Framework Agreements Article 33/Regulation 33

Framework agreements provide an efficient and readily available way for contracting authorities to source works, goods and services. The new Regulations incorporate new transparency provisions applying to the setting up and operation of framework agreements. In many cases these approaches will already be used as a matter of good practice. However, the new Regulations will put these requirements on a legal footing.

Clear identification of the parties to the framework agreement:

The new Regulations provide that a framework agreement can only be used by the contracting authorities which are “clearly identified” in the call for competition and the economic operators who are appointed when the framework agreement is set up. 

What does “clearly identified” mean? Must contracting authorities be individually named in the OJEU Contract Notice or can they be identified by reference to a type of authority or area, for example?

Regulation 33 is silent on this point.  So are there any more clues on what “clearly identified” means?

Recital 60, which outline the reasoning behind this provision in the Directive, explains that the contracting authorities which are parties to a framework should be identified either by name or by “other means” such as by reference to a given category of contracting authority within a clearly delimited geographical area. The Recital goes on to comment on the situation where a central purchasing body sets up a framework by reference to a general register or type of authority. In that case an economic operator must be able to verify not only the identity of the contracting authority but also the date from which the contracting authority has the right to use a framework agreement. The intention is to create clarity and certainty about the identity of the users of the framework.

The safest view is that contracting authorities should be individually named. Where this is done then they are “clearly identified”. The Recital provides a broader interpretation, which reflects views previously expressed by the European Commission and practices adopted in recent years in the UK. If contracting authorities adopt this broader interpretation then they can take comfort from the Recital and previous statements and practices but this will not be an entirely risk-free approach.

The emphasis on transparency can be seen in the new provisions relating to the award of contracts under multi-supplier framework agreements:

Award of a contract without running a mini-competition (direct award): 

The process for determining which framework provider will be awarded the contract must use objective conditions. The objective conditions must be set out in advance in the procurement documents for the framework agreement. This means that, in some cases, authorities setting up framework agreements will need to issue much more detailed information on the process and conditions to be applied to a direct award than they currently do. They will need to do this at the outset, in the procedure and documents setting up the framework agreement.

Decision on whether to make a direct award or run a mini-competition:

Where a framework agreement provides for both direct award and mini-competitions, the choice between these two award processes must be made using objective criteria. The objective criteria must be set out in the procurement documents for the framework agreement. 

Authorities establishing framework agreements will need to specify the circumstances and conditions where each approach can be used. This could, for example, relate to the quantity, value or characteristics of the requirements including the need for a higher level of service than originally tested to provide a clear boundary as to when a mini-competition is required.

Re-opening terms under a mini-competition:

The original procurement documents must also specify which terms could be subject to reopening of competition. Again, those establishing frameworks will need to define what flexibilities will be available to users.

Dynamic Purchasing Systems (DPS) Article 34/Regulation 34

New rules on the setting up and operation of DPS mean that these are likely to be an appealing method for procuring commoditised requirements.

A DPS creates an electronic market place through which contracting authorities can source requirements by inviting tenders from economic operators admitted to the system. The DPS must be set up using a restricted procedure to appoint economic operators as participants in the DPS.  One of the major advantages of a DPS over a framework agreement is that other economic operators can subsequently apply to join the DPS at any time in the life of the DPS.

The new Directive tackles a number of practical problems with the current DPS rules which meant that DPS have rarely been used in practice. For example, under the current rules a contracting authority wishing to make a purchase using the DPS has to publish a contract specific notice in the OJEU prior to issuing a tender. It then had a minimum of 15 days for submission of tenders. Under the new Directive there is no requirement to publish a contract notice and the tender period is 10 days, or for sub-central authorities the period may be agreed with the tenderers.

It is also possible to split DPS into categories for which different economic operators may be qualified. The time period for a decision on whether or not to admit an economic operator applying to join an existing DPS has also been shortened.

Electronic Catalogues Article 36/Regulation 36

The current Directive does not deal specifically with the use of e-catalogues, although they are routinely used in the UK. e-catalogues are particularly useful for framework arrangements and dynamic purchasing systems involving a broad range of supplies.
The new Directive has provisions regulating the use of e-catalogues in procurement.
Where a contracting authority plans to require or accept e-catalogues as part of a tender then this must be stated in the call for competition** together with an indication of the technical format required.

There is a helpful provision relating to the use of e-catalogues in the context of framework agreements. This allows previously submitted e-catalogues to be updated as part of a mini-competition process. This is subject to certain safeguards.
Contracting authorities may also award contracts based on a dynamic purchasing system by requiring that offers for a specific contract be presented in the format of an electronic catalogue.

** The “call for competition” is either (1) the OJEU Contract Notice; or (2) for sub-central authorities, the invitation to confirm interest when a Prior Information Notice as a call for competition is used. See Bevan Brittan byte size procurement update 2 for further information on use of a Prior Information Notice as a call for competition.

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