Framework agreements have been around for many years and are widely recognised as a reliable means to aggregate spend, speed up the procurement process and secure better value for those who use them.
But there’s still a widespread perception that time has somehow stood still when it comes to frameworks. It’s the idea that they’re a rather one-dimensional option for organisations to make savings and offer a homogenised product or service.
The reality is a consortium like Procurement for Housing (PfH) simply wouldn’t survive if it just offered more of the same, year after year. The social housing landlords that we serve are no different from any other organisation when it comes to pressure on budgets and the constant need to drive efficiency and value for money.
Modern framework agreements, when they’re delivered successfully, are far removed from what would have been available a decade ago. They remain a critical feature of procurement in the sector – underlined by the importance of a recent court ruling that removed any doubt that it’s legal for public sector landlords to use them.
The modern framework should be flexible, responsive to an individual organisation’s needs and represent a genuine partnership with the supply chain, not a means of squeezing their profit margins. For example, PfH’s latest materials framework covers a wide range of goods and services – from plumbing and heating, renewable products and tiles to tool and plant hire. Yes, it’s comprehensive. But more importantly, both clients and suppliers were heavily involved in putting the agreement together. That’s why it has a strong emphasis on price control, certainty of supply and wider scope of products. These are all issues flagged by landlords as major issues in what can be one of their most volatile and unpredictable areas of spend.
Frameworks like this also dispel the myth that they provide little more than an off-the-shelf, 'take it or leave it' option for buyers. That engagement with clients and suppliers continues on an ongoing basis and we encourage landlords to tailor frameworks to their specific needs, for example through mini competitions, focusing on specific core price files and bespoke service level agreements to deliver the contract.
In this way, framework agreements can open the door to wider consideration of an organisation’s procurement function. Could the experience and lessons learned from engaging in the process in one aspect of spend help to improve the way you approach other areas?
Framework agreements certainly make life easier for those who use them not only at contract set up (to eliminate the cost and resource of tendering) but also throughout the management of the contract, but we shouldn’t just dismiss them as the ‘easy’ option. The best ones have evolved to provide sophisticated and flexible solutions.
☛ Olivia Crookes is procurement manager at Procurement for Housing