Not everything should be decided in a framework agreement with only one supplier

In a case of a framework agreement with only one supplier, the terms laid down in the framework agreement itself determine the award of contracts.
Not everything should be decided in a framework agreement with only one supplier

 

In a case of a framework agreement with only one supplier, the terms laid down in the framework agreement itself determine the award of contracts. Everything does not have to be determined, but it should be defined in the framework agreement. An IT procurement was the subject of a complaint in Sweden. The Court of Appeal ruled that the terms of the framework agreement may to some extent be open, for example in regard to price, if supplements are needed when the call of order is forthcoming.


The initiation was an IT procurement, which included storage, service, and support. An open tender competition was conducted, and the intention was to make a framework agreement with a supplier. A complaint was made when one of the tenderers was not awarded the contract. The main plea for the complaint was that the chosen supplier had not set a price for support, even though support was included in the purchase. The complainant claimed that the framework agreement did not meet the terms of framework agreements with a supplier, as all terms were not stipulated.

The first instance, when the administrative authority gave the client consent, the complainant went on to the Court of Appeal (Kammarrätten i Sundsvall, case no. 2237-17).

 

An economic operator

The Court of Appeal claimed that if a framework agreement is concluded with only one economic operator, contracts based on this agreement shall be conducted in accordance with the terms of the agreement. The call of order must apply to the goods and services covered by the framework agreement.

In some cases, terms of the framework agreement will be open. The Court of Appeal specifies that, for example regarding price, the framework agreement can be open if supplements are needed when the call of order will occurr. Furthermore, the call of order must be kept within the scope of possible adjustments that should be defined through the terms of the agreement. The terms of the call of order must not deviate from the terms of the agreement.

 

No special provisions

If there is only one supplier as a counterparty, there are no specific provisions on how the choice of supplier or tender shall occur. The contracts are awarded according to the terms of the framework agreement.

The Court of Appeal concluded that most of the terms in the framework agreement were determined in regard to agreements with only one supplier. Regarding the procurement (products and/or services) or the terms of price and call termination does not come forth as apparent, and therefore may entail a risk of an arbitrary award of a contract.  The court concludes that there is a risk that the competition regarding the framework agreement will be eliminated.

 

Convert the procurement

In regard to inadequate tender specifications, the fact that suppliers could have delivered more favorable offers if the deficiencies had not been there, cannot be excluded. Damage or risk of injury may have been present, according to the court, thus the procurement should be re-established.

This article first appeared at Anbud365, Norway’s leading online newspaper for public procurement. Published by Lennart Hovland on August 20th 2018. The full article can be found in Norwegian here.

 

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