What is a Framework?
A framework is an agreement that sets terms for future purchases without requiring an immediate order. It allows buyers to pre-select suppliers and establish conditions like pricing, quality standards, and contract terms in advance. Instead of negotiating a new contract for every purchase, buyers can follow the framework’s terms whenever they need goods, services, or construction work.
Key features of a framework include:
- Pre-approved suppliers: Buyers select qualified suppliers before projects begin.
- Agreed terms: Prices, contract conditions, and performance standards are set in advance.
- No guaranteed work: Being part of a framework does not mean suppliers will get projects.
- Efficient procurement: Buyers avoid running a full bidding process for each purchase.
Frameworks help organizations simplify procurement, save time, and ensure consistency across multiple projects. They are widely used in industries like construction, healthcare, and government procurement.
Framework Agreement in Construction Meaning
A framework agreement in construction is a contract that allows buyers to work with pre-approved contractors under set terms. It does not commit to specific projects but provides a structured way to award work when needed. Buyers use these agreements to speed up procurement, control costs, and maintain quality across multiple projects.
Here are the key aspects of a framework agreement in construction:
- Pre-selected contractors: Buyers approve contractors based on experience, pricing, and compliance.
- Pre-set conditions: The agreement includes pricing, quality standards, and legal requirements.
- Flexible project allocation: Buyers award contracts when projects arise instead of committing upfront.
- Defined timeframe: Framework agreements typically last up to four years but vary by project.
These agreements are commonly used in large infrastructure projects, public sector contracts, and long-term developments. They help organizations maintain stable supplier relationships while ensuring cost-effective and efficient project delivery.
To learn more about different contract types, read our Construction Contracts guide.
Why Are Framework Agreements Used in Construction?
Framework agreements help buyers streamline procurement and suppliers secure long-term opportunities. They reduce the administrative burden of running full tenders for each project while ensuring competitive pricing and quality assurance.
The benefits of construction framework agreements are:
- Faster procurement: Buyers avoid lengthy bidding processes for every project.
- Cost efficiency: Pre-negotiated rates help control spending and reduce financial risks.
- Quality assurance: Contractors follow agreed standards, ensuring consistent project outcomes.
- Long-term collaboration: Buyers and suppliers develop strong, reliable partnerships.
Many governments, developers, and construction firms prefer framework agreements because they offer flexibility, efficiency, and financial predictability. They allow organizations to manage projects more effectively while maintaining compliance with procurement regulations.
How Does a Framework Agreement Work?
A framework agreement in construction does not guarantee any projects but provides a structured way to manage procurement efficiently. When a buyer needs a service or construction work, they choose a supplier from the framework instead of running a full bidding process. This speeds up procurement, reduces administrative costs, and ensures compliance with agreed standards.
- Buyer Establishes the Framework
- The buyer (government agency, developer, or company) defines the scope, pricing structure, and contract conditions.
- Suppliers submit bids to be included in the framework.
- Supplier Selection
- The buyer evaluates and approves contractors based on experience, financial stability, and compliance with legal requirements.
- Only suppliers who meet the criteria are added to the framework.
- Work Allocation Through Call-Off Contracts
- When a project arises, the buyer chooses a supplier from the framework.
- This selection can be direct (choosing the best fit) or through a mini-competition between approved suppliers.
- The selected supplier signs a call-off contract, which outlines specific project details, timelines, and costs.
- Project Execution
- The supplier completes the project following the pre-agreed framework conditions.
- Buyers monitor performance to ensure compliance with standards.
Types of Work Allocation in a Framework Agreement
Framework agreements allow buyers to award work in different ways, depending on the project's needs. Some agreements use a direct award process, while others require a mini-competition to ensure fairness.
| Work Allocation Method |
How it Works |
| Direct Award |
The buyer selects a supplier from the framework without competition. |
| Mini-Competition |
Approved suppliers bid for the project within the framework. |
| Rotational Allocation |
Work is distributed among suppliers in a structured sequence. |
Framework agreements provide a fast, efficient, and cost-controlled way to manage construction procurement. They help buyers avoid delays, reduce paperwork, and maintain consistent quality while giving suppliers access to repeat business opportunities.
Pros and Cons of Framework Agreements in Construction
A framework agreement in construction helps buyers speed up procurement, control costs, and maintain quality, but it also has challenges such as no guaranteed work for suppliers and limited competition. While buyers benefit from pre-approved contractors and structured processes, suppliers must compete for contracts without assurance of receiving projects.
The table below outlines the key advantages and disadvantages of using a framework agreement in construction.
| Advantages |
Disadvantages |
| Reduces time spent on repetitive tendering. |
No guaranteed work for suppliers. |
| Controls costs with pre-negotiated rates. |
Limits competition, potentially reducing cost savings. |
| Ensures consistent quality through pre-approved suppliers. |
May restrict project flexibility and prevent new suppliers from joining. |
| Builds stable, long-term buyer-supplier relationships. |
Requires ongoing management for compliance and performance tracking. |
| Reduces legal risks by following standardized contract terms. |
Can lead to over-reliance on a small group of suppliers. |
How to Get Into a Framework Agreement (For Contractors & Suppliers)
Contractors and suppliers can join a framework agreement by applying during the buyer’s selection process. They must meet experience, financial, and compliance requirements and submit a competitive bid to qualify. While being in a framework does not guarantee work, it gives suppliers a chance to compete for multiple projects.
Below are the steps to join a framework agreement:
- Find available frameworks: Check tender notices from government agencies, developers, or procurement portals to see open opportunities.
- Check eligibility criteria: Review the buyer’s requirements for experience, financial stability, and legal compliance to ensure your company qualifies.
- Prepare and submit a bid: Provide company details, pricing, past projects, and compliance documents to show you meet the framework conditions.
- Undergo evaluation and selection: Buyers assess bids based on cost, quality, and capability. Only the best-ranked suppliers are approved.
- Sign the framework agreement: If selected, sign the contract that sets the terms for pricing, performance, and project requirements.
- Maintain compliance and performance: Follow all framework rules, meet quality standards, and stay competitive to secure contracts.
Joining a framework agreement helps suppliers access more projects without bidding for each one separately. However, they must maintain good performance and compliance to stay in the framework and win work.
Framework Agreement vs. Traditional Construction Contracts
A framework agreement allows buyers to select suppliers in advance and award contracts when needed, while traditional contracts require a full tender process for each project. Framework agreements are ideal for ongoing procurement needs, whereas conventional contracts suit one-time projects with clear scopes and deadlines.
The table below highlights the key differences between a framework agreement and a traditional construction contract in construction.
For a closer look at direct contracts between project owners and contractors, read our Prime Contract guide.
Legal and Procurement Considerations
Framework agreements must follow procurement laws, which vary by country. For example, public sector contracts in the UK must comply with the Public Contracts Regulations 2015, while in Australia, they follow the Commonwealth Procurement Rules. Buyers and suppliers should ensure they meet local regulations when entering a framework agreement.
Below are important legal and procurement factors to consider when using a framework agreement.
- Procurement Laws: Public sector frameworks must comply with government procurement rules to ensure fair competition and transparency.
- Legal Validity: Framework agreements must be properly structured to be legally enforceable, including clear contract terms and obligations.
- Awarding Contracts: Buyers must follow the framework’s set rules when awarding contracts to avoid disputes or unfair selection practices.
- Regulatory Compliance: Suppliers must meet licensing, safety, and industry regulations to stay eligible for projects under the framework.
- Dispute Resolution: Framework agreements should include clear procedures for handling contract disputes, payment issues, or supplier performance problems.
Following legal and procurement guidelines helps buyers and suppliers avoid legal challenges, ensure fair competition, and maintain smooth project execution within the framework. Proper contract management and compliance with regulations protect both parties from risks and disputes.
