Governments across OECD countries are seeking to make public service delivery more efficient and cost-effective, largely because of budgetary constraints but also to respond to growing expectations from citizens. In exploring different policy options, they are finding that technical policy instruments, such as procurement contracting tools, can also be levers for change. This report looks at framework agreements in the procurement processes in Chile.

Efforts to improve procurement procedures, reduce duplication and achieve greater value for money have led to the development across OECD countries of policies promoting the use of collaborative procurement tools and strategies such as centralised purchasing, framework agreements, dynamic purchasing or joint procurement. They are also reflected in the 2015 OECD Council Recommendation on Public Procurement.

Since their establishment in 2003, the use of framework agreements in Chile has increased dramatically. More contracting authorities rely on this collaborative procurement instrument, and awarded suppliers have doubled in the last two years. Under the responsibility of Chile’s Central Purchasing Body, ChileCompra, the sustainability and efficiency of the system are now at stake, which poses new challenges on how to support and manage the increasing use of this instrument. This chapter provides an overview of the major trends of the existing public procurement system in Chile and highlights the underlying objectives of framework agreements. It also includes the results from a benchmarking exercise across several OECD and non-OECD countries, which uses the responses received from the 2015 OECD Survey on Centralised Framework Agreements.

Deciding to implement collaborative procurement instruments, such as framework agreements, requires detailed analyses of both the demand and the supply side to ensure that these instruments meet their underlying objectives. This chapter analyses concepts such as demand heterogeneity and supply uncertainty, which are central to the costbenefit analysis of the implementation of procurement tools. It also highlights common practices across countries in the definition of procurement strategies.

As value for money is the primary objective of public procurement, countries have to develop an environment that is conducive to competition by reducing the asymmetry of information between contracting authorities and economic operators, but also by raising awareness of procurement opportunities. This chapter analyses how ChileCompra could improve competition, and thus the efficiency of framework agreements when they are designed, by encouraging early engagement with suppliers, developing the capacity of the public procurement workforce, standardising goods and services, and reducing the number of awarded economic operators.

Once implemented by central purchasing bodies (CPBs), framework agreements are meant to be used autonomously by contracting authorities. However, without guidance or structured ordering processes, the potential efficiencies in the tendering process and the selection of suppliers could be put at risk. This chapter assesses country practices in supporting contracting authorities to make the most of existing framework agreements. It provides recommendations for ChileCompra on increasing the efficiency of the system and allowing contracting authorities to take informed purchasing decisions.

Effective framework agreements aim to deliver several benefits to the public sector: they generate economies of scale, avoid duplication and reduce red tape costs. Multidimensional assessment tools should be developed and used to ensure that these collaborative procurement instruments deliver on their initial promises. This chapter examines efforts undertaken by ChileCompra and other countries to monitor the overall performance of framework agreements. It analyses related challenges, notably in obtaining supporting information.

This chapter makes recommendations for ChileCompra to revisit the design and management of its framework agreements. By comparing the benefits obtained in various OECD countries, it suggests policy options that ChileCompra could consider to further strengthen the strategic approach to its centralised procurement function. Policy options are structured against the procurement cycle following a phased approach, this allows for immediate additional efficiencies and for more long-term transformational changes.