Framework agreements explained: how call-offs and mini-competitions work

Many suppliers chase individual contracts and overlook some of the most valuable opportunities in the public sector: framework agreements. A place on the right framework agreement can mean steady revenue for several years. Miss the boat, and it can be a long while before the next one sails. Here we explain how framework agreements work and how to position yourself, with examples from Norway, where Cobrief is based.

What a framework agreement is

A framework agreement is an agreement between one or more contracting authorities and one or more suppliers that sets the terms for the contracts to be awarded during a given period, in particular as regards price and quantity. The definition comes from the EU procurement directive (Directive 2014/24/EU, Article 33) and applies across the EU and EEA. In Norway it is implemented in the anskaffelsesforskriften (the Norwegian public procurement regulation), § 4-1. In other words, the buyer does not commit to one large purchase, but sets up an arrangement for many purchases ahead. The purchases themselves are made through call-offs (avrop in Norwegian): orders placed on the terms of the framework agreement.

A framework agreement is not a procedure in its own right. The buyer uses the ordinary procedures to conclude the agreement, and it is advertised in the same way as other contracts. So it is an ordinary tender you have to win to secure a place.

Framework agreements are used where needs recur: trades and craft services, consultancy, consumables, temporary staff. As a general rule, a framework agreement may not last longer than four years. Exceptions require special circumstances, for example relating to the purpose of the agreement, investment costs or users' needs. Four years is the norm, which is why these competitions come round at regular intervals. Every call for tenders is an opportunity.

The four-year rule comes from Article 33 of the EU procurement directive and therefore applies throughout the EEA. In Norway it is implemented in the anskaffelsesforskriften, § 11-1(4) and § 26-1(4). In the Norwegian utilities sectors (water, energy, transport and postal services), the forsyningsforskriften (the Norwegian utilities procurement regulation) applies instead, and there the limit is eight years (§ 22-1(4)).

One supplier or several

Framework agreements come in two main variants, and the difference matters a great deal for your day-to-day work. The rules on both, and on mini-competitions, come from Article 33 of the directive and apply across the EEA:

With one supplier, call-offs are made directly on the terms of the agreement. If you win, the deliveries are in practice yours for the duration of the agreement.
With several suppliers (often called parallel framework agreements), the buyer must decide in advance how the work will be allocated. If all the terms are set out in the agreement, an allocation key is used, for example that the supplier ranked first is always asked first. If not all the terms are set out, contracts are awarded after a new competition between the suppliers on the agreement, what is known in practice as a mini-competition (minikonkurranse in Norwegian, also called a reopening of competition). A combination is also possible, but it must then be clear when each method applies.

In a mini-competition, the buyer must consult in writing the suppliers on the agreement that are capable of performing the contract, set a sufficient time limit, and award the contract on the basis of the award criteria set out in the procurement documents for the framework agreement. In Norway this is laid down in the anskaffelsesforskriften § 26-3. How call-offs will be made must be stated in the tender documents. Read them carefully before you submit a bid, because they determine what your day-to-day work will look like if you win.

Mini-competitions are easy to underestimate. A place on the agreement is then not an end in itself, but a ticket to keep competing, with far fewer competitors than in an open competition.

Why framework agreements are worth more than they look

The value stated in the contract notice is the maximum value of all the contracts the buyer expects to award over the whole term of the agreement, including options. This method of calculating value comes from Article 5 of the directive; in Norway it is set out in the anskaffelsesforskriften § 5-4. It is this total value, not the individual call-off, that determines which threshold values (terskelverdier in Norwegian) apply, and therefore where the agreement is advertised.

As we see it, the real value lies in predictability. You can plan staffing and purchasing, you build a relationship with the buyer, and you gain references that count in the next competition. At the same time, it is important to know that a framework agreement is usually not a purchase guarantee. The buyer does not normally commit to a specific volume, and on agreements with several suppliers it is the call-offs that decide who actually earns revenue.

Check the estimated and maximum value

Following the Court of Justice of the EU's judgment in Simonsen & Weel (C-23/20, 2021), the buyer must state both the estimated and the maximum quantity or value of the framework agreement in the contract notice or the tender documents. This applies throughout the EEA. Once the maximum is reached, the agreement is used up, and the buyer cannot continue to purchase under it without a new competition.

For you as a supplier, this is useful in two ways. The estimate tells you how much revenue it is realistic to expect. The maximum tells you how large the contract could become, and whether you have the capacity for it. If the figures are missing, it may be wise to ask a question during the competition before the deadline.

Where many stumble

They win the place and relax. On agreements with several suppliers, the place guarantees nothing. The revenue is won in the mini-competitions, one at a time.
They treat mini-competitions as formalities. The others on the agreement are qualified competitors who have already won one competition. Careless answers lose to well-prepared ones, here too.
They do not read the call-off mechanism. An allocation key and a mini-competition make for completely different day-to-day work. Which one applies is stated in the tender documents.
They spot the call for tenders too late. Only the suppliers that are party to the framework agreement can be awarded contracts under it (in Norway, the anskaffelsesforskriften § 26-1(3)). New suppliers cannot join along the way, so the market can in practice be closed for up to four years.

How to position yourself

Map the framework agreements in your field: who holds them today, and when do they expire? The expiry date tells you when the next competition is likely to come, and gives you time to prepare. Remember that it is the framework agreement itself you need to catch. In Norway, the buyer has no obligation to advertise the call-offs under it (anskaffelsesforskriften § 21-6(2)), so you will not see them on Doffin, Norway's national public procurement database. Set up tender alerts (anbudsvarsling) so new calls for tenders do not slip through. And if you already have a place on an agreement: treat every mini-competition as a full tender, with the same care.

In brief

Framework agreements are long-term tickets into the public sector: terms are agreed once, purchases come through call-offs, and on agreements with several suppliers revenue is decided in the mini-competitions. Keep an eye on the expiry dates, because that is where the big opportunities lie.

This article reflects Cobrief's assessment and is not legal advice. Please consult an adviser if you are unsure how the rules apply in your situation.

We at Cobrief are always happy to have a chat about how to catch the framework agreements in your market before your competitors do.