In the frame: how to procure a valid framework
A recent judgment of the European Court of Justice (ECJ) confirms the principles for establishing framework agreements that are to be available for use by both the contracting authority (CA) establishing the framework and other CAs identified as users of the framework, and highlights some of the practical implications of these requirements.
According to the judgment:
- a CA may establish a framework agreement for its own benefit and that of other CAs provided it complies with the principles of transparency by advertising appropriately;
- while successful bidders must be original parties to the framework, additional CAs are not required to be signatories, but must be clearly identified in the tender documents as eligible users of the framework;
- the CA establishing the framework must, at the outset, determine the total estimated maximum value of the subsequent contracts (call-offs) envisaged for the entire duration of the framework agreement; failure to do so may breach transparency and equal treatment; and
- it is not acceptable to determine the value of the subsequent contracts by reference to a CA's "usual requirements".
Although the judgment confirms the established position in relation to identifying additional CA users of frameworks, it is a useful reminder of the applicable principles and the following practical considerations:
- CAs establishing frameworks should identify clearly and transparently all permitted users of the framework agreement at the outset, in the OJEU advertisement; although this principle is not new and is consistent with previous European Commission guidance on the point, it is not always observed in practice and additional CAs have sometimes attempted to join frameworks during their term or use frameworks in which they were not sufficiently well identified as a permitted user;
- CAs establishing a framework agreement should be prepared to consult with the further CAs who are to be identified as users of the framework to ensure that the total framework value specified is realistic;
- CAs wishing to benefit from access to a framework should be prepared to provide an estimate of the likely total value of their requirements in a form that is meaningful for all potential bidders; and
- CAs establishing frameworks should actively track the value of call-offs to ensure that the combined value of all call-offs does not exceed the total estimated maximum value of the framework agreement, as determined at the outset of the procurement.
Frameworks exceeding four years
There is some comfort for CAs who have concluded a framework agreement of more than the maximum duration of four years permitted under the procurement rules (without providing a justification for exceeding this limit). The ECJ has indicated that the courts may accept that such an agreement constitutes a validly procured framework agreement for the first four years of its term (and expires at the end of that period).
If you would like to discuss these or any other procurement issues please contact one of the team.