Scottish Government issues latest Procurement Policy Note on Speculative Framework Agreements

In July the Scottish Government published a Scottish Procurement Policy Note,SPPN 3/2017, on Speculative Framework Agreements.

In the SPPN, the Scottish Government advises Scottish public bodies subject to public procurement legislation on the risks associated with acting as the lead contracting authority for a “speculative framework agreement”.

SPPN 3/2017 in Summary

The key points in the SPPN are as follows:

• It has become more common for private organisations to claim they have compliant frameworks from which public bodies can buy. Contracting authorities should exercise caution when using these so called “speculative framework agreements”, and before doing so should consider the following questions:

1. Were they precisely defined and identified as a user in the OJEU Contract Notice advertising the framework?
2. Is the overall value of the framework transparent?
3. Was the framework awarded legally and can the lead contracting authority oversee the procurement and management of the framework? and
4. Does the framework offer value for money?

• Public bodies named as lead contracting authorities for framework agreements are effectively legally responsible for full compliance with procurement legislation, during the procurement process and throughout the term of the framework agreement.
• Public bodies may be approached by a private organisation to act as the lead contracting authority for a framework agreement, as a “flag of convenience” contracting authority. Before doing so, it is recommended that they consider the risks and legal implications and their own capacity and capability to do so.

What are “Speculative Framework Agreements” and “Flag of Convenience Contracting Authorities”?

"Speculative framework agreements” are described in the SPPN as being frameworks that have been awarded with no prior consultation with Scottish contracting authorities, but are advertised as being “legally-compliant”.

A “flag of convenience” contracting authority is the term the Scottish Government uses to describe a public body who has been invited to act as the named lead local authority by a commercial organisation wishing to award a framework agreement.

A Reminder on Legally Compliant Framework Agreements

The SPPN sets out a useful reminder for contracting authorities on what they should look out for in a published Contract Notice when considering purchasing from a framework agreement, in order to get comfortable that the framework agreement is suitable for their needs, provides value for money and can be relied on to award a contract that would otherwise have been advertised.

The Scottish Procurement Policy Notes are published here by the Scottish Government on an ad hoc basis to provide advice on current policy issues.

Please get in contact with Graeme Young if you would like more information.