The Public Procurement And Disposal of Public Assets Guidelines, 2011
The Public Procurement
and
Disposal of Public Assets
Guidelines
Guidelines issued by the Public Procurement and Disposal of Public
Assets Authority under section 97 of the Public Procurement and
Disposal of Public Assets Act 2003, Act No. 1 of 2003 and Regulation 12
of the Local Government (Public Procurement and Disposal of Public
Assets) Regulations 2006
Details covered in this guideline:
Guideline Subject:
Guidance on Use of Framework Contracts
for procurement of supplies and services
Guideline Reference:
1/2011
Guideline Issue Date:
19/07/2011
Total number of pages
8
Guidelines are distributed to all Accounting Officers who are responsible for distributing
copies of these Guidelines to at least the Chairpersons of the Contracts Committee and the
Head of the Procurement and Disposal Unit of the Procuring and Disposing Entity.
Guideline Reference: 1/2011
Guideline Date: 19/07/2011
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The Public Procurement And Disposal of Public Assets Guidelines, 2011
Guideline Subject:
Guidance on Use of Framework Contracts
Under PPDA Regulation 237 of the PPDA Regulations, 2003 and Regulation 94 of the LG
(PPDA) Regulations 2006, Procuring and Disposing Entities are required to use Frame Work
Contracts where requirements are needed repeatedly at an agreed price over a period of time but
where the quantity and timing of the requirements cannot be defined in advance. The guidance on
how to use Frame Work Contracts by PDEs is detailed below:
1.0 What is a Framework Contract and when should it be used?
1.1 A Framework Contract is a contractual arrangement for an estimated quantity or minimum
value of supplies or services at fixed unit prices over a certain period of time, where actual
quantities are purchased by means of individual call-off orders and payment is made for the
actual quantities or services delivered. A “Call-Off Order” means an order/individual
contract issued by the Procuring and Disposing Entity for the purchase of specified
quantities of the supplies or services under a framework contract.
1.2 A framework contract provides an efficient, cost effective and flexible way of procuring
supplies or services that are needed continuously or repeatedly over a period of time by
reducing procurement costs and time. Typical examples include common user items such as
office stationery, tonner, tyres, spare parts for routine vehicle repairs, medical supplies,
foodstuffs, road materials, bitumen, aggregates, cement, courier services e.t.c.
1.3 A framework contract also provides a means of having supplies or services “on call”, where
they might be needed urgently, but where the quantity and timing cannot be defined in
advance. For example, malaria drugs might be needed to deal with a sudden outbreak of the
disease, but the size and timing of any outbreak cannot be known in advance. The existence
of a framework contract allows a Procuring and Disposing Entity in such a case to respond
quickly to the emergency, without resorting to direct procurement, which is likely to result in
higher prices, caused by lack of competition.
1.4 Framework contracts should not be used for supplies or services which are required
occasionally, or which could be purchased by a single lump sum contract. Where the quantity
of supplies or services and the times they are needed is well defined in advance, a lump sum
contract should be used since it is more appropriate.
2.0 Features of Framework Contracts:
2.1 Fixed unit prices are defined in framework contracts which cover a certain period of time.
2.2
The general service area for delivery is defined but the precise location, quantity and timing
are not specified.
Guideline Reference: 1/2011
Guideline Date: 19/07/2011
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The Public Procurement And Disposal of Public Assets Guidelines, 2011
2.3
Contracts are activated by use of call-off orders which specify requirements and payments
are made against each individual call-off order.
2.4
Contracts may also be in place with a number of providers who are invited to submit bids or
proposals for specific requirements.
2.5
The contractual arrangement provides an efficient, cost effective and flexible way of
procuring services or supplies that are needed continuously or repeatedly over a period of
time.
2.6 The contractual arrangement reduces procurement costs and time.
3.0 Benefits of Using Framework Contracts:
3.1
Reduced time and resources spent on procurement, as the Procuring and Disposing Entity
only has to conduct a single bidding process and place a single contract to be able to order
supplies or services whenever they are needed, rather than conducting a separate
procurement process each time.
3.2
Bidders’ time and effort in preparing bids or quotations is reduced. A greater number of
bidders are interested in the contract since a single bid results in guaranteed business for a
longer period of time.
3.3
Lower prices are obtained since by aggregating requirements, a larger contract is offered,
which is more attractive to providers, resulting in more competitively priced bids.
3.4
The lead time for delivering supplies or services is reduced since there is no need for a
procurement process for each order. Minimum response times for delivering the supplies or
services may be included in the contract.
3.5
Procuring and Disposing Entities retain the benefits of competition, even where supplies or
services are needed in an emergency situation.
3.6
The Procuring and Disposing Entity obtains benefits of scale without incurring the costs of
holding stock or paying for a large volume of supplies or services up-front.
3.7
Call-off orders are placed and commitments made in accordance with the funds available.
3.8
Once a framework contract is in place, the completion of call-off orders is a quick and
simple process.
Guideline Reference: 1/2011
Guideline Date: 19/07/2011
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The Public Procurement And Disposal of Public Assets Guidelines, 2011
4.0 Potential Usage of Framework Contracts by Procuring and Disposing
Entities: (Items adopted from PPDA’s List of Common User Items)
4.1
Supplies:
 Agricultural tools
 Cleaning materials
 Computers and Accessories
 Printers and Consumables
 Essential Drugs
 Electrical Equipment
 Fire Fighting Equipment
 Foodstuff
 Tyres, Tubes, Fuel, Lubricants and Batteries
 Office Furniture
 Office Tools and Utensils
 Office Stationery
 Pipes and Fittings
 Uniforms
 Spare parts for routine vehicle repairs
 Street furniture, traffic signs, street lights
4.2
Services
 Photocopying and Secretarial Services
 Advertising and Media Services
 Courier Services
 Engraving Services
 Events Management
 Hotel Services
 Insurance Services
 Office Cleaning Services
 Security Services
 Clearing and Forwarding
 Air Transport
 Printing, Art and Design
 Architectural and Surveying
 Fumigation Services
 Motor Vehicle Hire
 Servicing Air Conditioning
 Site Investigations
 Specialist Information Technology Services
 Specialist Legal Advice
 Specialist Technical Advice
4.3 Any services or supplies that can be quantified.
Guideline Reference: 1/2011
Guideline Date: 19/07/2011
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The Public Procurement And Disposal of Public Assets Guidelines, 2011
5
Key Issues to note When Using Framework Contracts
5.1
Frequency or Probability: How frequently are the supplies or services required? If they
are only needed occasionally, a framework contract may not be appropriate. If supplies or
services are required on-call for an emergency situation, the probability of requiring the supplies
or services at all should be considered. The starting and completion dates should be included
where relevant. The length of call-offs, as with other contracts, should be appropriate to the
supplies or services in question and should reflect value for money considerations.
5.2
Definition: How well can the supplies or services required be defined? If only a general
type of supplies or services, rather than the actual supplies or services required is known, a prequalification or registration exercise, which allows bidders to be shortlisted for a limited
competition when required, may be more appropriate.
5.3
Exclusivity: Is the Procuring and Disposing Entity going to make an exclusive
arrangement with a single provider, which guarantees all orders for a certain type of supplies or
services to that provider? This should result in more competitive prices and reduced procurement
time and costs, but may prove to be inflexible and favour larger providers.
5.4
Estimates: How accurately can the Procuring and Disposing Entity estimate its total
requirements? The key to obtaining the benefits of framework contracts is the ability to make
reasonably accurate estimates. The Entity should use its approved budget as an indicative guide
in determining the estimates. The Entity shall conduct a market survey to get estimated unit cost
for the supplies or services to be procured.
5.5
Minimum Values: Is the Procuring and Disposing Entity going to guarantee a minimum
value of orders? Any guarantee, gives the Entity a commitment which it must meet. However, not
guaranteeing any minimum may result in fewer bids or less competitive prices. It should be
possible to establish the scope and types of supplies or services that need to be called off.
Upgrading the product is permitted so long as it remains within the scope of the original
specifications.
5.6
Price Variation: The terms governing the contracts to be awarded during a given period
in particular with regard to price and quantity should be established. There should be no scope for
substantive amendments through negotiation, to the terms established by the framework
agreement itself. The framework should be capable of establishing a pricing mechanism to be
applied to pricing particular requirements during the period of the framework. However, for items
that are subject to constant price fluctuations e.g. fuel, a price adjustment provision/escalation
clause may be included in the contract to cater for market forces. However, the price adjustment
applies only to contracts that shall remain in force for over eighteen months.
Guideline Reference: 1/2011
Guideline Date: 19/07/2011
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The Public Procurement And Disposal of Public Assets Guidelines, 2011
5.7
Multiple Providers & Differing Prices:
Framework agreements can be concluded with a single provider or with several providers, for the
same supplies or services. In the latter case, there must be at least three providers, provided that
there are sufficient providers satisfying the selection criteria and who have submitted compliant
bids meeting the award criteria. The agreement will establish the terms which will apply under
the framework, including delivery timescales and daily or hourly rates.
6. How to use Framework Contracts
6.1 Procuring and Disposing Entities should use PPDA’s Standard Bidding Document for
Framework contracts and use the open bidding method for the procurement of
supplies or services and then enter into framework contracts with the successful
providers.
6.2 The advert for the procurement of these supplies or services should clearly indicate
that the Entity intends to enter into framework contracts with the successful providers.
The advert should state that bids that are being invited are for an estimated quantity of
supplies or services under the framework contracting arrangement.
6.3
6.4 At the award stage, the providers to be included in the framework agreements should
be chosen by applying the award criteria, to establish the most economically
advantageous tender or tenders, in the normal way.
6.5 The Standard Bidding Document should clearly indicate the following:
i.
The quantities of the materials the Entity intends to buy.
ii.
The estimated unit costs. The estimated total bid price and price schedules should
be based on the estimated quantity of supplies or services
iii.
The duration of the frame work contract e.g. three months, six months, one year
e.t.c should be clearly indicated.
iv.
That payments shall be made against individual call-off orders.
v.
The evaluation methodology should include among others, acceptable response
times to call-off orders, delivery points, all cost components if required, a
qualification criterion related to the provider’s stock levels, where a certain level
of stock is likely to be required to meet call-off orders within the required
response times.
Guideline Reference: 1/2011
Guideline Date: 19/07/2011
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The Public Procurement And Disposal of Public Assets Guidelines, 2011
vi.
The Statement of Requirements should provide sufficient information to enable
bidders to efficiently and accurately prepare bids that are realistic and competitive
and to ensure that bids meet the Procuring and Disposing Entity’s needs.
vii.
A Procuring and Disposing Entity must ensure that any information added
contains words such as “estimated” or “approximately”, so that it does not commit
itself to a fixed order and delivery schedule.
viii.
An award of the contract shall not be made to purchase the supplies or services
specified in the Bidding Document, but that purchases shall be made through calloff orders.
ix.
The other documents forming part of the Contract are the call-off orders issued
under the Contract.
x.
A sample call-off order, which should be attached to the Agreement form, as an
example of the call-off orders to be placed under the framework contract
supported by a List of Supplies or services and Price Schedule.
xi.
Forms for the Framework Agreement, , and the Advance Payment Security, as in
all other Standard Bidding Documents.
xii.
The order page containing standard wording, instructing the Provider to deliver
the required Supplies or services and stating that the framework contract takes
precedence over the call-off order, in the event of any conflict.
xiii.
The call-off order must be signed by the authorised signatory, who is defined in
Special Conditions of Contract.
7
Management of Framework Contracts
7.1
Where a framework agreement is concluded with just one provider, call-offs under the
agreement should be awarded on the basis of the terms laid down in the agreement, refined
or supplemented by other terms in the framework agreement but not agreed at that time. It
is the same principle as that applying to a normal contract, except that, with a framework
agreement, there will be an interval between the awarding of the framework itself and the
calling-off of the supplies or services under it. There can be no substantive change to the
specification or the terms and conditions agreed at the time that the framework is awarded.
7.2 Where frameworks, for the same supplies or services, are awarded to several providers, there
are two possible options for awarding call-offs under the framework, namely:
Guideline Reference: 1/2011
Guideline Date: 19/07/2011
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The Public Procurement And Disposal of Public Assets Guidelines, 2011
i.
Where the terms laid down in the framework agreements are sufficiently precise to
cover the particular call-off, the Entity should award the call-off to the best
evaluated bidder. . Where the best evaluated bidder is not capable or interested in
providing the supplies or services in question, the Entity should turn to the next
best bidder. For example, frameworks might be concluded with five providers for
the delivery of individual photocopiers, fax machines and printers, separately
priced, and for delivery within set timescales. If the Entity simply wants to call-off
some photocopiers, it would go to the best evaluated bidder, using the original
award criteria, for that item alone without reopening the competition. If that
provider for any reason cannot supply the items required at that time, the Entity
would go to the next best evaluated bidder.
ii.
Where the terms laid down in the framework agreements are not precise enough or
complete for the particular call-off, a further or mini competition should be held
with all those providers within the framework capable of meeting the particular
need (should be invited in writing). This does not mean that basic terms can be
renegotiated, or that the specification used in setting up the framework can be
substantively changed. For example the unit price cannot be changed. Substantive
modifications to the terms set out in the framework agreement itself are not
permitted. It is more a matter of supplementing or refining the basic terms to
reflect particular circumstances for the individual call-off. Examples of such terms
are: particular delivery timescales;
 particular invoicing arrangements and payment profiles;
 additional security needs;
 incidental charges;
 particular associated services, e.g. installation, maintenance and
training;
 particular mixes of quality systems and rates;
 particular mixes of rates and quality;
 the unit price, where the terms include a price adjustment
mechanism;
 individual special terms (e.g. specific to the particular
products/services that will be provided to meet a particular
requirement under the framework).
The Entity should award the call-off to the provider who has submitted the best bid tender on the
basis of the award criteria set out in the framework itself focusing on the particular requirement.
Guideline Reference: 1/2011
Guideline Date: 19/07/2011
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