Public sector buyers often use Frameworks to select a short-list of pre-agreed suppliers. The organisations using that Framework (who might range from a single entity such as the NHS, to a large selection of buyers in a particular sector) then commit to obtaining those services from the ‘approved’ suppliers on the Framework.
Frameworks: The Good, The Bad and The Ugly: Frameworks get something of a mixed press. This is driven mostly by the amount of work that a business has to do to earn a place on one, and the uncertain level of work that they might gain, even when appointed.
In 2018 the Civil Engineering Contractors Association (CECA) published the results of a year-long study into frameworks. They noted that, of the bidding organisations that took part in the survey:
- 71% frequently reported less than anticipated workloads from the frameworks that they had secured a place on
- 64% indicated a regular lack of workload visibility – i.e. what was in the framework pipeline
- 56% reported that it was common for frameworks to have unnecessary second competitions
- 54% said that frameworks frequently favoured lower cost over quality.
This may not be the case in your sector, but it is always worth taking the decision to bid seriously and qualifying any framework opportunities as rigorously as you would a contract-specific tender. Think seriously about the costs and benefits of participation.
Addressable market: Framework operators are keen to recruit both buyers and suppliers. Prior to launch, new operators are required to demonstrate that their framework is both viable and useful. However, it is still possible that:
- their forecast usage might be unrealistic
- other/better options exist for buyers to procure defined services, including a competing framework
- even businesses appointed to a framework, might find that the work allocation favours some more than others.
As such, it is vital that you gain an insight into how much work you can expect from a Framework before you consider your bid. This will be easier if you are bidding for a 2nd or 3rd generation framework where you can search for published pipeline data from buyers and suppliers alike. What can they tell you about the volume and type of work available, and the size of a typical contract? Are the framework providers issuing Prior Information Notices (PINs), or hosting webinars which will give you the chance to size up the opportunity early on?
Always explore the assumptions that the framework is built on and take time to ask the ultimate buyers how they intend to use it to purchase goods and services. For example, will this framework generate their only source of suppliers?
Work Allocation within the Framework: Individual contracts within the framework can be awarded in various ways and the mechanisms should be made clear at the launch. Some frameworks offer work on a rotational basis, often starting at the highest-ranking supplier and then working down the list as other contracts are called off. This is fine if you are happy to pick up one in say every six contracts, but it can backfire if the size of the contracts varies dramatically. You don’t want to always get the smaller contracts, just because of the way that the work is allocated. In some circumstances, work will be routinely offered to the first supplier on the list, with the bidders in second place only picking up a contract if the top supplier turns it down.
Mini competitions amongst framework suppliers members are also common. Since those on the framework have already proven their credibility, the evaluation criteria (i.e. the Price / Quality ratio) will typically focus more on price. This could work well for you if you are confident that you can consistently come in more competitively than your closest competitors.
Resource Commitments: Recognise that the resources and effort required to win a place on a framework can be as demanding as competing for a defined contract, but without the guarantee of immediate revenue. In addition, if there are further mini competitions required to secure work, then additional bid effort will be needed later on. Be clear about whether there are other ‘maintenance’ costs associated with selection such as reporting responsibilities, paying the framework provider a percentage of work allocated or the requirement to actively promote the framework.
Promotional and Developmental Benefits of Frameworks: It is right to celebrate the success of an appointment to your chosen Framework, but it is also wise to advertise that success externally. The framework operators will have run a robust process to select credible suppliers and you have proved yourself up to the mark. You may also find that you can now gain access to further support and training that is available only to Framework members, which is beneficial for both your organisation and your key staff.
In summary:
- Do your own market evaluation to establish the likely type, value and frequency of work available
- Be clear about the effort required to win and maintain the framework
- Understand how work will be allocated and your competitive position
- Monitor the revenues earned from the frameworks you are on, to be clear about their value to you.
Appointment to the right framework could be a boon to your business, but if you’re unsure whether or not an opportunity is right for you, consider getting a Bid Specialist involved to help you.