What is a Dynamic Purchasing System?

Dynamic Purchasing System on a computer

Many procurement professionals have stated that increasing use of Dynamic Purchasing Systems (DPS) could mean the end of framework agreements in public procurement, but what are Dynamic Purchasing Systems and how do they work?

The Dynamic Purchasing System (DPS) is a procedure available for contracts for works, services and goods commonly available on the market. It is a completely electronic process.

It is rather like an electronic framework agreement, but with one important difference: rather than all potential suppliers having to join at the inception of the agreement, new suppliers can join at any time.

What organisations use Dynamic Purchasing Systems?

Dynamic Purchasing Systems are used by public sector organisations only.

The regulations that surround Dynamic Purchasing Systems are stated in the Public Contracts Regulations 2015. The following three rules must be followed by public sector buyers:

  • A DPS can be created by contracting authorities, including central purchasing bodies
  • A DPS should only be created for identified types of requirement
  • Suppliers must be able to apply to join a DPS for free

Dynamic Purchasing Systems setup stage

Suppliers who meet the selection criteria are automatically admitted to a DPS, making the process more efficient.

Contracting authorities cannot impose a limit on the number of suppliers that may join a DPS. This gives buyers a bigger pool of suppliers to choose from, making the marketplace more competitive.

All suppliers must be assessed by the contracting authority within 10 working days of their application.

Dynamic Purchasing Systems second stage

During the second stage, individual contracts are awarded. The authority invites all suppliers on a DPS to bid for the specific contract.

How can a DPS benefit your organisation?

There are many benefits of using a DPS. Not only do Dynamic Purchasing Systems streamline the procurement process for both suppliers and public sector buyers, but the method is also more flexible than a framework agreement.

The advantage to suppliers is that they do not need to demonstrate suitability and capability every time they wish to compete for a tender.

This speeds up the process and the buyer can award individual tenders more quickly than is possible using other procedures.

Suppliers can also join the process at any time during its period of validity. This creates a more open marketplace than traditional frameworks offer.

How can Delta help?

Is your organisation working towards public sector targets? The UK Government wants 33% of direct and indirect procurement spending to reach SMEs by 2020. Dynamic Purchasing Systems reduce the red tape that might deter smaller firms’ applications for public sector work with organisations such as yours.

Tender Management or eTendering systems are beneficial for both buyers and suppliers. If you would like to find out more about Dynamic Purchasing Systems, contact us or request a free demo today.

Delta can help your organisation become more SME accessible and streamline your procurement process at the same time.