Under most construction contracts, the contractor takes on the ground conditions risk. However, a recent case has demonstrated that the risk can fall on the employer.
However, the EU procurement rules on frameworks have not been particularly well understood, even by those who are responsible for setting up and managing frameworks. There is also considerable legal uncertainty over what those rules actually say.
In an attempt to bring some clarity to this area of law and procurement practice, the Procurement Lawyers Association has just issued a briefing paper on framework agreements. This paper is free to download from the PLA website.
Some of the themes explored in the paper are:
- the definition of what is a framework agreement and what distinguishes it from a public contract (including an analysis of the risk of some term contracts being regarded as framework agreements);
- the requirement to identify potential purchasers when a framework agreement is being set up and how this applies to a number of practical situations;
- the maximum permitted duration of contracts called-off under framework agreements;
- permitted call-off arrangements under both single-supplier and multiple-supplier framework agreements, including the extent to which "direct award" and "mini competition" call-off procedures can be used within the same framework agreement;
- whether the pricing mechanism for the called-off contracts has to be established through the framework agreement itself, or whether it can be left to a mini-competition (on which the working group was divided, so both alternative arguments are included in the paper);
- abuses of framework agreements and the "improper use" rule; and
- remedies for breach of the EU procurement rules on framework agreements including the risk of a contract that has been improperly called-off under a framework agreements being set aside for "ineffectiveness".
For more information
Andrew Millross was a member of the PLA working party that produced the guidance. If you would like to discuss any of the guidance with Andrew, or would like advice on setting up or using framework agreements, he and his team can be contacted on 0121 212 7473 or email@example.com.
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