The Best Procurement Books of 2016: The Law and Economics of Framework Agreements

Continuing our reprise of the best procurement books of 2016 – this was first reviewed on our Public Spend Forum website.

Caroline Nicholas has written a number of articles for us in the past, including this. She is a lawyer and public procurement expert who works in the International Trade Law Division at the United Nations Office of Legal Affairs. She is very knowledgeable but combines that theoretical understanding with a sharp sense of commercial reality, based on our meetings with her.

Along with Gian Luigi Albano (from Consip Ltd and a Professor at the School of National Administration in Rome), she has written a book titled The Law and Economics of Framework Agreements – Designing Flexible Solutions for Public Procurement. It is published by the Cambridge University Press and is available here for £53.46 – not cheap, but it is priced in line with textbooks / reference works rather than as a business bestseller!

Most readers will know what frameworks are in a public sector sense, but few of us would have imagined that there was enough material about the topic to fill a book of some 330 pages. Yet, based on our initial view, it looks like the authors have managed to keep it relevant and interesting for anyone (practitioner, academic, lawyer, supplier or policy maker) who is interested in how public procurement currently works, could work and should work.

As the introduction says: “Framework agreements have arisen in response to the well documented and high costs of public procurement procedures. The agreements have significant potential to improve procedural efficiency in public procurement, but are complex to operate. Inadequate preparation and implementation can also frustrate their potential both to tackle waste, abuse and corruption and to enhance value for money”.

We have written about frameworks here and on Spend Matters of course, which is maybe why I get a mention in the book’s acknowledgements (along with about 50 other people). There is no doubt that frameworks are useful, probably essential tools, yet we know they can prove to be less than perfect for delivering value, guarding against corruption, and delivering wider social value (the three core objectives of public procurement). That is true whether they are let for use by a single authority or by a collaborative body for multiple contracting authority purposes.

The book itself is organised in three parts. The first concentrates on the essentials of frameworks – basic definitions, the main economic issues and a useful discussion of international experience (this does aim to be a very international book). The second part looks at “fostering competition and preventing collusion in framework agreements” and the final part considers and advises on the design of framework agreements.

We should stress that we have not read every page of the book so far. But based on a couple of hours spent reading sections and looking up points of interest, it appears that one big positive of the book is its balanced view. The authors recognise the positives, but are not afraid to point out the drawbacks and risks – for example, “there may be fierce competition to be admitted to the framework agreement, but thereafter the competitive impetus may completely disappear”.

Another strength of the work is that the focus here is international in outlook and multi-faceted. So of course it covers “procurement” issues, but it is also strong on law matters and, unusually for a procurement book, it really explores the economics around the topic, from both the contracting authority and the supplier perspectives. For instance, “some suppliers may price their offers at a level that they hope will admit them to the framework agreement but yield relatively few profitable contracts”.

Few buyers consider this, in our experience. Suppliers play different games around frameworks, and not all want to win as much work as they might once they are on the list. That has implications for the selection strategy, for how criteria are weighted, and how the second stage “call-offs” might be run.

That is a good example of how the book can provoke thought. Some sections are more technical and perhaps less immediately interesting, but the style throughout manages to be rigorous – so lots of footnotes as in an academic work – but written in a pretty straightforward style. Yes, inevitably there is jargon (our jargon as procurement people in the main) but it never gets in the way of understanding.

So at first sight, a very impressive book, with real application for quite a range of folk. We will spend some more time with it and have more comments here once we have done that.

Discuss this:

Your email address will not be published. Required fields are marked *