The commercial currency of construction framework agreements

A critique is presented of construction client-main contractor framework agreements. In the midst of an unpredictable and volatile construction environment, the commercial currency of collaborative working practice, and by extension framework agreements, is being put under increasing management scrutiny. Drawing on a literature review, the guiding principles of framework agreements are examined. A dramatic downturn in construction demand has created considerable surplus in supply. Under such conditions the buyer-supplier interdependencies become imbalanced and commercial relationships fraught. Reports by construction industry analysts demonstrate a number of private sector clients rejecting framework agreements in favour of traditional competitive procurement practices. Drawing upon a neoclassical lens, three guiding principles embedded within economic orthodoxy are employed to examine business-to-business tensions within construction framework agreements, namely, individualism, instrumentalism and equilibrium. This neoclassical interpretation of construction framework agreements reveals a potential relational management bias within mainstream rhetoric. Notably, providing a complementary account of framework agreements practice should not be construed as a rejection of collaborative working practices. An alternative account of framework agreements is presented that does not rely upon the mainstream behavioural model of contemporary contracting.