Sub-Regional Caribbean Public Procurement Conference E-Procurement and the use of Framework Agreements Port of Spain, Trinidad June 22, 2014 Sabine Engelhard

E-Procurement and the Use of Framework Agreements 2 E-Procurement and the Use of Framework Agreements Topics Overview Segment I: What is a Framework Agreement? Segment II: Why doe Framework Agreements make sense with E-Government Procurement? Segment III: The Bottom Line 2

Segment I What is a Framework Agreement

Framework Agreement –Definition Segment I: What is a Framework Agreement ? Framework Agreement –Definition No universally accepted definition-Even different names (Framework, blanket, indefinite-quantity, indefinite-delivery…). Characteristics are common: Used when standard needs recognized but exact quantity, frequency and timing not clearly identifiable upfront. Agreement specifying the contractual conditions for future orders for the goods, services or works covered by the framework. Specific duration in time. Covers specific commodities, services, works…Does not work for everything. Specifies agreed prices for goods, works, services, professional fees. Used as needed-no guaranteed volume of procurement. 4

Framework Agreement a Strategic Element of Government Procurement Segment I: What is a Framework Agreement ? Framework Agreement a Strategic Element of Government Procurement Need clear regulation with appropriate legal and institutional set-up. Allows a strategic approach to procurement: at a contracting entity/agency level, or at a country level. Not a panacea-Appropriate in certain cases. Similar standardized needs are anticipated, planned and grouped. Use of catalogs and schedules. 5

Framework Agreement and Increased Efficiency, Economy and Flexibility Segment I: What is a Framework Agreement ? Framework Agreement and Increased Efficiency, Economy and Flexibility Arrangement is already in place. Sufficient capacity to manage Framework Agreements. Arrangement allows maximum leverage for items included. Can be set up: With several suppliers/contractors (multiple awards), or Only one supplier (single award). Orders could be: Competed each time (mini competition), Directed to one awarded supplier/contractor. 6

Framework Agreement and Increased Efficiency, Economy and Flexibility Segment I: What is a Framework Agreement ? Framework Agreement and Increased Efficiency, Economy and Flexibility Can be set up at different levels: For a country; or For an agency or a group of agencies. Can be set up under different timeframes (2 years, 3 years…) can also be renewed with an extension in some cases. To keep its efficiency and flexibility should cover reasonable period (whether first period or extension). After expiration-Open competition to avoid risk of diminished efficiency. 7

Framework Agreement and Transparency & Accountability Segment I: What is a Framework Agreement ? Framework Agreement and Transparency & Accountability Existing arrangement disclosed-Information available to all in a timely fashion (ideal situation): Commodities, services, works, professional services specified. Names of suppliers/contractors available. Rates available. Spend available. Future Opportunities disclosed- Information available to all in a timely fashion and competed openly under clear and fair rules. Rules for sole sourcing or single award also disclosed and clear. 8

Framework Agreement and Transparency & Accountability Segment I: What is a Framework Agreement ? Framework Agreement and Transparency & Accountability Increased transparency for suppliers/contractors and civil society (tax payers). Increased confidence in agency/government. Increased participation from suppliers/contractors. Increased competition. Increased Value for money. Generation of savings. 9

Segment II Why do Framework Agreements make sense with E-Government Procurement?

E-Government Procurement and Framework Agreements Segment II: Why do Framework Agreements make sense with E-Government Procurement? E-Government Procurement and Framework Agreements How do they complement each other? E-Procurement can only achieve its full potential with adequate legal and institutional frameworks. Can be implemented in different phases and at different levels. E-Procurement brings technology and reliable information to the entire procurement process in real time. E-Procurement helps modernize the vision of procurement-Strengthens strategic dimension of procurement. 11

E-Government Procurement and Framework Agreements Segment II: Why do Framework Agreements make sense with E-Government Procurement? E-Government Procurement and Framework Agreements How do they complement each other? E-government Procurement is about: Increased transparency; Increased Efficiency; Increased Economy; and Increased accountability. 12

E-Government Procurement and Framework Agreements Segment II: Why do Framework Agreements make sense with E-Government Procurement? E-Government Procurement and Framework Agreements How do they complement each other? E-government Procurement is about: Increased Confidence; Increased Relevance; Increased Competitiveness; Market development/market Access; and Increased Performance; Increased Value for money. 13

E-Government Procurement and Framework Agreements Segment II: Why do Framework Agreements make sense with E-Government Procurement? E-Government Procurement and Framework Agreements How do they complement each other? E-Procurement is a medium which can help: Strengthen the whole decision making process around the way framework agreements are set up and organized. Strengthen the planning of Framework Agreements. Strengthen management of Framework Agreements. Ultimately build capacity. 14

E-Government Procurement and Framework Agreements Segment II: Why do Framework Agreements make sense with E-Government Procurement? E-Government Procurement and Framework Agreements How do they complement each other? E-Procurement is a medium which can help: Develop use of Framework Agreements when appropriate. Flag the abuse of framework agreements or their inefficient use. Ultimately leverage full potential of Framework Agreements. 15

Synergies and Benefits combined Segment III: What is the bottom line? Synergies and Benefits combined What do you get? E-Procurement & Framework Agreements can help: Develop use of catalogs and schedules - Taking into consideration the need for unification of information-Allowing increased participation of bidders from different countries; Increase national or regional integration -Framework agreements can be open for competition for suppliers/contractors from other countries; and Increase national or regional trade-Framework agreements can be used to that effect. 16

Synergies and benefits combined Segment III: What is the bottom line? Synergies and benefits combined What do you get? If well regulated and functioning e-procurement system and Appropriate Use & Management of Framework Agreements: Conducive to increased quality and savings in procurement; Contributes to more efficient management of public funds; Sizable savings realized-Very relevant for commonly used goods and services covered by framework agreements. Contribute to sustainable development. 17

Questions? 18