Dr Ama Eyo Lecturer and Public Procurement Specialist Institute for Competition and Procurement Studies, Bangor University, North Wales, United Kingdom Framework Agreement: Perspectives from different jurisdictions

Agenda  Preliminary issues  Framework Agreement (FA) – ABCs……  Importance and Benefits of FA  Setting up  Models  FA in different jurisdictions - Perspectives  Some commentaries on FA

Framework Agreement (FA)?  An agreement to secure the future supply of a product, service or works over a period of time which involves:  Solicitation of tenders or offers against set T & C;  Submission of tenders indicating the terms on which different supplier(s) are willing to supply;  Subsequent placing of periodic orders to conclude procurement contracts with supplier(s) under the terms of FA as particular requirements arise!

Framework Agreement (FA)? Agreement specifying:  Mechanism for future procurement contracts  Terms of the procurement Procurement contract

Importance  Tool for procuring common use items….  However it is different from supplier lists!  While both identify suppliers for future needs however FA sets out the T & Cs and the scope of future needs of PE while Supplier List does not!

Terminologies  Some countries in Africa  Running rates/ term contracts  Australia  Panel arrangement  Canada  Supply arrangements; Standing offers  USA  Indefinite delivery/indefinite quantity (ID/IQ);  Task order contracts  European Union  Periodic or recurrent contracts;  Purchase arrangements;  Umbrella contracts.

Benefits of FA (1)  Enhances administrative efficiencies;  Can help to achieve process efficiencies through reduced transaction costs, procedural costs and reduction in time;  Useful for urgent or emergency procurement;  Can guarantee readiness and security of supply.

Benefits of FA (2)  Improves performance in simple and low value repeat procurement;  Can enhance SME participation;  Can enhance competition through aggregation; and  Increases public officials freedom to use their judgment to enhance VfM.

Setting up  Stage 1 - Master contract  Identification of one or more suppliers on the basis of a tender or similar offer and conclusion of the FA for the future supply  Stage 2 – Procurement contract  When the need arises, PE places an order or enters into a procurement contract

Models  Model 1  Close, Complete, Limited  Model 2  Close, Incomplete, Limited with second stage competition  Model 3  Open, Incomplete with second stage competition  May or may not be limited

Participants in FA

Countries Perspectives (1) Countries with explicit legal provisions on FA Perspectives EU MS especially France, Denmark, Finland, Iceland, Sweden, and UK Models 1 & 2 as FA (***Model 3 as DPS) Detailed regulation (with some gaps - second stage of the procedure) e.g, rules on conditions for use, identity of users and duration USAModels 1, 2 and 3 Regulation but a lot of procedural flexibility leading to over use

Countries Perspectives (2) Countries with explicit legal provisions on FA Perspectives Africa *Uganda, Tanzania, *Malawi, Ethiopia, Rwanda, *Burkina Faso, Mali, *Niger, Senegal  Most use Model 1 but Malawi and Ethiopia also use Models 2 and 3  Variable detail in regulations (on conditions for use, limits on use, maximum duration)  Hindrance – rules on aggregation

FA IN UNCITRAL MODEL LAW

Criticisms of FA  Risks to transparency  Limits market access  Overuse  Complex design issues  Anti-competitive conduct on the part of suppliers - collusion  Discretion of procurement officers at the call-off stage

Addressing some criticisms (1)  e-Procurement can complement FA  Examples,  South Korea – MAS;  EU

Addressing some criticisms (2)  PE can use e-Procurement to strengthen:  Strengthen  the decision making process around setting up and organizing FA;  planning of FA  management of FA;  Develop use of FA when appropriate;  Flag the abuse of framework agreements or their inefficient use; and  leverage full potential of framework agreements.

Summary  Differences between the design and regulation of FAs in different systems  Transfer experience with care!  Key decisions:  Whether or not to introduce;  Design;  Needs to reflect capacity of its participants  System may need to by dynamic  Monitoring arrangements;  Sufficient procedural safeguards to protect transparency and competition;  How to address breaches of procedure.

Dr Ama Eyo Lecturer and Public Procurement Specialist Institute for Competition and Procurement Studies Bangor University, North Wales, United Kingdom Thank you – any questions?