Framework agreements and dynamic purchasing systems explained

A large share of public spending doesn't go through one-off tenders but through framework agreements: long-term arrangements under which buyers place many smaller orders. If you miss the framework, you can be locked out of a buyer's spending for years. If you win a place, one procedure can lead to dozens of contracts. This guide explains how frameworks and dynamic purchasing systems work, and how to approach them as a small or mid-sized company.

What is a framework agreement?#

A framework agreement is an agreement between one or more buyers and one or more suppliers that sets the terms for contracts to be awarded during a given period, in particular prices and quantities envisaged (Article 33 of Directive 2014/24/EU). It is awarded through a normal procedure, usually open or restricted, with selection and award criteria like any other tender.

Orders placed under the framework are called call-offs (or specific contracts). They cannot substantially change the framework's terms.

How long can a framework last?#

Public sector (2014/24/EU, Art. 33)

at most 4 years, except in duly justified cases

Utilities (2014/25/EU, Art. 51)

at most 8 years, except in duly justified cases

Call-offs

can run beyond the framework's end if awarded during its term, within national rules

Award notice

within 30 days of concluding the framework; call-off notices may be grouped quarterly

Single-supplier or multi-supplier?#

Single-supplier frameworks#

One supplier is appointed. Call-offs follow the framework terms, and the buyer may ask the supplier in writing to supplement its tender where needed.

Multi-supplier frameworks#

Several suppliers are appointed, sometimes per lot. Call-offs are awarded in one of three ways (Article 33(4)):

1. Direct award without reopening competition: when the framework fixes all terms and the objective conditions for choosing the supplier, such as a ranking ("cascade") or rotation.

2. Mixed: the framework fixes all terms, and the buyer decides per order, on objective criteria, whether to award directly or run a mini-competition.

3. Mini-competition: when not all terms are fixed, competition is reopened among the framework suppliers able to perform the order.

How does a mini-competition work?#

In a mini-competition (also called reopening competition or further competition) the buyer:

1. 1

   Consults in writing

   the framework suppliers capable of performing the order.

2. 2

   Sets a deadline

   long enough for the complexity of the order.

3. 3

   Keeps tenders confidential

   until the deadline.

4. 4

   Awards the call-off

   to the best tender under the award criteria set out in the framework documents.

Mini-competitions are short and frequent. Suppliers that respond quickly with a tailored offer win most of them.

Example: a small IT firm on a regional framework#

A regional purchasing body tenders a four-year framework for software development services, in three lots, with up to six suppliers per lot. A 15-person IT firm bids for lot 2 (web services) only, where its references are strongest, and wins a place ranked fourth.

Over the next four years the region and its municipalities run mini-competitions under lot 2. The firm wins several of them, each smaller than a standalone EU tender but with less competition, because only the six framework suppliers can bid.

The lesson: target the lot that fits you, and treat winning the framework as the start of the sales effort, not the end.

Who runs frameworks?#

• Individual buyers for their own recurring needs.

• Central purchasing bodies that run frameworks used by many public organisations, for example Hansel in Finland, Consip in Italy and UGAP in France. Their frameworks can be large and nationwide.

• Joint procurement by several buyers, sometimes across borders.

Central purchasing frameworks often have high selection requirements. Lots, regional splits and consortia make them accessible to SMEs.

What is a dynamic purchasing system (DPS)?#

A DPS is a fully electronic process for commonly used purchases, open throughout its validity (Article 34 of Directive 2014/24/EU). It follows the rules of the restricted procedure:

• Anyone can join at any time during its life if they meet the selection criteria. The number of participants is not limited.

• Requests to participate: at least 30 days in the initial setup.

• Each specific contract is awarded through an invitation to all admitted participants (or those in the relevant category), with at least 10 days to tender.

• No fees may be charged to companies interested in or taking part in the DPS.

If you missed the start, a DPS is still open to you. That makes it very different from a framework.

Framework or DPS: which is better for an SME?#

How to win a place on a framework#

• Read the call-off mechanism before bidding. A ranked cascade rewards the top place; a mini-competition rewards flexibility.

• Check the maximum value and expected volume. The notice often states a maximum value for the whole term, but the actual volume may be much lower and is usually not guaranteed.

• Price for the whole term. Check whether price indexation is allowed; otherwise inflation eats your margin over four years.

• Bid for the lots you can serve well instead of all of them.

• Plan capacity: some frameworks penalise suppliers that decline call-offs.

Why frameworks matter for finding tenders#

Call-offs under frameworks rarely appear as separate public notices. If you only watch new contract notices, you see the framework once and then nothing for four years. Instead:

• watch for framework notices in your field and note their end dates;

• follow the buyers and central purchasing bodies that use them;

• prepare for the re-tender before the framework ends.