What is a framework agreement?
A framework agreement is a standing deal with one or more suppliers. You agree the price list, the quality, the delivery terms and the period in advance. Then, each time you need the item, you place a call-off order under those terms.
The idea is simple: spend the effort once, and benefit many times. It replaces a stream of small competitions with one larger and better one.
When does a framework make sense?
| Good fit | Poor fit |
|---|---|
| Repeated needs: fuel, vehicle hire, printing, stationery, cleaning | A one-off purchase |
| Uncertain quantity and timing | A precise, single delivery |
| Items you must get quickly, such as emergency kits | Items with unclear specifications |
| Prices that suppliers will hold for a period | Highly volatile markets with no price terms possible |
| Several projects buying the same thing | Needs that change every month |
If you find yourself running the same quotation round every month, ask whether a framework would save time.
Our article on how many quotations you need shows the usual bands, and a framework can take the place of repeated rounds when your rules allow it.
How to set one up
- Check the need. Look at the last year of purchases. Group them by item and supplier. Estimate volume, and note the range.
- Check the rules. Read your policy and your donors’ requirements for competition and contract length. Some require formal tenders for the value of the whole framework.
- Write the specification. Describe the goods or services, quality, delivery places and response times.
- Run the competition. Invite suppliers, set criteria, score offers and record the decision. Treat it as a large purchase, with a panel.
- Award to one or several suppliers. Several gives you a back-up if one fails. Decide how call-offs are shared, such as by ranking or by region.
- Sign the agreement. Include prices, terms, validity, performance measures and exit conditions.
- Tell users. Staff must know it exists and how to order.
What goes into the agreement?
Keep it short and clear. Include:
- parties and the period it covers,
- the items or services and their prices, or the pricing method,
- how prices may change, and when,
- delivery times and places,
- quality standards and the right to reject poor goods,
- payment terms,
- performance measures and reporting,
- how disputes are handled,
- a clause on conflicts of interest and ethical conduct,
- how and when either side can end it.
Have a lawyer check the text. Contract law differs by country, so check what applies to you.
How to manage call-offs
A framework fails when nobody manages it.
- Keep a call-off form. It names the framework, the item, the quantity, the project and budget line, and the price from the agreement.
- Still approve each call-off. The framework sets terms, not authority. Each order goes through your approval limits.
- Check prices on every invoice. Compare with the agreed list.
- Receive and record goods as normal.
- Track use. Record the value ordered per supplier, per month.
- Review performance. Measure on-time delivery, quality, and response to problems. Our article on supplier scorecards shows a simple way.
- Review before the end date. Decide whether to renew, change or stop.
What risks come with frameworks?
- Lock-in. You stop checking the market, and prices drift above it. Review prices against the market on a set date.
- Dependence. One supplier becomes critical. Award to more than one where you can.
- Misuse. Staff order outside the scope. Define what is in and out.
- Splitting. A large need is divided into call-offs to avoid an approval. Treat the total value as the test.
- Conflicts. A framework supplier is linked to a staff member. Ask for declarations. See conflict of interest in procurement.
- Donor mismatch. The framework does not meet a donor’s rules for a grant. Check before charging.
Where EMPOBase fits
EMPOBase Procurement links each request to a project and budget line and routes it through approval levels L1 to L5 that your organization sets. Vendors are kept in a register, and Vendor Scorecard keeps supplier performance on the record, which supports a framework review. EMPOBase does not have a dedicated framework agreement record or call-off tracker, so keep the agreement and its price list in your own files and refer to them on each request. See the procure-to-pay workflow for the approval chain.