Framework Agreement
A framework agreement establishes the terms and conditions under which specific purchases can be made during a given period. It is widely used in Finnish public procurement to streamline recurring purchases. Framework agreements can be concluded with one or several economic operators.
Definition
A framework agreement is an agreement between one or more contracting authorities and one or more economic operators that establishes the terms governing contracts to be awarded during a given period, particularly regarding price and quantities. When concluded with a single supplier, orders are placed directly under the agreed terms. When concluded with multiple suppliers, contracts are awarded either by applying the terms of the framework or by conducting a mini-competition among the framework suppliers. The maximum duration is generally four years. It is regulated by Sections 42-44 of the Public Procurement Act (1397/2016).
Practical Example
Hansel, Finland's central purchasing body, establishes a framework agreement for office supplies with five suppliers. Government agencies can then order supplies directly from these suppliers using mini-competitions or fixed terms, without running their own procurement processes.
Common Mistake
Suppliers sometimes believe that winning a place on a framework agreement guarantees orders. In a multi-supplier framework, orders may be distributed through mini-competitions, and there is no guarantee of any minimum volume.
Frequently Asked Questions
What is the maximum duration of a framework agreement?
Framework agreements generally have a maximum duration of four years, including options. A longer duration may be justified in exceptional cases where the subject matter requires a longer commitment, but this must be properly justified.
What is a mini-competition within a framework agreement?
A mini-competition is a simplified competitive process conducted among the suppliers within a multi-supplier framework agreement. The contracting authority invites all framework suppliers to submit offers based on the framework terms, and selects the best offer according to the criteria set in the framework.
Can new suppliers join an existing framework agreement?
No. Once a framework agreement is concluded, new suppliers cannot be added. All suppliers must be selected through the original procurement procedure. This is a key difference from a dynamic purchasing system.
Related Terms
Open Procedure
Learn how the open procedure works in Finnish public procurement. Any supplier can submit a tender without pre-qualification under hankintalaki 1397/2016.
Dynamic Purchasing System
Learn about the dynamic purchasing system (DPS) in Finnish public procurement. An open system where new suppliers can join throughout its duration.
Contract Period
Learn about contract periods in Finnish public procurement. How sopimuskausi duration, options, and extensions work under procurement law.
Hansel
Learn about Hansel Ltd, Finland's central purchasing body for government procurement. How joint procurement and framework agreements work.
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