Clarification on the use of framework contracts by the public sector
In the case of Copymoore Limited & Ors -v- The Commissioner of Public Works in Ireland [2013] IEHC 230 it was judged that Circular 06/12, which made National Procurement Service framework contracts mandatory across the public sector was ultra vires on the grounds that it effectively altered the terms of the tender that had been previously awarded (i.e. it never mentioned that the potential market would be increased by making all buyers by from the same supplier). The judgement hence made the use of framework agreements optional once more by public buyers.
The new Circular published on 28 September replaces Circular 06/12. It states that “public bodies should encourage and promote the use of central frameworks by the public bodies under their remit” because the benefits include “cash savings; administrative savings from reduced duplication of tendering; greater purchasing expertise; improved consistency; enhanced service levels and legal certainty”. Public sector buyers are “also reminded that it is Government policy that public bodies, where possible, should make use of all such central arrangements”. In order to ensure maximum take-up of the framework contracts, it states that “where public bodies do not utilise central procurement frameworks they should be in a position to provide a value for money justification”, which “should take into account the full costs of running a public procurement competition”.
Framework contracts are a strategic tool of the OGP and it was necessary for them to address the issues raised in the High Court judgement. Circular 16/13 clarifies the use of such arrangements, without necessarily making them mandatory. In terms of addressing the nature and scope of the advertised competition, the OGP and others conducting procurement competitions will have to be clear in the potential scope of the contract.
Friday, 18 October 2013