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The value of government contracts awarded to the private sector via a pre-approved shortlist without full competition has tripled in the past four years and is raising transparency concerns, according to new research.
More than £35bn of contracts were handed to the private sector in 2023 via “framework agreements”, up from £10bn in 2019, figures from the government procurement data provider Tussell show.
Frameworks are agreements made with a pre-approved list of suppliers where certain terms, conditions and legal protections are agreed in advance, so work can be awarded directly or with a mini-competition between the listed bidders.
These contracts are designed to speed up procurement for public authorities but experts say their use has led to a reduction in transparency because of the absence of public notices on tenders.
Gus Tugendhat, founder of Tussell, said the “use of frameworks has contributed to making government purchasing quicker”.
But he added that this had raised concerns as tenders are “only advertised to the closed group of suppliers already on the framework, and the ensuing contract awards are not published as consistently as those awarded through open competition”.
The Cabinet Office pointed to the new Procurement Act, which comes into force in October this year and will replace European Union legislation. It said the act would require greater transparency and require the establishment of a new online register of contracts to reduce duplication.
But Steven Brunning, procurement lawyer at solicitors Anthony Collins and a member of the University of Nottingham’s Public Procurement Research Group, said it was not “clear that the reforms will solve the problem of multiple, overlapping, generic frameworks that are being overused and, in many cases, misused”.
The largest framework provider in the UK is the Crown Commercial Service, which operates within central government and is an executive agency of the Cabinet Office, which develops public procurement policy.
Around £22.5bn of framework contracts were awarded through the CCS in 2023, according to Tussell.
However, NHS trusts and local authorities also use this type of contract. They can cover a range of services from construction to food supplies and equipment in hospitals, to running prisons and immigration detention centres.
Martin McTague, national chair of the Federation of Small Business, said the use of such contracts made it harder for small businesses to win work. “Framework agreements typically bar competition from anyone who doesn’t apply to be on them from the start,” he said.
“While larger firms can more easily afford to get on any framework going, small firms without their own army of bidders . . . are effectively blocked from competing for contracts,” he added.
A report by the National Audit Office last year warned of concerns over the use of frameworks. “They are not always the way to achieve the best competition” and could result in inflated prices, the report found.
Suppliers warned that “high bid costs, lack of confidence in evaluation and a lack of feedback can deter” them from bidding, the NAO said.