Busting Dynamic Purchasing System Myths

Delta eSourcing has introduced its Dynamic Purchasing System (DPS) Manager module, helping buyers to quickly and efficiently procure goods, works and services commonly available on the market from a refreshable pool of suppliers. BiP Solutions journalist Julie Shennan has secured an exclusive interview with Procurement Advice and Support Service Principal Consultant Eddie Regan to provide clarity for those still unsure of what a DPS is.

 

What is a Dynamic Purchasing System?

Addressing the most common misconception surrounding DPS, Mr Regan explained that DPS are not frameworks; instead, a DPS is a live system where organisations  express their interest by completing the selection stage requirements, including submitting a completed European Single Procurement Document.

Each time an authority wants to procure from the DPS they can invite everyone who has successfully complied with the selection criteria and can fulfil that specific tenders’ requirements.

He clarified: “In a framework there is a closed marketplace once the tender process has been run; however, with a DPS there is just the first selection stage and no tender process is undertaken until the buyer intends to buy through it.

“Some people describe a DPS as a living framework, but it is more like a living list of pre-approved suppliers that are willing to participate in a contract and have complied with the selection requirements.

“It is a system without a time limit; you could have a DPS that lasted 20 years if you wanted, because you are not actually putting a tender live until you intend to buy from its system.”

 

When is it best to use a DPS?

With such a flexible structure, Mr Regan explained when DPS are beneficial.

He said: “DPS are best suited to a market where there is a controlled supplier base. If a new provider comes onto the scene then they can join; likewise, other suppliers can drop out as and when they choose without disrupting the structure of the procurement arrangement.

Mr Regan added: “DPS has been used by a number of authorities to buy things like bus or taxi services in rural areas.

“A DPS can offer real benefits where buyers have only a small marketplace that perhaps they would want to grow over time to bring greater competition. ”

 

How have DPS changed recently?

The original idea behind DPS was to enable buyers to use them as electronic catalogues, but now DPS have developed into holistic route to market solutions.

Another change is that DPS applicants no longer need to submit indicative tenders (proposing working terms and pricing) with their request to join.

Mr Regan said: “Under the old DPS system buyers ran a full tender exercise in the open procedure, so they knew exactly what was being offered by each of the suppliers; however, under the new process buyers are required to use the Restricted procedure and effectively all they are doing is running the selection stage; to ensure that the right companies apply, it is essential that buyers make their tender briefs as crystal clear as they can, to save valuable time and resources for all parties.”

Previously a buyer would have to run an open procedure tender exercise at the start and a mini competition if they were procuring thereafter. The new DPS structure means that on each occasion that the buyer wishes to procure from the DPS, suppliers have to undertake a tender exercise, the complexity of which is down to the contracting authority.

Another DPS development is the change of timescales surrounding the route to market.

Mr Regan said: “The timescale for the initial selection stage is 30 days from the OJEU advertisement and thereafter anyone not already on the DPs or even someone who was previously rejected for inclusion, has the right to apply to join the DPS at any time.”

He added: “The tender period is defined as ten days although it is possible for authorities to extend this with justification; it’s critical that authorities think proportionally about what they are asking suppliers to complete, therefore reducing the complexity to a suitable level.”

 

How Delta can help

To deal with tighter DPS timescales Mr Regan stressed the importance of using an efficient e-procurement solution.

He said:  “DPS are wholly electronic processes, so buyers must find a good, robust electronic system such as Delta’s DPS Manager, on which suppliers can apply at any time. Buyers must also seek a system that can control the selection process, run the tender procedures, host a list of prospective future bidders, and provide an audit log.

 “A DPS can now be open for ten or twenty years; this highlights the need for an e-procurement solution that can host lengthy audit trails. These audit trails will keep track of everything that has been done and ensure that the DPS is fair for its duration.”