Second of a three part series on frameworks: What criteria does a framework need to satisfy in order to be successful
It is important to remember that we are really still in the infancy of frameworks development and use. Frameworks were only included in the Public Contract Regulations in January 2006. Prior to this “suppliers lists” were commonplace until the EU questioned their transparency and ability to provide fair competition. The law provides limited guidance on how frameworks operate including the number of suppliers, call-off mechanism’s and a four year time limit. Within these broad parameters there is the potential to create a highly effective and valuable procurement tool, or to waste huge amounts of time to create a laborious and inefficient monster that doesn’t’ deliver for the client, contractor or the reputation of the sector.
There are some great frameworks that serve their purpose to appoint good quality contractors and consultants to complete public sector projects. The effectiveness of these frameworks will have been established in the procurement strategy and embedded in the processes and procedures that govern them. Every framework will be different but there are a number of attributes that should be considered to ensure the effort of establishing a framework is worthwhile. These are identified below:
· Volume of work – There must be a healthy project pipeline and this should be identified and communicated to suppliers.
· Processes and procedures – There is a need to proactively manage a framework through documented procedures that both clients and suppliers will adhere to.
· Performance management – Mutually agreed KPI’s are utilised and league tables published to encourage peer competition.
· Dispute resolution – Structured mechanisms used with a hierarchy of escalation procedures.
· Fair payment – 30 day payment terms enforced for client and supply chain to end this persistent blight on our industry. Project bank accounts adopted possibly.
· Framework management – The resource effort to management the framework (for both client and suppliers) should be reflective of the project pipeline value.
· Innovation and knowledge share – Simple communication techniques can support continuous improvement for all parties benefit.
· Social value – Long-term relationships provide for the opportunity to contribute to the community through training and apprenticeships.
· Leadership – All of the above needs have clear leadership to achieve the desired outcomes.
These aspects together with a framework design that has a degree of flexibility within the confines of Public Procurement Regulations will assist to achieve framework objectives.
The skills required for framework management will become more in demand. A public sector client will have to see and achieve the benefits from investing in a framework agreement. For some clients the benefits may be just in the reduction of procurement costs, others may see the approach as an investment to improve their project delivery and increase value for money.
The current status of construction framework agreements has developed over the past 10 years to varied degrees of success. Because there is such a proliferation of frameworks in the market today it will take a long time to incorporate best practice into real practice, exasperated by the four year renewal cycle. Part three of this series looks at how framework may develop over the coming years.
Charles McSweeney is a senior director at Sweett Group