Why are we seeing more Dynamic Purchasing Systems?
Dynamic Purchasing Systems are a great procurement tool. The public sector seems to have picked up on this, as DPSs are on the rise! Find out why.
What is a DPS?
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.
So why are we seeing more DPSs?
In 2017, the Local Government Association released “A guide to Dynamic Purchasing Systems within the public sector”, in which they stated that Dynamic Purchasing Systems should become ‘a more considered and used option in public sector procurement’.
Below are some of the advantages to using a DPS and why we think they are now becoming more accessible.
More streamlined procurement
The procurement process via a DPS is more streamlined. For example, suppliers are able to self-certify, making joining much simpler. It requires about the same level of information as for a “Pre- Qualification Questionnaire”. The award of tenders can also be quicker than some other procurement methods.
The range of buyers
Buyers found on a DPS tend to be organisations with targeted areas of spend, but they have been used by a wide range of public bodies. For example, the NHS London Procurement Partnership DPS has been used for school expansion projects and the London Construction Programme DPS is specifically designed to be used by multiple organisations.
Being accepted onto a DPS does not guarantee suppliers will win work. But it will offer tender opportunities you wouldn’t have sight of any other way.
The range of suppliers
Smaller and new suppliers are the target market for a DPS. A buying organisation that has selected a DPS for its procurement activities is flagging up it is interested in engaging with SMEs. The diverse pool of suppliers gives the public sector the potential to increase access to harder-to-reach suppliers.
Using a DPS as a buyer can aid in keeping options open. Before a procurement contract is in place, often suppliers must be deemed appropriate for the market. With the long lifetime of a DPS and the ability for suppliers to join at any time, buyers can re-visit the listings for more supplier options.
On limited supplier frameworks, by definition, there is less supplier competition. A DPS allows an unlimited number of suppliers to apply, as the idea is the active supplier listings will be spread over the DPS’ lifetime. This increases the range of competition throughout the life of the DPS, encouraging focus and differentiation. Suppliers can shape their competition, contract type and terms (within limits).
There is no cut-off period
Speaking of a DPS’ lifetime, it is not limited to a maximum term of four years the way most frameworks are. Instead, it will be open throughout its lifetime to provide suppliers with access to a range of buyers and vice versa.
There is no ‘closing’ date
Suppliers may apply to be on a DPS at any point, avoiding supplier lockout. Once accepted, you can tender for opportunities within the lot(s) you have been appointed to through a ‘mini competition’. You can then select to bid for the specific projects that are right for you.
Overall, using a DPS provides a simple, straightforward form of procurement for both suppliers and buyers. For suppliers, a new route to market can quickly become the basis of your business success. We advise you don’t rule out a new DPS or framework before doing your due diligence!
To buyers, we advise evaluating your specific needs. A DPS may be the right procurement route if you have a specific area of spend or you’re looking to diversify your supplier pool.
When applied appropriately, a DPS is a cost-effective method that can limit the need for complex tender processes. It is no wonder that we are beginning to see more of this particular procurement route in the public sector!