparently been particularly prevalent in respect of energy supplies.
The main point of a framework agreement (legally) is to obtain a pragmatic mechanism from which buyers can call off multiple contracts – often of the same or similar nature – at agreed rates and terms without having to go through the time and trouble of an individual OJEU procurement for every job.
However, not to go through the individual OJEU notice route (when the circumstances would otherwise require) is only legitimate if the contracting authority concerned uses a properly constituted framework for which it is a qualifying purchaser.
A framework is only properly constituted (for a given purpose) if it is legitimately set up by or on behalf of a contracting authority to begin with, and the contracting authority seeking to avail of the framework is named specifically in the original notice, or fits within a class of contracting authorities named in the notice from which it is immediately identifiable. For example, a registered (social) housing provider may not procure from a framework set up for local authorities and vice versa.
The OGC notes that it is unlikely that a private organisation (non-contracting authority) can set up a legitimate framework if:
- The organisation is not acting demonstrably on the instructions of a contracting authority as its agent.
- The terms of the agency relationship itself is not consistent with the procurement rules.
- The arrangement was set up at the private organisation’s initiative, for example as part of its general activities, with the agreement of the contracting authority being secured later.
The OGC adds (addressing adequate descriptions of purchasing bodies entitled to use frameworks) that descriptions of classes of contracting authorities must be precise and anything so general as not to allow the market to immediately understand what bodies it is dealing with must not be used. The OGC advises that to put such matters beyond doubt it is advisable to put a web link to a list of the relevant class members.
Finally, the OGC notes that contracting authorities who are not members of a given class set out when the framework is first procured should not be able to join that framework at a later date following whatever reorganisation places it there. A correctly procured framework allows potential suppliers to identify at the outset the scope of the bodies entitled to purchase from it: therefore any new buyers that appear to become eligible by reference to the class definition during the lifetime of the framework will arguably not be able to use it, because they will not have been identifiable at the outset.