Framework agreements in Uruguay: towards an optimal acquisition strategy in public procurement

This paper analyzes demand aggregation in public procurement using framework agreements. It describes alternative designs based on the experience of different countries, extends in the case of Uruguay, and identifies gains and challenges in a context of dynamic growth of ICTs in public procurement systems. A conceptual model of game theory is introduced to explain incentives to go on in the development of framework agreements, as well as some considerations to optimize its design. First results obtained for the Uruguayan case show relevant savings in the substitution of traditional procedures, not only in terms of financial costs -with reductions in average unit prices between 14% and 40%- but also referred to optimization of resources and transaction costs – with an estimated reduction of almost 70 days in the overall duration of the acquisition procedure, as well as in the number of hours and employees involved-. Finally, externalities on supply and possible lines of action are identified from the first lessons learned.