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Scholars4 Advantages of Framework Contract

In the business world, there must be a lot of terms that you might not be familiar with. Do you know about framework contract? What are the advantages of framework contract? In this article, we will discuss more deeply about framework contract.


What is a Framework Contract?

Before discussing the advantages of a framework contract, you must first know the meaning of an framework contract.

Framework Contract is an agreement with one or a number of providers to perform procurement of goods and services by setting a unit price (terms & conditions for purchase transactions during the agreement period).

Usually, this contract is used for procurement or work that is usually carried out in part with exact specifications, but the volume itself cannot be determined. Usually this contract is used by travel agents, stationery providers, and hospitals.


Benefits of an Framework Contract

When you already know about the main advantages of framework contract, now you need to know about the advantages of framework contracts, including the following:


  1. Reduce procurement time (reduce time)

One of the advantages of an framework contract is that it can be used for procurement of goods and services whose volume is approximate. The need for providers has been met, but the transaction is situational.

In addition, framework contract can be used for multiple users and can be extended for several years. Other users do not need to carry out a repetitive procurement process or if the goods / services are required for several years, it is sufficient to procure them once.


  1. Lowering prices (reduce costs)

With the condition of a framework contract that can be used for several users or for several years, it will open up a bigger market or make the volume bigger, of course this will push prices to be more uniform, cheaper and more efficient.


  1. Reducing the risk of not having goods / services (reduce risk)

Procurement processes that begin with readiness and implementation take time. With the existence of procurement under a framework contract – the procurement of which does not need to wait for budget certainty – makes procurement transactions when there is budget certainty can be executed immediately. The need for service goods is fulfilled quickly because providers, specifications, prices, etc. are already available.


  1. Reduce repetitive work (reduce effort)

Repetitive work from time to time with the accompanying procurement process will cause process inefficiencies. Procurement under framework contract allows one-time, repetitive procurement to be carried out only once.

With the implementation of a framework contract, it is expected that prices will decrease. It could be that the price is fixed but it can reduce the risk of not having goods / services and reduce the time of the procurement process and will support the company’s performance.


For those of you who want to consult about corporate law, you can contact Ansugi Law.



Disclaimer : This article is a written by contributor based on posts from @ansugi.law Instagram for the purpose of search engine optimization.


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