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www.bangor.ac.uk/law Dr Ama Eyo Lecturer and Public Procurement Specialist Institute for Competition and Procurement Studies, Bangor University, North Wales, United Kingdom a.eyo@bangor.ac.uk Framework Agreement: Perspectives from different jurisdictions
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www.bangor.ac.uk/law Agenda Preliminary issues Framework Agreement (FA) – ABCs…… Importance and Benefits of FA Setting up Models FA in different jurisdictions - Perspectives Some commentaries on FA
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www.bangor.ac.uk/law 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!
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www.bangor.ac.uk/law Framework Agreement (FA)? Agreement specifying: Mechanism for future procurement contracts Terms of the procurement Procurement contract
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www.bangor.ac.uk/law 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!
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www.bangor.ac.uk/law 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.
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www.bangor.ac.uk/law 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.
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www.bangor.ac.uk/law 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.
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www.bangor.ac.uk/law 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
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www.bangor.ac.uk/law 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
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www.bangor.ac.uk/law Participants in FA
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www.bangor.ac.uk/law 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
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www.bangor.ac.uk/law 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
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www.bangor.ac.uk/law FA IN UNCITRAL MODEL LAW
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www.bangor.ac.uk/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
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www.bangor.ac.uk/law Addressing some criticisms (1) e-Procurement can complement FA Examples, South Korea – MAS; EU
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www.bangor.ac.uk/law 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.
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www.bangor.ac.uk/law 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.
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www.bangor.ac.uk/law Dr Ama Eyo Lecturer and Public Procurement Specialist Institute for Competition and Procurement Studies Bangor University, North Wales, United Kingdom a.eyo@bangor.ac.uk Thank you – any questions?
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