Frameworks have always been a significant part of the United Kingdom's public procurement regime, allowing a compliant route to market for contracting authorities which can often be quicker and more straight-forward than undertaking a standalone procurement process.
Much of the rules governing public frameworks remains very similar in the Procurement Act 2023 (PA2023) as we have previously known under the Public Contracts Regulations 2015 (PCR) however there are a few key changes which are worth exploring.
Frameworks
A framework is a contract between a contracting authority and one or more suppliers that provides for the future award of contracts by a contracting authority to the supplier or suppliers. Frameworks may allow for award of contracts by way of a mini-competition or by direct award. Direct award is allowed only where either the framework is with a single supplier or clearly defines the call-off contract terms and an objective mechanism for selecting the supplier (s.45(4) PA2023).
Small and medium-sized enterprises (SMEs)
The PA2023 continues to encourage contracting authorities to remove or reduce barriers to participation which may disproportionately affect SMEs. Whilst this is not limited to frameworks, they can provide an excellent opportunity to allow SMEs to participate in public-sector contracts. In particular, frameworks can allow SMEs to participate in one procurement process and be awarded multiple contracts with a reduction in the additional procurement activities needed. This can reduce the often disproportionate burden on SMEs, who often will bid for multiple contracts but only be awarded a fraction.
Open frameworks
A key new element of the PA2023 is the introduction of 'open frameworks' which allow contracting authorities to appoint new suppliers onto a framework throughout its lifetime under parameters set by the contracting authority at the time of setting up the framework.
The PA2023 describes open frameworks as a scheme of frameworks that provides for the award of successive frameworks on substantially the same terms (s.49(1) PA2023). This allows the contracting authority the ability to periodically refresh the existing framework to, for example, allow for the entry of new suppliers and refreshing the prices for existing suppliers. Whilst the maximum duration for a framework is still four years (except where there are specific factors justifying a longer period), open frameworks can last up to eight years, unless the framework is with a single supplier.
An open framework must provide for the award of a framework at least once during:
- the first three years of the framework, and
- each period of five years thereafter.
This allows contracting authorities various options depending on how often they wish to refresh the framework. For example, if the contracting authority wanted to maximise the eight-year maximum period it could do an initial three-year period, followed by a five-year period. Or, for more opportunities to refresh, a three-year period plus another three-year period and a final two-year period. It would even be permissible (if perhaps logistically difficult) to refresh the framework every year resulting in a string of one-year frameworks for eight (or fewer) years.
The key element is that the scheme of frameworks must be on substantially the same terms. This means in practice only minor changes to contractual terms can be made at the point of refreshing the framework. This should be assessed by reference to the permitted contract modifications set out in s.31 and Schedule 8 of the PA2023. The purpose of the refreshing is not particularly to change the terms or nature of the framework but to allow for new entrants and/or for existing suppliers to refresh their tendered prices.
A contracting authority may award the framework to an existing supplier by reference to:
- a tender relating to an earlier award under the scheme, or
- a tender relating to the current award.
Where the number of suppliers permitted on the framework is unlimited, existing suppliers may also be automatically granted a place on the framework without the need to review earlier tenders. For contracting authorities operating such frameworks this could serve to reduce the evaluation burden when refreshing the framework. However, note that it important to regularly ensure that any supplier meets the minimum standards for being on the framework.
Gold Standard
In 2021, the Cabinet Office published 'Constructing the Gold Standard', an independent review of public sector construction frameworks undertaken by Professor David Mosey. This sets out twenty-four recommendations for contracting authorities to implement in their frameworks, drawing upon the Construction Playbook policies.
The PA2023 can help contracting authorities meet the recommendations in Constructing the Gold Standard by promoting greater transparency, efficiency, and inclusivity in public procurement in a number of ways:
- Encouraging innovation and collaboration: The PA2023 supports longer-term open frameworks. Such extended framework terms should allow for ongoing supplier and supply-chain engagement, fostering innovation and collaborative solutions.
- Promoting fair access for SMEs: As noted above, PA2023 encourages the removal of barriers for SMEs. This enhances competition and ensures that a diverse range of suppliers, including SMEs, can contribute to public contracts, as recommended by the Gold Standard report.
- Sustainability and social value: The Act’s focus on incorporating social value into procurement decisions supports the Gold Standard’s emphasis on considering the broader impact of construction projects, including environmental sustainability, net-zero and community benefits.
In these ways, the PA2023 enables contracting authorities to follow the principles outlined in Constructing the Gold Standard, creating a more efficient, inclusive, and sustainable public procurement system.
