Framework agreement

In the context of procurement, a framework agreement is an agreement between one or more businesses or organisations, "the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged".

[2] A number of international accords are characterized as framework agreements: Non-international framework agreements include: Businesses, especially public contracting authorities, may enter into framework agreements with one or more suppliers, which prescribe the terms and conditions which would apply to any subsequent contract and make provision for selection and appointment of a contractor by reference directly to the agreed terms and conditions or by holding a competition inviting only the partners to the framework agreement to submit specific commercial proposals.

[5] In the public sector, a number of Central Purchasing Bodies exist whose purposes include the creation and management of framework agreements which are compliant with EU Procurement Directives [6] and available for use by designated public bodies.

[10] For a more complete list, see List of central purchasing bodies in the United Kingdom The Chartered Institute of Procurement & Supply makes a distinction between a "framework contract" and a "framework agreement".

Under a framework contract, some form of consideration is paid "up front" to secure the commitment of the supplier to the agreed terms and conditions.