Public procurement through central framework agreements
New study on the competition on public procurement through central framework agreements. The Danish Competition and Consumer Authority's (DCCA) study on public procurement through central framework agreements shows that in most cases, there was a basis for effective competition to be awarded a contract under a central framework agreement. However, on every sixth agreement agreements, all tenderers were eventually awarded contracts.
The current study investigates whether there is effective competition between enterprises when they sell their products to public customers through central framework agreements, and whether it is easy for customers using central framework agreements to purchase good and useful products at a low price. If that is the case, central framework agreements can contribute to effective public procurement and to supporting well-functioning markets.
To form an overall picture of the competitive situation, the DCCA has chosen to analyse all markets with central framework agreements collectively rather than examining individual markets in this study.
In summary, the study findings seem not to give a direct indication that central framework agreements will have an impact on market structures in the long term when analysed across the agreements examined. No in-depth analyses have been made of the individual agreements to analyse the potential impact on the market structures of individual markets. In order to shed light on the impact on individual markets, the DCCA has obtained revenue data from Statistics Denmark for the suppliers under the central framework agreements established by the SKI and the Central Procurement Programme. Furthermore, the study indicates that, in most cases, there was a basis for effective competition for contracts under the central framework agreements analysed. However, the study shows that competition for some agreements may have been weakened. The DCCA believes that the framework agreements would contribute to supporting well-functioning markets to a much higher extent if competition for contracts under the framework agreements became more effective, e.g. by providing a greater certainty of revenue.
The questionnaire survey conducted by the DCCA also shows that purchasers find that the central framework agreements established by the SKI, the Central Procurement Programme and the inter-municipal joint purchasing bodies often make it easy to purchase products that meet end user demands at a low price. More than half of the purchasers of the survey have experienced that procurement through framework agreements either ensures a low price (60 per cent), a less resource-intensive procurement process (60 per cent) or a good match of supply and end user demands (50 per cent). One of every four purchasers experience a low price, a less resource-intensive procurement process, and a good match of supply and end user demands when making purchases under central framework agreements. By contrast, a minor part of purchasers experience that the procurement under framework agreements does not result in a low price (6 per cent), a less resource-intensive procurement process (13 per cent) or a good match of supply and end user demands (8 per cent).
Summary and main conclusions are available for download.
Full publication available in Danish