Table of Contents
Definition and Purpose of Call-Off Contracts
Call-off contracts serve as powerful procurement tools that allow organisations to maintain supplier relationships while preserving flexibility in their purchasing decisions.
They establish predetermined terms for future transactions without committing to specific quantities upfront.
What Is a Call-Off Contract?
A call-off contract is a formal agreement between a buyer and supplier that enables the purchase of specific goods or services as needed, typically under a framework agreement.
When you enter a call-off arrangement, you establish the commercial terms, conditions, and pricing in advance, but you don’t commit to exact delivery dates or quantities at signing.
Instead, you can “call off” items from the supplier when required.
Call-off contracts are particularly common in the public sector, where they help streamline procurement processes.
They’re often used for regular purchases of materials or when organisations need to move quickly without initiating a full tender process for each transaction.
For public sector organisations, call-off contracts awarded above certain thresholds (£12,000 for central government or £30,000 for other bodies) must be published on Contracts Finder.
Key Features of Call-Off Contracts
Call-off contracts offer several distinctive characteristics that make them valuable procurement tools:
Pre-established terms: Pricing, quality standards and delivery conditions are agreed upfront
Flexibility: You can order what you need, when you need it
Reduced administrative burden: No need to negotiate terms for each purchase
Duration: Typically covers a defined period, often 1-4 years
Legal framework: Creates binding obligations once items are “called off”
Call-off contracts work particularly well for commodities and services with fluctuating demand.
They provide certainty around pricing while maintaining the flexibility to adjust quantities based on actual requirements.
Differences from Standalone Contracts
Call-off contracts differ significantly from standalone contracts in structure, flexibility and purpose.
While standalone contracts specify exact deliverables, quantities and timelines, call-off contracts establish only the framework for future transactions.
With standalone contracts, you commit to specific purchases upfront.
In contrast, call-off arrangements allow you to maintain supplier relationships without immediate financial commitments.
This reduces your risk, especially when demand is uncertain.
Standalone contracts typically require complete procurement processes for each purchase.
Call-offs streamline this by establishing terms once, then allowing multiple purchases under the same agreement.
Call-off contracts often form part of broader framework agreements involving multiple suppliers, whereas standalone contracts typically involve direct one-to-one relationships.
This structural difference provides you with additional flexibility and potentially better value through mini-competitions between framework suppliers.
Relationship Between Call-Off Contracts and Framework Agreements
Call-off contracts function as specific procurement instruments within the broader structure of framework agreements.
These contracts allow buyers to efficiently purchase goods or services from pre-qualified suppliers without repeating the full procurement process for each purchase.
Role Within Framework Agreements
Call-off contracts represent the practical implementation of framework agreements.
When a public sector organisation establishes a framework agreement with one or multiple suppliers, they create the foundation for future purchases.
The framework itself does not obligate the buyer to make purchases, but it establishes the terms under which future call-off contracts can be awarded.
Call-off contracts are essentially the individual orders placed within the established framework.
These contracts inherit their core terms and conditions from the overarching framework agreement, ensuring consistency and compliance with procurement regulations.
Framework agreements streamline procurement by pre-approving suppliers who meet specific quality and capability standards.
This pre-qualification process means you can issue call-off contracts quickly when needs arise.
Types of Framework Agreements
Framework agreements typically come in two main forms: single-supplier and multi-supplier arrangements, each affecting how call-off contracts are awarded.
In single-supplier frameworks, you have a straightforward process where all call-off contracts are directed to the sole pre-qualified supplier.
This works well when you need consistency or have specialised requirements that only one supplier can meet.
Multi-supplier frameworks offer more flexibility.
When issuing call-off contracts under these arrangements, you can either:
Make direct awards based on objective selection criteria set out in the framework
Conduct mini-competitions (mini-tenders) among framework suppliers to determine the best provider for your specific requirement
The Public Contracts Regulations govern these processes, ensuring fair competition while allowing you to benefit from streamlined procurement methods.
Importance of Framework Terms
The terms established in the framework agreement significantly impact all subsequent call-off contracts.
When setting up a framework, you should include as many call-off terms as possible in the initial documentation.
Pre-established terms provide clarity to suppliers about their obligations and risks, making pricing more accurate and reducing disputes.
These terms typically cover:
Quality standards
Delivery requirements
Payment terms
Performance metrics
Liability provisions
Framework terms must be comprehensive while allowing flexibility for specific call-off requirements.
You’ll need to balance standardisation with the ability to tailor individual call-off contracts to meet particular needs.
Framework terms cannot be substantially modified when issuing call-off contracts.
This maintains procurement integrity and ensures all suppliers compete on equal terms throughout the framework’s duration.
Parties and Stakeholders in Call-Off Contracts
Call-off contracts involve specific responsibilities between suppliers and customers, with particular significance in public sector procurement.
Various organisations participate in these contractual arrangements, each with defined roles and obligations.
Supplier and Customer Responsibilities
As a supplier under a call-off contract, you’ll have obligations established in both the framework agreement and the specific call-off terms.
Your primary responsibility is delivering goods or services according to agreed specifications and timelines.
You must maintain quality standards throughout the contract period.
Framework agreements typically include performance metrics that suppliers must meet consistently.
Customers must clearly define their requirements when initiating a call-off.
You’re responsible for proper specification development and ensuring compliance with the framework’s conditions.
Payment terms are established in the framework, but specific schedules are often negotiated in individual call-offs.
Both parties should maintain clear communication channels throughout the contract lifecycle.
Risk allocation between suppliers and customers is typically outlined in the original framework documentation, providing certainty for both parties.
Public Sector Organisations Involved
Public sector procurement relies heavily on call-off contracts to streamline purchasing processes.
Central government departments, local authorities, NHS trusts and educational institutions commonly use these arrangements.
As a public sector organisation, you must follow specific procedures when issuing tenders under frameworks.
This includes adhering to procurement regulations while benefiting from simplified processes.
Crown Commercial Service often establishes frameworks that multiple public bodies can access.
When you use these, you essentially leverage pre-negotiated terms whilst maintaining compliance with procurement legislation.
Purchasing organisations may set bespoke conditions within a framework, tailoring call-offs to specific needs.
This flexibility makes frameworks particularly valuable across diverse public sector requirements.
Contracting authorities should include as many terms as possible in the framework documentation to provide clarity for suppliers regarding call-off risks and obligations.
Awarding Call-Off Contracts
The process of awarding call-off contracts requires careful adherence to established procurement procedures.
When using frameworks, you must follow specific rules to ensure compliance with regulations while achieving value for money.
Direct Award Process
Direct awards allow you to select a supplier without running a competition.
Under multi-supplier frameworks, you can only make direct awards when the framework includes an objective mechanism for supplier selection and clearly defines the core terms of call-off contracts.
To make a direct award:
Review the framework terms to confirm direct award is permitted
Follow the objective selection criteria set out in the framework
Complete the Order Form Template (such as Framework Schedule 6 for government frameworks)
Send the signed order form to your chosen pre-qualified supplier
The direct award process provides efficiency for routine purchases or when you need to act quickly.
Public sector organisations must publish award information on Contracts Finder unless the contract falls below specific thresholds (£12,000 for central government, £30,000 for other bodies).
Mini-Competition Procedures
When direct award isn’t suitable or permitted, you’ll need to run a mini-competition among the pre-qualified suppliers on your framework.
The mini-competition process typically involves:
Defining your specific requirements clearly
Inviting all capable suppliers on the framework to bid
Setting reasonable timescales for responses
Evaluating submissions using the criteria specified in your competition documents
Legislation requires you to award the call-off contract to the supplier submitting the best tender based on the award criteria specified in your contract documents.
These criteria must align with those established in the original framework agreement.
Mini-competitions allow you to secure competitive pricing and tailored solutions while maintaining the efficiency of working with pre-qualified suppliers.
Selection and Evaluation Criteria
Your selection and evaluation criteria must be clearly defined at the outset of the call-off process.
These criteria should be:
Proportionate to your requirements
Transparent so suppliers understand how you’ll assess them
Objective to ensure fair treatment of all bidders
Consistent with the framework’s overarching criteria
You may conduct preliminary market engagement where appropriate before awarding a contract, although the formal provisions in the Procurement Act don’t strictly apply to call-offs.
When evaluating responses, focus on both quality and cost factors.
Many frameworks include pre-negotiated pricing with bulk order discounts, making the procurement process more cost-efficient.
Document your evaluation process thoroughly to demonstrate compliance with procurement regulations and justify your supplier selection.
Structure and Terms of Call-Off Contracts
Call-off contracts operate within a structured framework with defined terms that govern how goods and services are procured.
These contracts establish the specific conditions for each individual purchase while adhering to the overarching framework agreement.
Core Contractual Clauses
Call-off contracts contain several essential clauses that define the relationship between buyers and suppliers.
The most significant is the entire agreement clause, which confirms that the contract supersedes any previous agreements between the parties regarding the subject matter.
The Public Sector Contract (PSC) provides standard terms and conditions that form the basis of many governmental call-off contracts.
These establish clear obligations for both parties.
Key clauses typically address:
Payment terms and invoicing procedures
Delivery requirements and timelines
Quality standards and performance metrics
Dispute resolution mechanisms
Liability limits and indemnities
These clauses are tailored to the specific requirements of each call-off while remaining consistent with the framework agreement.
Call-Off Schedules and Orders
Call-off schedules form the backbone of these contracts, detailing the specifics of each procurement action.
An Order Form typically initiates the call-off process, establishing the contract between the authority and supplier on the date it’s signed.
The schedules typically include:
Specification details of goods/services required
Pricing structures specific to the call-off
Service levels and performance indicators
Special terms unique to the particular call-off
Call-off orders provide flexibility by allowing you to request goods or services without committing to specific quantities upfront.
This approach streamlines the procurement process while maintaining the framework’s advantageous terms.
Each call-off can have its own specific conditions, though these must align with the overarching framework agreement.
Duration and Implementation Plan
Call-off contracts have defined lifespans that may differ from the parent framework agreement.
Your implementation plan establishes how and when goods or services will be delivered.
The plan typically outlines:
Start and end dates of the call-off contract
Key milestones and delivery timelines
Testing and acceptance procedures
Transition arrangements at contract conclusion
Implementation plans are particularly important for complex service contracts, as they establish mutual expectations for rollout and delivery.
You’ll need to ensure that timelines are realistic and include contingencies for potential delays.
The duration of call-off contracts is often determined by balancing the need for service continuity with the benefits of periodically reviewing supplier arrangements.
Most call-offs include provisions for extensions under specific circumstances.
Key Legal and Commercial Considerations
When establishing call-off contracts under frameworks, several crucial legal and commercial elements require careful attention to protect your organisation’s interests.
These considerations form the foundation of a robust agreement that will govern your relationship with suppliers throughout the contract lifecycle.
Service Levels and Performance
Service Level Agreements (SLAs) in call-off contracts define the measurable standards that suppliers must meet.
You should ensure these are specific, measurable, achievable, relevant and time-bound (SMART).
Key components to include in your SLAs:
Performance metrics: Clearly defined KPIs that align with your business objectives
Measurement methodology: How performance will be monitored and reported
Remedies for failure: Escalation procedures, service credits or other financial remedies
Regular performance reviews should be scheduled to assess supplier delivery against agreed metrics.
This provides opportunities to address any issues before they escalate into more significant problems.
Consider implementing an incentive mechanism that rewards exceptional performance.
This creates a positive relationship dynamic rather than one solely focused on penalties.
Liabilities and Insurance
Appropriate liability provisions and insurance requirements protect your organisation from potential risks associated with supplier performance failures.
Your call-off contract should clearly define:
Liability caps: Reasonable financial limits on supplier liability, typically linked to contract value
Exclusions: Areas where standard liability limitations don’t apply (e.g., data breaches, IP infringement)
Insurance requirements: Specific types and levels of coverage suppliers must maintain
Most frameworks establish baseline insurance requirements. You should assess whether these adequately cover your specific call-off contract risks.
Higher-value or higher-risk contracts may warrant increased coverage levels. Seek legal advice when establishing liability provisions to ensure they’re enforceable under UK law.
Courts may invalidate excessive limitations of liability, particularly for negligence or willful misconduct.
Governing Law and Notices
Clear governing law provisions and notice procedures ensure certainty and effective communication throughout the contract lifecycle.
Your call-off contract should specify:
Applicable law: Typically English law for UK public sector contracts
Jurisdiction: Which courts will handle disputes (usually those of England and Wales)
Notice procedures: How formal communications must be delivered
Authorised recipients: Designated individuals or departments for receiving notices
Notice provisions should include acceptable delivery methods (email, post, courier) and when notices are deemed received. This prevents disputes about whether critical communications were properly delivered.
Consider including alternative dispute resolution mechanisms before litigation. Mediation or expert determination can resolve issues more quickly and cost-effectively than court proceedings.
Contract Management and Exit Management
Effective contract and exit management provisions ensure smooth operations throughout the contract lifecycle and appropriate transition at termination.
For contract management, include:
Governance structure: Regular review meetings and escalation procedures
Change control process: Formal mechanisms for contract modifications
Record-keeping requirements: Documentation standards for both parties
Exit management provisions should address:
Knowledge transfer: How supplier expertise will be conveyed to you or successor suppliers
Asset transfers: Processes for returning or transferring physical and digital assets
Transition assistance: Specific supplier obligations during handover periods
Require suppliers to maintain exit plans that are regularly updated and tested. This ensures readiness for contract termination under any circumstances.
Consider including step-in rights that allow you to assume direct control of critical services if the supplier fails to perform adequately. This provides business continuity while you arrange permanent solutions.
Special Scenarios and Risk Management
Call-off contracts under government frameworks require robust risk management approaches to handle various scenarios that may arise during their lifecycle.
Effective strategies for business continuity, dispute handling, and regulatory compliance are essential to protect both buyers and suppliers from potential complications.
Business Continuity and Disaster Recovery
Business continuity planning is crucial for call-off contracts, especially in public procurement. You should identify potential disruptions that could affect service delivery under your framework agreement.
Establish clear protocols for how services will continue during unexpected events such as supplier financial difficulties, natural disasters, or major operational disruptions. Document these protocols explicitly in your call-off contract terms.
Consider including specific service level agreements (SLAs) that address:
Response times during disruption scenarios
Backup systems and alternative delivery methods
Data recovery procedures if applicable
Communication channels during emergencies
Risk assessment matrices help you quantify the likelihood and impact of different disruption scenarios. Use these tools to develop proportionate mitigation strategies.
Dispute Resolution Mechanisms
Effective dispute resolution mechanisms prevent minor disagreements from escalating into costly formal proceedings.
Your call-off contract should clearly outline a stepped approach to resolving conflicts. Begin by defining what constitutes a dispute and the notification process.
Include these key elements in your dispute resolution provisions:
Initial manager-to-manager discussion timeframes
Escalation pathways to senior leadership
Mediation options before litigation
Specific jurisdiction and applicable law
Alternative Dispute Resolution (ADR) methods like mediation often provide faster and more cost-effective solutions than litigation. You may wish to make these mandatory steps before either party can initiate court proceedings.
Compliance and Regulatory Issues
Public sector call-off contracts face particular scrutiny regarding compliance with procurement regulations. You must ensure your contract adheres to the relevant legal frameworks that govern public purchasing.
Transparency obligations are especially important. Document all decisions related to supplier selection from the framework and maintain clear audit trails of the call-off process.
Consider these compliance aspects:
Data protection requirements including GDPR implications
Industry-specific regulations that may apply to your contract
Reporting obligations to oversight bodies
Changes in legislation during the contract period
Regular compliance reviews throughout the contract lifecycle help identify potential issues before they become serious problems. Build flexibility into your call-off terms to adapt to regulatory changes without needing to terminate and restart the procurement process.
