What framework rates actually are

When a supplier is appointed to a framework, it submits a rate card: a schedule of rates for the services covered by its lot. These rates are typically expressed as hourly or daily rates by role (engineer, supervisor, manager, cleaning operative, security officer), sometimes supplemented by unit rates for specific tasks or fixed price models for defined service bundles. The rate card is submitted as part of the framework evaluation. It is scored on price. It becomes part of the framework agreement. It is published to buyers as the maximum rate the supplier can charge for call off work through the framework. The critical word is maximum. Framework rates are ceiling rates. They represent the highest price the supplier is permitted to charge. They do not represent the price the supplier expects to be paid. They do not represent the market rate for the service. They do not represent the cost of delivery plus a reasonable margin. They represent the upper boundary of a negotiation range that has not yet begun.
The Ceiling Parameter Realignment Framework rates are ceiling rates. They represent the highest price the supplier is permitted to charge, not the price they expect to be paid. The gap between the two is where the real commercial negotiation happens.

The sharpening dynamic

Suppliers who understand framework pricing submit high. Not recklessly high. High enough to preserve commercial flexibility at call off. The logic is straightforward: the framework rate sets the ceiling. Every call off negotiation starts from that ceiling and moves downward. A supplier that submits a low framework rate has locked itself into a low ceiling with no room to negotiate. A supplier that submits a high framework rate has preserved space to discount at call off and still look competitive. This creates the sharpening dynamic. Framework rates are submitted at a level that anticipates discounting. The supplier knows the rate card will be sharpened at call off. The buyer expects to negotiate below the published rate. The framework body knows both parties understand this. The rate card is not a price list. It is a starting position. The practical consequence is that framework rate cards are structurally inflated relative to the actual prices paid on call off contracts. The degree of inflation varies by supplier, by lot, and by service category. But the direction is consistent: framework rates are higher than call off prices. Always.
Typical discount from framework ceiling rates to actual call off contract prices on major UK FM frameworks ranges between 15% and 30%. The rate card is the starting position, not the outcome.

The benchmarking problem

Buyers who benchmark against framework rates are benchmarking against a number that was designed to be the maximum. A buyer who accepts the framework rate without negotiation is paying the ceiling price. A buyer who benchmarks their current contract against the framework rate card and concludes their existing provider is competitive may be comparing against an inflated reference point. This matters because framework rate cards are often used as evidence of market rates in business cases, budget submissions, and procurement approval documents. A procurement team presenting a business case for a new FM contract may cite the framework rate card as evidence that their proposed contract price represents value for money. If the framework rate is 20% higher than the actual market price at call off, the business case is built on a misleading benchmark.

The BCIS parallel

The BCIS Intelligence Series examines an identical dynamic in cost benchmarking data. BCIS publishes OpX operating cost benchmarks that buyers and suppliers use to challenge or defend FM contract pricing. The BCIS Intelligence Series demonstrated that OpX data is often used as a cost cap rather than a challenge reference, and that the benchmarking methodology has limitations the market has not confronted. Framework rate cards create the same risk: a published number that looks authoritative but does not represent the actual market price.
The Framework Reckoning Infographic Article 6

The blended rate problem

Framework rate cards are typically structured by role: an hourly rate for an engineer, a daily rate for a supervisor, a rate for a project manager. These individual rates are submitted at framework level based on generic role definitions. They do not reflect the actual skill mix required on a specific contract. An FM contract for a complex hospital estate may require specialist HTM qualified engineers, BMS technicians, and L8 water treatment operatives. The framework rate card has a single rate for an engineer. The actual cost of deploying a specialist engineer with HTM qualifications is higher than the generic rate. The supplier must either absorb the difference or negotiate a higher rate at call off, which may exceed the framework ceiling for that role category. The blended rate problem is compounded on Total FM contracts where the service scope includes both Hard FM and Soft FM. The framework rate card may have separate rates for each category, but the operational reality of a TFM contract is that roles blur: a site supervisor manages both cleaning operatives and engineering technicians. The rate card does not accommodate this. The call off pricing must. The SFG20 Reckoning series demonstrated that SFG20 task durations, which are frequently used as the labour basis in framework pricing models, do not reflect site specific conditions. A supplier that prices Hard FM labour from SFG20 defaults at framework level and then discovers that the actual productive wrench time on a specific estate is 25 to 33% lower than the SFG20 assumption has a pricing gap that the framework rate cannot close.

The TUPE pricing trap

FM contracts carry workforces. When a contract is re tendered through a framework call off, the incoming supplier must price the TUPE transfer of the existing workforce. TUPE requires the new provider to take on employees on their existing terms and conditions: pay rates, shift patterns, pension entitlements, and contractual benefits. Framework rate cards are submitted at appointment, years before any specific TUPE population is known. The rate card rates are based on the supplier’s standard employment model: their own pay scales, their own pension scheme, their own terms. The TUPE workforce may be on completely different terms: legacy pay rates from a previous employer, a defined benefit pension scheme, enhanced holiday entitlements, or contractual overtime arrangements that exceed the incoming supplier’s standard model. The gap between the framework rate and the actual TUPE cost can be substantial. A framework rate card that assumes a cleaning operative at £12.50 per hour may face a TUPE population where the actual rate, including legacy enhancements, is £14.80 per hour. On a contract with 200 cleaning operatives, that £2.30 per hour gap represents over £900,000 per year in additional cost that the framework rate does not cover.
The TUPE Baseline Disconnect Framework rates are priced on the supplier’s standard employment model. TUPE workforces are on the previous employer’s terms. The gap between those two positions can make the difference between a profitable contract and a loss making one. The framework rate card does not account for it.
The PFI Reckoning Article 8 examines the TUPE and pension dimensions in detail, including Fair Deal obligations, Employee Liability Information requirements, and the practical reality of inheriting a workforce that has been employed on PFI terms for 25 years. The same dynamics apply, at smaller scale, to every framework call off that involves a TUPE transfer.

Management fee models on TFM frameworks

Total FM frameworks often use a management fee pricing model rather than a rate card model. The supplier submits a management fee percentage that represents their overhead and profit on the contract. The direct costs (labour, materials, subcontractors) are passed through at cost. The management fee is the supplier’s commercial return. In this model, the framework rate is not a rate at all. It is a margin percentage. The actual contract cost is determined by the direct costs, which are unknown at framework appointment and only become visible at call off when the specific estate, the TUPE population, and the service scope are defined. A buyer who compares management fee percentages across framework suppliers is comparing margins, not prices. A supplier with a 6% management fee and high direct costs will produce a higher total contract price than a supplier with an 8% management fee and lower direct costs. The framework evaluation that scores the lower management fee as the better price is measuring the wrong number.
What This Means for Buyers and Suppliers
  • For Buyers: Never accept a framework rate card as a benchmark without understanding what it represents. Request actual call off pricing data to understand the gap between published rates and actual prices paid.
  • For Suppliers: Price framework rate cards strategically. Submit rates that give commercial flexibility at call off without triggering price outlier flags at framework evaluation.

The illusion and the reality

Framework rates look like prices. They are published, scored, and referenced as if they represent what the market charges. They do not. They represent what the market is permitted to charge at maximum. The actual price is negotiated at call off, shaped by TUPE costs the rate card does not anticipate, skill mixes the rate card does not reflect, and competitive dynamics the rate card does not capture. Buyers who use framework rates as benchmarks overestimate the market price. Suppliers who submit framework rates without modelling the call off reality lock themselves into positions that may be commercially unsustainable. The pricing illusion benefits nobody except the framework body that can point to the rate card as evidence of competitive pricing without being accountable for the gap between the card and the contract.
The Accountability Gap The next article examines another gap between framework promise and delivery reality: social value. The commitments scored at framework appointment, the outcomes tracked at call off delivery, and the accountability void between the two.