A framework agreement sets out the terms, rates and sometimes the list of approved suppliers for work that may be ordered in the future over a set period. Each job is then called off under it, without a fresh tender. Public sector clients, housing associations and maintenance contractors use them heavily. They save time on both sides but usually promise no volume.
Worked example
A housing association appoints a contractor on a three-year framework for void refurbishments at fixed rates: £850 for a kitchen strip and re-fit labour package, £420 for a bathroom plumbing package, and £38 an hour for daywork. The first call-off is for a void property:
| Item | Amount |
|---|---|
| Kitchen package at framework rate | £850 |
| Bathroom plumbing at framework rate | £420 |
| Materials at agreed rebate | £2,150 |
| Daywork, 12 hours at £38 | £456 |
| Call-off order value | £3,876 |
If the contractor's own cost is £3,300, the margin on the order is £576, or about 15%. The rates were fixed in year one, so any wage or materials rise in years two and three comes out of that margin unless the framework allows for price adjustment.
Framework work in the money
The danger on frameworks is not one large job losing money, but many small orders each losing a little. Each call-off needs its own order, budget and margin check against the agreed rates. A job that drifts from the framework rates gets paid late or disputed.
- Set up each call-off as its own job so cost and margin are visible.
- Check Supplier and Subcontractor prices against the framework rates before ordering.
- Review rate increases at each anniversary and record whether the framework allows them.
- Watch the total value across all call-offs. A framework with a ceiling can be used up faster than expected.
Related terms
Subcontract, Supplier, Main Contractor, Lump Sum Contract, Schedule of Rates.
Planyard's subcontract orders let each call-off carry its own order and cost, so the margin on every small job under a framework is tracked, not guessed.
