Tennant, S and Fernie, S (2010) A contemporary examination of framework agreements. In: Egbu, C (ed.) Proceedings of 26th Annual ARCOM Conference, 6-8 September 2010, Leeds, UK.
Abstract
The purpose of this paper is to examine the future role of client-contractor Framework Agreements in the wake of an unprecedented downturn in construction activity. The research is based on a review of literature and selected interviews with senior industry practitioners. The Royal Institute of Chartered Surveyors (RICS) publication, Contracts in Use: a Survey of Building Contracts in Use during 2007 is used to highlight a growing trend for collaborative working arrangements. The logic is that in buoyant market conditions the repeat construction client is trying to secure a number of key business objectives namely; value for money (VfM), predictability and protection of construction supply. In the event of a recession the commercial relationships understandably become fraught. Previous research evidence suggests that market dynamics dictate the management of contractual relations. While contractors continue to secure work via non-binding Framework Agreements clients may be persuaded that traditional procurement arrangements offer better business opportunities. Preliminary results of the investigation demonstrate a number of private sector clients rejecting Framework Agreements in favour of traditional competitive procurement routes. Public sector investment continues to sponsor collaborative working practices via Framework Agreements but there have been an increasing number of clients demanding 'more for less'. The paper will serve as a timely examination of the cause and effect market dynamics can have on client-contractor behaviour and the discernable shift in commercial leverage that will accompany fluctuating levels of construction activity. As a consequence Framework Agreements allied with opportunities for improved supply chain integration may fall victim of the current market cycle.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | framework agreement; procurement; client; recession |
| Index terms: | practitioner, chartered surveyor, evidence, investigation, dynamics, publication, value-for-money, supply chain integration, contractual relations, building contract, recession, framework agreement, interview, survey, public sector, construction client, traditional procurement, market condition, construction activity, working practice, private sector |
| Subjects: | contract law, management, evaluation, systems engineering, administrative law, industry analysis, contract type, evaluation and assessment methods, data collection methods, research dissemination and communication, profession, practitioner, economic and policy analysis, economic analysis, supply chain integration, construction operations, contractual arrangements |
| Topics: | Engineering Principles, Information Management, Research Practice, Business Strategy, Procurement, Roles and Professions, Supply Chain Management, Value Management, Legal Issues, Site Management, Organizational Design |
| Descriptive scope: | 4 PCEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here