Legal Articles
We discuss the latest legal developments and provide simplified analyses to understand local and international laws easily.
We discuss the latest legal developments and provide simplified analyses to understand local and international laws easily.
A framework agreement is a contract concluded between one or more government entities and one or more suppliers, under which the general framework of terms and conditions governing subsequent contracts or purchase orders issued during a specified period is determined, without committing to predefined quantities or final values. This mechanism aims to unify procurement procedures and enhance the efficiency of government spending, in accordance with the government procurement laws and regulations in force in the Kingdom.
Framework agreements are applied in a number of practical cases, most notably:
• The need for repeated contracting for homogeneous goods or services.
• The existence of future needs for recurring works or purchases where quantities cannot be accurately determined in advance.
• Addressing emergency situations that require rapid contracting.
• Difficulty in accurately estimating the volume of works or quantities at the time of tendering.
Framework agreements aim to achieve several regulatory objectives, most importantly:
• Achieving the best value for public funds and rationalizing expenditure.
• Unifying specifications, quality, and prices of goods and services.
• Accelerating procurement procedures, particularly through the unified electronic marketplace.
Framework agreements are classified into several types depending on the contracting entity and their nature, as follows:
• Unified agreements: Concluded by the Expenditure and Projects Efficiency Authority on behalf of government entities.
• Entity-specific agreements: Concluded directly by the government entity in the absence of a unified agreement.
• Open framework agreements: Allow new suppliers to join during the term of the agreement, provided that its duration does not exceed four years.
• Closed framework agreements: Do not allow the addition of new suppliers after conclusion, and their duration does not exceed three years.
Framework agreements go through several regulatory procedures, including:
• Determining the financial ceiling and estimated quantities.
• Verifying the availability of the required budget appropriations.
• Offering the competition through the “Etimad” platform.
• Awarding and concluding the agreement and registering it on the contracts platform.
• Issuing purchase orders as needed, with submission of the final guarantee at a rate of (5%).
The implementation of the framework agreement is subject to a dual evaluation mechanism, whereby the contractor’s performance is evaluated for each purchase order individually, in addition to a comprehensive evaluation of performance throughout the entire term of the agreement.
In emergency cases, or where implementation of the framework agreement is not possible for any regulatory or practical reason, the government entity may carry out procurement outside the scope of the agreement, in accordance with the controls prescribed by law.
Framework agreements represent one of the effective regulatory tools within the government procurement system, due to their role in unifying procedures, accelerating procurement processes, and ensuring the best value for public funds, while maintaining the quality and specifications of goods and services, reflecting a high level of professionalism and efficiency in managing government expenditure.