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A new study finds that the value of government contracts awarded to the private sector through pre-approved shortlists without full competition has tripled in the past four years, raising concerns about transparency.
Figures from government procurement data provider Tassel show that more than £35 billion of contracts will be awarded to the private sector through “framework agreements” in 2023, up from £10 billion in 2019.
A framework is a contract made with a list of pre-approved suppliers, where certain terms and legal protections are agreed in advance and work can be awarded either directly or through a smaller competition between the listed bidders.
These contracts are designed to speed up procurement for public agencies, but experts say their use reduces transparency because there is no public notice for bidding.
Gas Tugendhat debtThe Tassel founder said the framework's use has helped governments speed up procurement.
But it added that concerns had been raised because tenders were “only publicised to a closed group of suppliers already in the framework and subsequent awards of contracts are not publicised as consistently as those awarded in open competitions”.
The Cabinet Office pointed to new procurement legislation that came into force in October this year and replaces European Union law. It said the legislation would call for greater transparency and mandate the setting up of a new online contract register to reduce duplication.
But Stephen Brunning, a procurement lawyer at Anthony Collins and a member of the Public Procurement Research Group at the University of Nottingham, said it was “not clear that the reforms will solve the problem of multiple overlapping general frameworks which are overused and often misused.”
The UK's largest framework provider is the Crown Commercial Service, the executive body of the Cabinet Office that operates within central government and sets public procurement policy.
According to Tassel, around £22.5 billion of framework agreements have been signed through CCS for 2023.
But NHS trusts and local authorities also use this type of contract, and it can cover a range of services from construction to feeding and equipping hospitals, to running prisons and immigration detention centres.
Martin McTeigue, national chairman of the Federation of Small Businesses, said the introduction of such agreements was making it harder for small businesses to win work. “Framework agreements usually prohibit competition from those who don't apply to be on board in the first place,” he said.
“Large companies can participate relatively easily in any framework, but small and medium-sized companies that don't have their own pool of bidders are effectively unable to compete for contracts,” he added.
A report from the National Audit Office last year flagged concerns about the use of frameworks, saying “frameworks are not necessarily the best way to achieve competition” and could lead to price inflates.
According to the NAO, suppliers warned that “high tender costs, lack of confidence in the assessment and lack of feedback may deter them from bidding”.
