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Presentation by D. Ivarsson, SIGMA expert (ENG) Eighth SIGMA Regional IPA Conference on Public Procurement, Montenegro, June 2018.


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Presentation by D. Ivarsson, SIGMA expert (ENG) Eighth SIGMA Regional IPA Conference on Public Procurement, Montenegro, June 2018.

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Presentation by D. Ivarsson, SIGMA expert (ENG) Eighth SIGMA Regional IPA Conference on Public Procurement, Montenegro, June 2018.

  1. 1. © OECD Implementation of framework agreements in the EU Daniel Ivarsson, SIGMA expert, Sweden 13-14 June 2018 Bečići, Montenegro
  2. 2. Topics covered • Nature and purpose • Operations • SIGMA Paper • Lessons learned 2
  3. 3. Framework agreement Agreement between: - one or more contracting entities; and - one or more economic operators, with the purpose to establish the terms governing contracts to be awarded during a given period, in particular the terms as to price and, where appropriate, the quantity envisaged 3
  4. 4. Regulatory framework • EU Directives  Directive 2014/24/EU, recitals 57, 60-62, 71  Directive 2014/24/EU, Article 33 • Case law of the Court of Justice of the European Union • National legislation • Other regulations 4
  5. 5. One contracting authority, one or more economic operators Contracting Authority Vendor Contracting Authority Vendor Vendor Vendor
  6. 6. Several contracting authorities one economic operator Contracting Authority VendorContracting Authority Contracting Authority
  7. 7. Several contracting authorities several economic operators Vendor Vendor Vendor Contracting Authority Contracting Authority Contracting Authority Vendor Vendor Contracting Authority
  8. 8. Fields of application  Repeated requirements for standard items – Standard equipment, office supplies, consumables – Standardised services (maintenance, cleaning) – IT or other technical support services  Uncertainty about total quantities – Foreseeable needs for urgent action (snow clearing, . .) 8
  9. 9. Advantages I • Flexibility to purchase goods or services covered by that framework agreement • The conclusion of the subsequent contracts is greatly simplified and can be performed more quickly than by using a “normal” tender procedure • Increased competition through call- offs/mini-competitions
  10. 10. Advantages II • Useful tool for avoiding the abusive way in which certain situations are wrongly set in the urgent needs category, thus forcing the use of direct purchasing • Greater opportunities for SME participation – potential for better value for money • Contracts adaptable to rapidly changing market conditions (IT products; fuel or energy; foodstuffs)
  11. 11. Operations • Award of the framework agreements themselves • Award of contracts under framework agreements (through a call-off mechanism) 11
  12. 12. Overview of main steps I • Determine needs and approach; aggregate • Advertise / invite tenders • Standard procedures for selection & award • Open, restricted, negotiated; competitive dialogue • Conclude agreement with one/several contractors • Agreement governs the way contracts are awarded under the framework, conditions of contract, duration (max. 4 years)
  13. 13. Overview of main steps II • Call off deliveries as needed  If there are several contractors, a secondary competition (“mini-competition”) may be used each time a contract is awarded under the framework  No subsequent changes to the terms and conditions of the framework agreement • Check deliveries; pay invoices • Monitor use, especially if several contracting authorities • Evaluate outcomes; adjust approach; prepare follow-up framework agreement
  14. 14. Lessons learned: typical issues  Suitability of a framework agreement vs. a traditional public contract  Planning and preparations are vital  Carefully analyse type of framework agreement and call-off procedure to use  Choice of procedure, criteria and tender evaluation methodology is important  Market concentration and SMEs  Duration of the framework agreement
  15. 15. Important reminders • Strong structuring effects on the market • Beware of tendency to use framework agreements in areas where they are not at all suitable • Before moving ahead with preparing a framework agreement, consider seriously whether it would indeed be most suitable for the procurement in question 15
  16. 16. Forthcoming SIGMA Paper • Complement to SIGMA Paper 47 Centralised Purchasing Systems in the EU • Good examples, lessons learned from EU practice of using framework agreements • Comparative data, gaps to be filled • Help introduce the use of framework agreements, guide their improvement 16
  17. 17. SIGMA Paper main parts • Basic definitions and concepts • Legal framework • Framework agreements step by step • Specific, related topics • Framework agreements in the EU • Conclusions and recommendations • Award and use in selected EU member countries 17
  18. 18. Award, use in selected countries • Selection of representative countries • Field visits, meetings with all concerned • Austria • Croatia • Ireland • Portugal • Sweden 18
  19. 19. Austria: results, lessons learned • Advantages: better value for money; no obligation to purchase; standardisation • Risks: monopolisation, lock-in effects; high share of large firms, single-supplier FAs • Issues: incorrect use; need to improve planning, build staff capacity • Decent participation rate: 4-5 per tender • Interest in cross-border FAs but no success 19
  20. 20. Croatia: results, lessons learned • Advantages, disadvantages: like Austria • Single-supplier FAs frequent, similar to traditional contracts: FA flexibility ignored • Multi-supplier FAs with all conditions set, mini-tendering rarely used • Mandatory public consultation on draft tender documentation for FAs • SME participation not an issue, but weak competition: participation rate: 3.2 per tender 20
  21. 21. Ireland: results, lessons learned • Focus: efficiency, savings, value for money • E-procurement established, developing • Pre-commercial consultations frequent • SMEs a focus, but medium firms dominate • Competition strong but few firms in infra- structure and IT • Horizontal issues: business development, innovation, new approaches 21
  22. 22. Portugal: results, lessons learned • Advantages, disadvantages: like Austria • E-procurement mandatory, also for call-offs • All FAs multi-supplier with mini-tendering • System of reference prices: itemised ceiling prices, must not be exceeded in call-offs • Obligation to participate in mini-tendering • High participation levels; SME participation policy issue only, not in practice • Concerns about lack of dynamism 22
  23. 23. Sweden: results, lessons learned • Advantages: economy, efficiency, relations • Concerns: lock-in, loss of CA competence, need to compromise on requirements • Late with e-procurement; no e-auctions • Horizontal policies: environment, social, SMEs; concerns about market structuring • High participation, high success rates - does this mean strong competition? • DPS seen to replace FAs 23
  24. 24. Thank you! Daniel Ivarsson