What is a Dynamic Purchasing System?
You'll likely know what a procurement framework is. Its cousin, the Dynamic Purchasing System (DPS), is slightly different. Learn about a DPS here!
Put simply, a Dynamic Purchasing System (DPS) is a procurement tool for works, services and goods. It is run as an entirely electronic two-stage process. Using a DPS can help speed up and streamline procurement for suppliers and buyers and the award of tenders can be quicker. Read on to find out whether a DPS might be a fit for you!
What is a Dynamic Purchasing System?
A DPS is a procurement tool for works, services and goods. It is similar to an electronic framework agreement, but new suppliers can apply to join at any time. Dynamic Purchasing Systems are run as an entirely electronic, two-stage process.
All contracting authorities, including central government purchasing bodies, can set up a DPS. During the initial setup stage, all suppliers who meet the set criteria will be admitted to the DPS and there is no limit on how many suppliers may apply to it. The second stage is where contracts are awarded. The contracting authority invites all suppliers on the DPS or within the relevant category to bid for the contract.
How a Dynamic Purchasing System works
Once you have found an opportunity it is always recommended that you read as much information provided by the buyer. Depending upon the type of tender, the process can be slightly different. For a DPS, the process would look like this:
1. Finding the opportunity
Once you have found an opportunity, you can express your interest through the portal and receive more information along with the option to download the tender documents. You should then review the tender documents in detail and decide whether it is worth your time and resources.
An important factor here that differentiates a DPS from other tenders is the way it may not have a closing date. You may also find that it will have a closing date, but it will be reopened regularly. So if you did miss it you can keep an eye on it coming back soon!
2. Applying for the opportunity
Suppliers will then be required to complete the tender documents to become approved. This is typically shorter and less work for a dynamic purchasing system. If accepted onto the DPS you’ll be notified along with other suppliers.
3. The bidding process
Once the DPS is Live, the buyer can then submit their specific project requirements for all of the suppliers to bid for those works. This is often called a ‘call-off’ or a ‘mini competition’.
Suppliers at this point can evaluate the projects published and decide whether or not to tender for them. If you wish to go for a bid, you will put your tender and price in and await the outcome from the buyer.
How is a DPS different to a framework?
Since not all frameworks are the same, it is difficult to determine clear-cut differences between the two procurement routes. However, there are a few clear distinctions when comparing a DPS to most frameworks currently on the market:
|Dynamic Purchasing System||Framework|
|Suppliers can join at anytime||Suppliers can join within a limited application window|
|No direct award of contracts||Buyers can direct award (sometimes)|
|Pricing determined at the contract award stage||Pricing fixed at the point of tender|
|Unlimited suppliers may join||Number of suppliers decided before procurement|
Why use a DPS?
There are pros and cons to using a DPS above a framework, outlined below.
|Suppliers are able to apply to join at any point, increasing the range of competition through the life of the DPS||Purchase by further competition only. Direct award not permitted|
|Unlimited numbers of suppliers and unrestricted access to smaller suppliers||You have to check supplier credentials before awarding a contract.|
|A DPS is not limited to a maximum term of four years|
|You can filter by different requirements to find suppliers to complete your requirement|
|You can shape your competition, contract type and terms (within limits)|
|Suppliers self-certify making joining quick and simple.|
If suppliers can join at any time, it avoids supplier lockout. However, when it comes to limited supplier frameworks, suppliers have an edge over the competition. Fewer suppliers equal less competition. Using a DPS can also help speed up and streamline procurement for suppliers and buyers and the award of tenders can be quicker than some other procurement procedures.
Ultimately, the specific needs of the contracting authority should determine the procurement vehicle for a buyer. For suppliers, on the other hand, we advise carefully evaluating all opportunities. A new route to market can quickly become a backbone of your business success, so don’t rule a DPS or a framework out before you have done your due diligence.
Upcoming Dynamic Purchasing Systems
As of June 2022, these are the upcoming DPSs from CCS.
- Facilities Management and Workplace Services DPS – expected to go Live Nov 2022
- Fund Administration & Disbursement Services DPS (FAADS) – expected to go Live Dec 2022
- Demand Management & Renewables (HELGA 2) DPS – expected to go Live Nov 2023
Overall, using a DPS provides a simple, straightforward form of access to contracts for suppliers. When applied appropriately, it is a cost-effective method that can limit the need for complex tender processes and benefit both suppliers and buyers. We recommend using them as a procurement vehicle alongside frameworks!