Tendering for work that never materialises may sound a waste of time, yet that is what travel management companies can do as framework contracts become more common.

Success means becoming in effect an approved supplier. Actually gaining business depends on whether subscribers to the framework require their staff to use it, whether one is successful in ‘mini-compete’ tendering exercises held within it, and whether a company can effectively market itself to the individual framework members.

The advantage is that, once on a framework, there should be a steady flow of business without the need continually to undertake costly tendering.

There is also, for the larger frameworks such as that operated by Buying Solutions for central government, an undoubted increase in reputation and brand awareness for a travel management company in being an approved supplier.

But why use frameworks at all? If a government department knows its travel requirement, why not appoint one TMC to handle it rather than go through the hoops of a framework?

A Buying Solutions spokesman explains: “Overall, framework agreements provide much easier and quicker access to public sector contracts for common goods and services.

“They provide the public sector with a convenient procurement vehicle that offers value for money, a choice of suppliers and compliance with UK and EU procurement legislation.

“By aggregating buying power and managing the procurement process we save our customers time and money.”

Buying Solutions’ frameworks are awarded after a tender process that seeks the most advantageous outcome taking into account price, quality, capacity and track record.

It admits there is no guarantee of any business, but believes there are also advantages to suppliers including removal of the need to respond to multiple OJEU advertisements, customer confidence that a framework supplier has already demonstrated value for money and quality, and standard contracting terms including for prompt payment.

All this may be true, but suppliers must bid when they have no idea how much, if any, business they will get, yet that quantity will determine costs and prices.

Buying Solutions’ spokesman says: “The indicative spend featured in the OJEU notice [for the framework] is based on extensive research and customer consultation to establish expected spend during the life of the framework agreement. However, this can be influenced by political and economic factors.”

There are clearly advantages and disadvantages for both clients and suppliers, and success with frameworks depends on seeking a judicious balance.

Nigel Turner, director of programme management for the UK and Ireland, at Carlson Wagonlit, says: “It is a lot of work to bid for these with no guarantee of business. There are pros and cons, but I do expect to see their use increase, as there will clearly be more moves towards central procurement.

“The challenge is that you are bidding for a virtual volume of business, and although it is quite a large volume you are not pricing against criteria as you would be with a normal contract.

“You have to have an economic model of what an ‘average’ customer in such a field might want.”

Turner says he has seen public sector frameworks where it was uneconomic to bid because “the scope of what is wanted does not make it viable and would not justify the time and expense”.

He can though see their attraction for clients, who having chosen their suppliers can “just call off someone from the framework or perhaps hold a mini-competition among suppliers on it”.

Redfern Travel’s commercial director Mark Bowers says public bodies are becoming more aware of framework contracts but have yet to “get the hang of mini-competes”.

These should be cheap and cheerful competitions between approved suppliers for parcels of work, but Bowers says he has known some government bodies use a full OJEU process for these even though all those bidding are already on the framework concerned.

Properly done, “I can respond to four mini-competes in a day if need be”, he says, but bids for inclusion on frameworks themselves can take between three and nine months for results, and Bowers knows of one from a public body where negotiations have gone for two years without conclusion.

He says to be effective for both clients and suppliers, use of a framework should be “100% mandated” by each member on its staff.

The reality is different. “Procurement officers try to find ways round it because if you have a framework that works, would you need so many of them?

“If a framework were mandated in the private sector and someone refused to use it they would lose their job, and quite rightly so, but that does not happen in the public sector.”

Mandating also concerns Steve Summers, chief operating officer of Key Travel, as once on a framework, suppliers have to invest in continued sales and marketing work to promote themselves to each of four layers of organisations, departments, bookers and travellers, since they compete both with other framework members and attempts by staff to buy elsewhere.

“The process chosen for any framework should be proportionate to the amount of control it exercises on the spend of the membership,” Summers says.

“Given the significant costs of responding to frameworks, and the competitive pricing expected in such a process, it would not be unreasonable for a supplier to expect a level of return, but volume or spend commitments rarely exist, if ever.”

He adds: “A TMC can create the biggest impact on spend when it operates in partnership with clients managing a controlled travel programme.

“This is not seen often enough in the public sector, although the new economic reality may now drive this change.”

Summers says frameworks can be extremely helpful where they consolidate the requirements of a large number of members that would be harder for a supplier to approach individually.

But in the public sector those member bodies can have different needs or objectives for travel management.

“Where those differ significantly, the final impact of the framework, measured by adoption, can be reduced significantly,” he says.

Summers says ultimately it is the appetite of an organisation to control travel spend that delivers value.

Gaining membership of a framework is, it seems, a means to an end for TMCs, rather than an end in its own right.

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