experience in adopting framework agreements

Experience in adopting framework agreements

Urbain BRUGGEMAN

Head of the Belgian Consultancy and Policy Office on Federal Public Procurement

EU Learning Lab 2006-11-10

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Summary

1. Introduction2. Questionnaire3. Reactions of the members4. Conclusions

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1. Introduction

• EU Directive 2004/18/EG of 31 March 2004

Framework Agreements (FA) possible for ‘classic public sector’

Many new possibilities for the public purchase services

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2. Questionnnaire• Questionnaire sent to all the

EU Learning Lab members

• Aims:

Collect information about application of FA

Share ‘good practices’

• Belgium leader of this project

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3. Reactions of the members• Completed questionnaire received

from:

– France– Ireland– Italy– Denmark– Cyprus– Hungary– Latvia– Sweden

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3. Reactions of the members

• Probable reason for not receiving any reaction of the other countries:

Directive not yet transposed in many EU countries (Belgium)

Too early for communicating experiences on FA

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3. Reactions of the members

• Cyprus:

Didn’t conclude yet FA for the 4 options

Intention to establish a working group with representatives of main

purchasers of the government sector

representatives of PPD

82. Reaction of the members

3.1. General Information

Country Institution Institution Governance Organization

FranceMinistère de l'économie, des finances et de l'Industrie ("Minéfi), Agence centrale des achats

Large Administration

Ireland Department of FinanceAuthority (National Public Procurement Policy Unit within the Department of Finance)

I taly Consip Central Purchasing Body

DenmarkStatens og Kommunernes Indkobs A/S (SKI)

Central Purchasing Body

CyprusPublic Procurement Directorate of the Treasury of the Republic

Authority

HungaryPublic Procurement Council (Közbeszerzések Tanàcsa)

Authority

Latvia Procurement Monitoring Bureau Authority

SwedenSwedish National Financial Management Authority

Central Purchasing Body

Belgium ABA Authority

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3.2. Options already adopted

Country Option 1 Option 2 Option 3 Option 4France x x xIreland x x

Italy xDenmark x x xCyprus

HungaryLatvia

Sweden x x x xBelgium

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3.3. Details about option 2

Country Products categories

France We do not implement this option

IrelandGuidelines have not been provided at this stage

Italy

DenmarkNo plans to establish agreements of this kind

CyprusHungary

LatviaSwedenBelgium

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3.4.1. Details about option 3 – Questions not answered

Not answered for option 3:

-Hungary-Cyprus-Latvia-Italy-Belgium

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3.4.2. Details about option 3 – Questions answered

Country 1. Product categories 2. Number of selected suppliersFrance Car fuel 3Ireland Photocopiers 5

>50 different framework agreements

Denmark>A broad spectrum of different products and services (computers, information technology peripherals, telecommunication, furniture, energy, office equipment, stationery, vehicles, hotel accommodation, air travel and food)

300 suppliers for 50 framework agreements

Sweden

Human resources for hire, translation and interpretation services, transportation of goods, domestic flight services

Usually 2 - 4

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Country3. The rationale adopted in choosing

the number of selected suppliers4. Duration of the FA

FranceThe main idea was to select three large networks of fuel stations so that the users always have a station nearby

18 months with an option for two one-year extensions

Ireland

Suppliers were sought for 6 black-and-white models and 1 colour model. The black-and-white models ranged from small desktop to large-volume models. One supplier was chosen for each lot, based on capital/copy charge costs of optional equipment supplied

Two years with an option to extend to a third year

Denmark

General rule: SKI chooses at least three suppliers per FA and typically between three and ten suppliers. Some types of FA result in up to 45 different suppliers

Between 24 and 48 months

SwedenNeeded capacity for buyer, supplier capacity, market structure, competition situation, type of goods/services

Usually 1 - 2 years with a one-year option

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Country5. The rationale adopted in choosing

the duration of the FA

6. Which selection criteria shall the Public Administration adopt in choosing one among

the selected suppliers

France

18 months is a practical minimum if you do not want to be permanently organizing tenders. Two more years possible if there are no major changes in the market

Geographic proximity

I reland

Photocopiers usually have a warranty of five years - there are products which do not become obsolete quickly, so it was important to set enough time to evaluate the operation of the suppliers and the market, in order to determine how to approach the market

For each lot, the supplier that scored best in the market scheme was chosen

Denmark

Market dynamics are very important as a rationale, as is - especially concerning information technology related products - obsolescence of the products or rather the need to include new technological breakthroughs

The public administrations choose the supplier who best meets their needs in an objective manner according to general rules of non-discrimination, etc…

SwedenType of goods/services, market structure, competition situation

The cascade method is a possible method but not the only one available or permitted according to the EU Commission. There may also arise situations where there is a need to deviate from the chosen method which is also permitted according to the Commission

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Country

7. How long, on average, are supply contracts between the single Public

Administration and the selected supplier?

FranceJust the few minutes needed to fill up the tanks

IrelandVaries according to requirements, usually two to three years for a common supply

DenmarkIt varies a lot but most often the supply contracts length is the same as the duration of the FA

Sweden Probably 2 years with one-year option

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3.4.4. Details about option 4 – Questions not answered

Not answered for option 4:

-Hungary-Cyprus-Latvia-Italy-Belgium-Ireland

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Country 1. Product categories 2. Number of selected suppliersFrance Paper for printers and PCs (3 lots) paper: 4; PCs: 3 for each lot

Denmark

In connection to a number of the 50 FA mentioned for option 3, the possibility of reopening competition for those public administrations that may need it, has been included

SKI currently has contracts with just over 300 suppliers with regard to the 50 FA

SwedenThe co-ordinated procurement system in the central government runs a large variety of FA about 90 product areas.

Varies but is usually from 3 - 8. For IT consultancy services we have as many as 50. This is due to the fact that these suppliers are often small firms with a limited capacity and they serve many different agencies with many different needs.

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Country3. Description of the rationale in choosing the number of suppliers

4. Duration of the FA

France

3 is the minimum number mandated by the procurement code. Above 4 it is hard to manage second stage competition

1. paper: 2 years plus one-year option; 2. PCs: three years

Denmark

General rule: SKI chooses at least three suppliers per FA and typically between three and ten suppliers. Some types of framework agreements - e.g. management consultancy - result in up to 45 different suppliers

Usually SKI 's FA last between 24 and 48 months

SwedenNeeded capacity for buyer, supplier capacity, market structure, competition situation, type of goods/services

Usually 2 years with a one-year option although this may vary

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Country5. Description of the rationale

adopted in choosing the duration of the FA

6.1. Can the Public Administration reopen the competition only among a restricted group of

suppliers selected in the FA? If so, which is the rationale behind this option?

France

Three years seems a good balance between the necessity to give regularly an opportunity to new suppliers and the complexities of tendering procedures

All the suppliers must be consulted in each competition

Denmark

Market dynamics are very important as a rationale, as is - especially concerning information technology related products - obsolescence of the products or rather the need to include new technological breakthroughs.

Yes. I f only a restrited group of the suppliers can meet their specific needs.

SwedenType of goods/services, market structure, competition situation

According to the provision in the directive art 32: a) you only have to ask the suppliers capable of performing the contract. This usually means asking all the suppliers but can also apply to a selected number of the suppliers to the FA

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Country6.2. How do you regulate the reopening of the competition?

6.3. Who reopens the competition? The Public Administration or the central purchasing body?

France There is a new competition every six months

The central body

Denmark

The conditions for reopening the competition are laid down in the contract that the suppliers agree to sign in connection to the FA. The conditions follow the rules laid down by the Directive 2004/18/EC.

The public administrations but assisted by SKI.

SwedenIt is usually regulated in the call for tender documents and in the contract for the FA.

The Public Administration

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Country6.4. Which are the renegotiating

terms?

7. How long, on average, are supply contracts between the single Public Administration and

the selected supplier?

France Prices only

The different units of the Minéfi just issue orders according to their needs. They do not have to sign a specific contract before ordering, but strictly speaking in law each order constitutes a separate contract.

DenmarkPotentially all of the mentioned but focus is usually on the price.

I t varies a lot but most often the supply contracts length is the same as the duration of the FA.

SwedenThey can vary. Price is probably the most frequently used criterion followed by delivery time, associated services.

We have no idea. Most probably they are used for single purchases at different times.

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Only Sweden applies the following system:

-Central Purchasing body selects more than one offer in the first stage of the procedure-The customers of the CPB the selected firms,receive the definitive offer of the selected firms,evaluate the offers and award the contract.

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3.4.5. Details about the case – Questions not answered

The following countries did not give an answer for thequestions mentioned on the questionnaire for the case:

-Hungary-Cyprus-Italy-Belgium

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3.4.5. Details about the case – Questions answered

Country 1 Product category 2 Number of firms presented in the market

FranceSee complete presentation of the case seen during the Paris meeting in the Llab

See complete presentation of the case seen during the Paris meeting in the Llab

Denmark

SKI currently has around 50 different FA span a broad spectrum of different products and services. Examples are computers, information technology peripherals, telecommunication, furniture, energy, office equipment, stationery, vehicles, hotel accommodation

SKI curently has contracts with just over 300 suppliers with regard to the 50 FA

Sweden We have about 90 product areas Around 250 totally in the different product areas

Ireland Photocopiers 12 or 13

Latvia Supplies, paper

The answer depends on the definition of the market. Considering all those suppliers, who were potentially interested in supplying the pretty large amount of paper (of course not only from Latvia), the number could be pretty huge.

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Country 3. Number of firms submitting an offer4. Number of firms that awarded the FA and

rationale behind this choice



Denmark No answer

300 suppliers with regard to the 50 framework agreements. As a general rule SKI choooses at least three suppliers per FA and typically between three and ten suppliers. Some types of FA (e.g. management consultancy) result in up to 45 different suppliers.

Sweden No answer 3 - 8, sometimes moreIreland 10 Not clear on what this question means

Latvia 5First part (lot) of a subect of procurement - 4, second part - 2, third part - 2

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5 Duration of the FA and rationale behind this choice

6. How many times has the competition been reopened?



Usually SKI 's FA last between 24 and 48 months

No answer

Usually 2 years with one-year option although this may vary

We have no idea but it must be hundreds of times maybe even thousands of times

No answer No answer2 years (don't know for sure, but

probably the sense of such term is presumption that after 2 years a new agreement could be signed on more

advantageous conditions)

2

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Country7. Which is the duration of the specific

supply contract?


DenmarkIt varies a lot but most often the supply contracts length is the same as the duration of the FA

Sweden No answer

Ireland No answerLatvia No answer

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4. Conclusions

• A part of the EU Llab members already awarded FA

• The duration of the FA is adapted according to the advantage they can obtain from FA

• By choosing the products/services they evaluate the estimated added value of a FA

experience in adopting framework agreements

Documents

public purchase services

policy office

general information

eu learning lab membersaims

eu countries belgiumtoo

office equipment

services computers

memberscompleted questionnaire