The difference between spot buying and Framework agreements.
Updated: Aug 19, 2022
A framework agreement can be defined as an agreement between two or more business organizations. In a framework agreement, the governing terms and conditions for contracts with regard to the price, service levels, quality, scope, specs of goods and services and quantity are normally established for the duration of the agreement. Such agreements create a long-term relationship between both parties to carry out work mutually.
Setting up a framework agreement between organizations is a highly efficient way of working together. The actual tendering process and the time taken for those processes can be saved. In a framework agreement, work is normally awarded to a bidder after running a tender. This reduces the time required and complexity of those works.
Whereas strategic sourcing with frame agreements involves long-term sourcing commitments, spot buying occurs when there is an immediate requirement and a purchase must be made, quite literally “on the spot.” These purchases are usually unplanned, made up of small orders, and often paid for immediately.
Both of them can be covered on Valcori, our tendering software. Tenders for framework agreements can be fully covered in Valcori by having multiple requests during a tender, which allows you to orchestrate your tender in stages.