Procurement in a Nutshell: Procurement Act 2023 – Frameworks
19th April, 2024
This Nutshell will analyse the new obligations on contracting authorities in relation to Framework Agreements, drawing attention to any key changes from previous procurement legislation which contracting authorities ought to be aware of.
On 26th October 2023 the Procurement Bill received Royal Assent and is now expected to come into force in October 2024.
The Act will, in particular, revoke the following:
- Public Contracts Regulations 2015 (PCR)
- Concession Contracts Regulations 2016
- Utilities Contracts Regulations 2016
What’s new?
Section 45 defines a “framework” as a contract between a contracting authority and one or more suppliers that provides for the future award of contracts by a contracting authority to the supplier or suppliers.
A framework must include the following information:
- A description of goods, services or works to be provided under contracts awarded in accordance with the framework
- The price payable, or mechanism for determining the price payable, under such contracts
- The estimated value of the framework;
- Any selection process to be applied on the award of contracts
- The term of the framework
- The contracting authorities entitled to award public contracts in accordance with the framework
- Whether the framework is awarded under an open framework
The Act makes clear that contracts under a framework agreement can be awarded either through mini competitions or a direct award. A contracting authority can only award a contract directly if the framework sets out the core terms of the contract and an objective mechanism for supplier selection.
Section 47 states that framework agreements are limited to four years, except for defence and security frameworks or a utilities framework which are limited to light years.
However if the contracting authority considers that the nature of the goods, services or works to be supplied under the framework means that a longer term is required, then it can be extended provided that the reasons for such an extension are detailed in the Tender or the Transparency Notice for the purposes of the framework.
In addition, the Act introduces a new type of framework called an open framework. Section 49 provides for the award of successive frameworks on substantially the same terms. The Explanatory Notes state that this is a scheme under which new suppliers could be added to the scheme at set times during its lifetime. It is therefore not closed to new suppliers but is also not permanently open like a dynamic market. An open framework must be reopened after the first 3 years and at least every five years thereafter, up to a maximum term of 8 years.
What’s changed?
Much of the legislation relating to frameworks is similar to that detailed in the PCR, except that the previous test requiring that contacting authorities be clearly identified in the Contract Notice is not included in the new legislation.
The main change in relation to frameworks is the introduction of the ‘open framework’, which provides contracting authorities with greater flexibility to allow new suppliers to join.
What does this mean?
While frameworks under the Procurement Act will continue largely as before, contracting authorities should prepare for, and seek further guidance on, the utilisation and operation of open frameworks.
For further information please contact Melanie Pears or Tim Care in our Public Sector Team
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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