What we know so far about the European aid framework contract

The European Commission's Directorate-General for International Partnerships, or DG INTPA, has announced a new pot of funding via a new framework contract, with an estimated total value of €680 million (about $725 million) up for grabs. The existing framework contract is due to close at the end of May. The announcement of the replacement framework came in July 2022 and was confirmed last month. There are some major changes that appear aimed at increasing bidding opportunities for smaller firms, but which seem likely to significantly pile onto the workload for officials managing the bid. Most importantly, the contract has been broken up into many smaller specialist areas known as “lots” — 17, instead of six. While the €680 million total value of the framework contract is similar in value to the last framework, which was issued in 2018, the largest individual contract that can be bid on has risen to €2 million — up from €1 million in the previous framework and €300,000 in earlier iterations. The European Commission released the prior information notice for the framework contract — known as SIEA, or Services for EU’s external action 2023 — last month. Final bids are due in late March, although sources familiar with the contract said that an extension to this deadline is likely to occur. Devex spoke to current framework contractors to understand what organizations, including those that are new to European Union funding, need to know. What are framework contracts? A framework contract is a quick-and-easy way for the European Commission to tender out smaller service contracts — those valued at €2 million or less. Framework contracts, sometimes called FWCs, are umbrella contracts between the European Commission and consortia of implementers. They have no direct financial value in themselves, but they put consortia on an approved list which can quickly and easily be appointed for contracts that must be delivered quickly. All framework contracts are managed by Brussels, but European delegations across the world manage specific assignments. As mentioned above, the FWC is divided into 17 technical areas, or lots. During the bidding process, EU staff assess consortia for their suitability to work on each lot. Each consortium will have a single firm acting as a lead bidder. Once signed up, consortia become preferred suppliers of consultancy services to the European Commission. Then, when the commission wants to tender a specific project, they send out a proposal to the ready-made list of bidders, who will typically have a short time to turn around their bids — often no more than two weeks. The current ongoing contract is worth €650 million, and is divided into only six lots. Devex analyzed the most successful bidders for the previous round of contracts and found more than 17% of all business went to just 10 companies. What’s different about the 2023 FWC? Framework contractors who spoke to Devex said the changes could have major implications for the way the FWC runs and the types of organizations that apply. On the one hand, the maximum contract sizes are growing bigger, but on the other, the larger number of individual lots, and reduced number of consortia per lot, will force companies to choose only a few areas in which to bid. Paloma Garrón, head of framework contracts at DT Global Europe, said this is likely to have the effect of allowing more smaller companies to come into the market, and increasing the number of organizations with more specific technical expertise. Garrón also said she was concerned about the additional workload that the evaluation process — because it is an open procedure — would put on officials. Like last time, the applications are an open international tender, meaning that anyone can apply. Each bidder will have to submit a full offer, which will mean a significant amount of reading for the officials involved. Lots of lots Here are the main lots in the framework: Lot 1: Climate change, sustainable energy, nuclear safety. Lot 2: Sustainable natural resources management — environment, biodiversity, forests, water, and circular economy. Lot 3: food systems, sustainable agriculture, and nutrition. Lot 4: Sustainable transport, infrastructures, green cities, connectivity, and sustainable mobility. Lot 5: Science, technology, innovation, and digital. Lot 6: Macroeconomic analysis, fiscal policies, budget support. Lot 7: Microeconomic analysis, investment climate, private sector, trade, and employment. Lot 8: Sustainable financing for development. Lot 9: Democracy, human rights, rule of law, gender equality, and human rights-based approach. Lot 10: Civil society and local authorities. Lot 11: Security, conflict prevention, sustaining peace, and building resilience. Lot 12: Education, culture, and youth. Lot 13: Health, social inclusion and protection, inequalities. Lot 14: Migration and forced displacement. Lot 15: Monitoring. Lot 16: Evaluation at intervention level. Lot 17: Strategic evaluation.