The UK government is committed to making public sector procurement more SME-friendly. The Procurement Act 2023 has been designed with small businesses in mind, from amendments to procurement processes to evaluation criteria focusing more on value than price. To this end, framework agreements have been adapted to support SMEs as they navigate what can be a tricky landscape.
Introduction to Framework Agreements
Framework agreements are a type of procurement arrangement used in the public sector to streamline the procurement process. These agreements contain a list of suppliers who have demonstrated capability, competence, and value. They save time and money by reducing the need for lengthy procurement processes. This allows buyers to focus on project requirements, quality, and price. The Crown Commercial Service (CCS) is a key framework agreement provider in the UK, offering a range of frameworks for public sector buyers.
Why Public Sector Framework Agreements Matter for SMEs
How do framework agreements give SMEs a leg up in public procurement? There are four primary ways:
- Repeat business: Call-off contracts in framework agreements enable suppliers to bid on more contracts, offering the chance to win more tenders.
- Government goals: Increased chances to bid on contracts, to meet the government’s goal to grow SME participation in public sector procurement.
- Social value: This is the real playing field leveller because SMES are often better positioned to deliver local projects or initiatives that address social, economic, and environmental needs.
- Regional economic growth: SMEs can give regional economic growth a significant boost by employing locals, offering apprenticeships, purchasing local products, and engaging local services.
What Are Framework Agreements, Anyway?
Framework agreements are one form of tendering for public sector contracts. Here are seven key differences from the more traditional online contracts:
- Only pre-approved suppliers are added to the qualifying product/service providers list.
- Contracts on open frameworks can be extended to eight years. During that time, buyers can have several call-off contracts, allowing suppliers to participate in a mini-competition to find the best fit.
- Open frameworks are also, literally, open, so new suppliers can be added to the pool.
- Typical public sector framework agreements have a duration of four years. They are not open, so once suppliers have been selected, that’s it, there’s no further competition.
- It’s possible for public sector buyers to directly award a contract to a supplier under special circumstances.
- Framework agreements streamline the procurement process for public sector bodies because they eliminate the need to publish contracts from scratch. The qualifying suppliers are already in the pool.
- Framework agreements also meet the new transparency requirements detailed in the Procurement Act 2023.
Types of Agreements
There are several types of framework agreements, including open frameworks and closed frameworks. Open frameworks permit new suppliers to join at predefined points, while closed frameworks do not. Framework agreements can be used for a wide range of goods and services, including construction, IT, and professional services.
The Procurement Act 2023 introduces significant changes to the way public sector organisations purchase goods and services through frameworks and dynamic markets.
Once a supplier is awarded a place on the framework, they can participate in further competitions or direct awards for specific projects.
4 Benefits of Framework Agreements for Small Businesses
Framework agreements have several key benefits for SMEs. We’re going to look at four of the biggest benefits inherent in framework structures.
- Reduced bidding burden: Basically, it’s one and done – you’re pre-approved and don’t need to go through a full tendering process again. Although mini-competitions are a possibility to win a framework contract. This saves time, money, and resources that can be better used to improve your business offering.
- Long-term relationships: Because framework agreements are long-term, there is plenty of time to establish strong relationships with public sector buyers. This helps to secure repeat business and increases your visibility and credibility as a reliable supplier with high-quality standards.
- Collaboration opportunities: The cosy setting presents opportunities to get to know other parties within the framework. This can lead to collaborations with buyers and fellow suppliers, ultimately leading to innovations that drive your field forward (and enhance your reputation as a supplier who gets things done well).
- Continuous improvement: The nature of framework agreements and the improved relationships with public sector organisations help to strengthen the entire supply chain, while providing exceptional social value and continuous improvement in your business’s services, products, or works.
Framework Challenges for SMEs
The benefits of framework agreements are great, but SMEs first have to overcome some challenges. Here are two of the most pressing concerns shared by small and medium-sized businesses.
- Frameworks aren’t for SMEs: There’s a prevailing perception that framework agreements are for large suppliers and large projects. Yes, some large-scale procurement opportunities seem out of reach for small businesses, but there are ways to get around the problem. SMEs can join large businesses as subcontractors, getting all the experience with (almost) none of the risk. Public sector bodies can also break down contracts into Lots, ideal for potential suppliers.
What’s more, the government is developing new framework agreements specifically for low-threshold contracts. Supply2Gov’s procurement database provides access to these small framework opportunities, and has several guides to help SMEs and other potential suppliers prepare for public sector procurement.
- SMEs need experience and a good track record: Yes, experience in public procurement is preferred, but it’s not the be-all and end-all. Sufficient experience in the private sector can also strengthen your bid and give you a good chance of winning call-offs. Put together a case study to provide evidence of your marvellous work, and you’ll have the same chance of success as suppliers more experienced in the public sector.
You can also help your cause by collecting quality certifications. The International Standard Organisation (ISO) offers certifications in most things business-related, including cyber security, quality management, occupational health and safety, and environmental management. Supply2Gov provides Cyber Essentials and Cyber Essentials Plus certifications for suppliers.
Best Practices for Engaging with Framework Agreements
Best practices include building strong relationships with suppliers, providing clear specifications and requirements, and ensuring compliance with procurement regulations. Additionally, public sector buyers should consider the financial stability and quality assurance of suppliers when evaluating their suitability for a framework agreement. By following these best practices, public sector buyers can ensure that they get the most out of framework agreements and achieve value for money.
How to Find Framework Opportunities with Supply2Gov
Supply2Gov boasts the largest database of public sector contracts in the UK and the Republic of Ireland. This enables us to provide you with access to all the current framework agreements and future contract opportunities in your field.
Registration for local area alerts is free, with options to upgrade your package to include framework opportunities in the country, the UK, or the UK and the Republic of Ireland. All you have to do is set up sector and region-specific alerts, and you’ll immediately receive real-time updates on mini-competitions, pre-qualification options, and dynamic markets (replacing Dynamic Purchasing Systems – DPS).
Top 6 Tips to Prepare for Framework Success
Here are six of the best tips to win framework agreements and use framework contracts to your best advantage.
- Build a strong company profile. This includes optimising your profile for SEO and selecting filters that best represent your products, services, or works.
- Create a library of case studies, so you can choose which is most relevant for the framework in question.
- Keep a calendar of pre-market engagement sessions relevant to your business, including buyer events and industry briefings. Actually, attend the sessions. Early engagement is considered best practice in public procurement, so take advantage of each opportunity you get.
- Ensure you meet all compliance regulations, from the requirements in the contract through to international regulations.
- Keep a library of relevant documentation and ensure it’s always up to date and meets the specific requirements of the framework you want to bid on.
- Understand evaluation criteria and ensure you are ready with documents that prove your financial stability, experience, compliance, and certifications.
Get Ready to Join a Framework with Supply2Gov
Far from being inaccessible for SMEs, framework agreements are actually an excellent opportunity for small businesses to enter public procurement and start making a name for themselves. Framework agreements are designed to be inclusive, allowing new entrants to participate and compete for public sector contracts.
Supply2Gov is right here to provide the support and the tools you need to make a success of your new career as a coveted supplier. Simply register on our database and start finding SME-friendly framework agreements today.