Steve Brunning provides some initial reflections on what the Procurement Bill 2022/23 has to say about open frameworks. As with other sections of the Bill, the drafting is somewhat convoluted and not altogether clear, he argues.
We were amongst the 27% who did not support the original Green Paper proposal to introduce an ‘open’ framework model to the UK public procurement regime. It has made its way into Clause 47 of the Bill however and sets out an alternative to the traditional closed framework that we have become accustomed to in the UK.
What clause 47 says
An ‘open framework’ must involve the appointment of at least 2 suppliers and is defined as “a scheme of frameworks that provides for the award of successive frameworks on substantially the same terms”. There must be an award of a framework at least once during the initial 3 years of the open framework term, beginning when the first framework is let. Assuming this is talking about 2 different frameworks (the one that is let at the start of this 3-year period and from which the 3 years are calculated, and the one that must be let during that 3-year period) this is actually a reduction to the maximum 4-year term that applies at the moment. A third framework must then be awarded at least once in the 5-year period following the award of the second framework.
So, for example, if an open framework was set up on 1 January 2024 for 8 years terminating on 31 December 2031, it might be opened up again on 1 January 2025 in which case it must be opened up at least once more before 1 January 2030. Alternatively, the first framework could run until 1 January 2027 at which point a new framework is tendered to cover the remaining period.
The explanatory notes confirm that a new framework could conceivably be awarded every year during the maximum 8-year open framework term, although we cannot see why a contracting authority would want to do this, other than in the special circumstances applying to frameworks with no limit on the number of suppliers.
Suppliers staying on open frameworks
Where no limit is set on the number of suppliers that can be admitted to an open framework, the contracting authority may re-appoint an existing supplier to the open framework at each opening based on either:
(a) the fact that the supplier has already been awarded a framework under the scheme;
(b) a tender relating to an earlier award under the scheme; or
(c) a tender relating to the current award.
So, if a supplier has been successful in winning a place on such an open framework, a contracting authority can allow the supplier to keep its place for the duration of the open framework term without having to re-evaluate its tender. However, (b) and (c) imply that an existing supplier is still to be given the opportunity to update its previous tender at each new framework award, presumably so that they are not disadvantaged vis-à-vis the offerings of new bidders joining the framework.
Where a framework does limit the number of suppliers, an existing supplier can only be reappointed based on its existing tender or new tender. This means that whichever tender is relied upon, it would need to be evaluated against others (both existing and new) to determine which suppliers will stay on/join the framework for the next iteration.
As we said in our response to the Green Paper, this does not provide much practical benefit over the existing regime. It is already possible to set up a series of frameworks on substantially similar terms.
The main difference under the Bill is that for frameworks with an unlimited number of suppliers, a supplier could conceivably sit on a framework for up to 8 years without having to retender. This is the only practical advantage from the new ‘open framework’ provisions.
It would theoretically be possible for this to apply also to a framework with a limited number of suppliers (with the supplier’s original tender being evaluated against new tenders when the framework is opened up to competition at the end of the 3- or 5-year period). However, the prospect of an existing supplier not taking the opportunity to update its tender at each framework award under an open framework seems very low. They will likely want to update their tender at each iteration to improve their offering both to ensure it stands the best chance of being reappointed and to improve their chances of being awarded a call-off contract.
The new open framework regime actually provides less flexibility, due to the requirement that each framework iteration under an open framework has to be on “substantially the same terms”. A series of frameworks under the current law would not be so restricted as the terms of each framework could be updated each time a new framework is let.
Adding new suppliers
A better option might have been to retain closed frameworks only but permit a mechanism which allows new suppliers to be added in certain circumstances.
For example, if a supplier ceases to meet the minimum selection or award criteria or removes themselves from the framework, a contracting authority could be allowed to offer their place to the next-in-line bidder from the original procurement for the remaining duration of the framework. There are some frameworks currently in operation that include ‘tiers’ of suppliers or reserve lots that are called upon when the first tier/prime lot cannot meet a requirement. The option of adding a supplier to a framework post-appointment in this way would not seem to be inconsistent with this practice.
It might also be possible to run a tender process to add new suppliers to an existing framework, whilst retaining the existing suppliers. However, this would be more difficult in relation to using both the original suppliers’ tenders and the new suppliers’ tenders for call-offs. It might mean that all call-offs would need to be by mini-competition.
There are some fundamental issues with the provisions in the Bill on frameworks. These relate to, for example, the new definition of a ‘framework’ itself, the new direct award conditions and how the provisions on excluding suppliers work in the framework context.
We also have concerns about what is missing from these provisions from a monitoring and enforcement perspective.
We are intending to cover these in a future briefing – or perhaps even “a scheme of briefings on substantially the same subject".