A framework agreement is not a standard public contract. It is an agreement that establishes the terms for future contracts, without the authority committing to a specific volume. For the tenderer this means: you do not win once, you must keep winning — with every call-off or mini-competition.
In this article we explain how framework agreements are structured, which call-off mechanisms exist, and how to position yourself for both the initial award and the subsequent contracts.
What is a framework agreement?
Article 33 of Directive 2014/24/EU defines a framework agreement as an agreement between one or more contracting authorities and one or more economic operators. The purpose is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, quantity.
The Belgian Act of 17 June 2016 adopts this definition. The framework agreement itself is not a contract — the individual call-offs (purchase orders, sub-contracts) are.
Single operator or multiple operators
A framework agreement can be concluded with one operator or with several operators. This choice has fundamental consequences for how subsequent contracts are awarded.
Framework agreement with a single operator
All contracts are awarded directly to that operator in accordance with the terms of the framework agreement. The authority may request the operator to supplement its tender for specific needs, but the core conditions (prices, service levels) are fixed.
This is the simplest model. You win the framework agreement and then receive all contracts. The disadvantage: there is no competition after the award, giving the authority less flexibility.
Framework agreement with multiple operators
The framework agreement is concluded with two or more operators. Subsequent contracts are awarded via one of the following mechanisms.
Call-off mechanisms
Direct call-off
If all terms are fully established in the framework agreement, the authority can award contracts directly to an operator without reopening competition. This works in practice as a cascade mechanism: the authority approaches the operator with the best conditions first and only moves to the next if the first cannot deliver.
Condition: the framework agreement must contain the objective criteria on the basis of which the choice is made. There must be no room for negotiation.
Mini-competition (reopening of competition)
If not all terms are fully established, or if the authority wishes to maintain competition, it organises a mini-competition for each specific contract. All participants in the framework agreement are invited to submit a tender for that specific need.
The mini-competition is the most common call-off mechanism for framework agreements with multiple operators. The award criteria are the same as those of the original framework agreement, but may be refined for the specific contract.
Key points for mini-competitions:
- All participants are invited. The authority may not exclude participants.
- The time limit for submitting tenders is set according to complexity, but is shorter than for a full procedure.
- Assessment follows the criteria from the framework agreement.
- As a participant you must be able to respond quickly — mini-competitions typically have short turnaround times.
Combination
The framework agreement may provide that some contracts are awarded directly and others via mini-competition. This depends on whether the conditions for a specific type of contract are already fully established.
Duration
The maximum duration of a framework agreement is four years, unless exceptional circumstances justify a longer duration. That exception must be motivated — for example when participants need to make investments with a longer depreciation period.
Note: individual contracts awarded under the framework agreement do not need to coincide with the duration of the framework agreement. A contract can be awarded on the last day of the framework agreement and then have its own execution period.
For the special sectors (Directive 2014/25/EU) a broader maximum duration of eight years applies.
Implications for your bid strategy
Phase 1: winning the framework agreement
Without selection for the framework agreement, there is no access to subsequent contracts. Therefore invest substantially in the initial submission.
Price strategically. Your pricing in the framework agreement applies for the entire duration. Be realistic: prices that are too low to win the framework lead to loss-making execution. Prices that are too high exclude you from mini-competitions.
References and capability. Demonstrate that you have the capacity to deliver for four years. Authorities look for reliability and scalability, not just the lowest price.
Read the call-off conditions. Understand which mechanism the authority will use. If it will be mini-competitions, your organisation must be able to produce tenders quickly and repeatedly.
Phase 2: winning mini-competitions
Being on the framework agreement is no guarantee of revenue. In mini-competitions you must compete each time.
Organise your response process. Mini-competitions have short turnaround times. Ensure you have a streamlined process: who receives the invitation, who prepares the tender, who signs off?
Differentiate on service. In mini-competitions, pricing is often close (the participants were after all selected on the same framework). The difference lies in delivery time, availability, quality of the project team, or specific added value for the particular contract.
Monitor actively. Not every mini-competition is equally worthwhile. Assess per mini-competition whether the volume, complexity and margin are worth the effort. A framework agreement with twenty mini-competitions per year requires a selective response policy.
Common mistakes
No purchase obligation. A framework agreement does not guarantee a minimum volume. The authority is not obliged to purchase from the participants. If the budget changes or the need disappears, the uptake can be zero.
Exceeding the maximum value. The framework agreement has an estimated maximum value. Once reached, the authority must in principle start a new procedure. For long-running framework agreements, check whether the maximum value is not being exceeded.
Membership is fixed. New operators cannot join a running framework agreement. The participant field is fixed for the entire duration.