PhD Final Thesis April 2013.pdf - Anglia Ruskin Research Online

Thesis Keith Gale 2013recognition of this Article 32.2, Directive 2004/18/EC of European Regulationsstates:‘Contracting authorities may not use framework agreements improperly or in such away as to prevent, restrict or distort competition.’Furthermore, the European Courts require that competition is placed at the fore ofpublic sector procurement through case law:‘development of effective competition in the public procurement sector is one of theobjectives of the Directives dealing with this area’ (Sintesi, 2004)and confirmed through comment upon competition law:‘public procurement directives do not operate in a legal vacuum – both Communityand national competition rules apply to them’ (Commission European, 2005, p 5).Application of statutory, advisory and case legislation places a significant burdenupon contracting authorities to ensure that framework agreements comply withEuropean Directives and also operate in a fair and transparent fashion.Concerns with competition due to a smaller number of suppliers have also beenexpressed through the private sector. Although some private sector organisationspioneered use of framework agreements, pressure on capital budgets due toeconomic contraction over the last three years has caused re-evaluation of value formoney to be undertaken. BAA plc were amongst the first to develop frameworkarrangements based upon a ‘cost plus’ model in order to secure commitment andresources for large capital projects. The economic down turn since the financialmarket collapse in 2008 has challenged strategic views of the effectiveness of thismodel. BAA’s framework arrangements expired during 2009/2010 and werereplaced by elements of traditional tendering with a wider list of suppliers effectivelymirroring a traditional procurement model (Morgan, 2009).A substantial reduction in fiscal government spending for the year 2011/2012 hasalso questioned the value of framework agreements for public authorities, both inquantum of transaction and capital costs, with a number of clients reverting to‘lowest bid wins’ models. This may be considered a retrograde step reflectingengagement methods used by public authorities prior to introduction of collaborativeframeworks (Flanagan et al, 2005). Selection of lowest price bids by public clients isunderstandable due to the scrutiny upon which such decisions are made (Flanagan etal, 2007) and financial pressures upon construction budgets.39