eProcurement 101: Dynamic Purchasing Systems (DPS)

Technology has enabled the public sector to purchase more efficiently using bespoke software.

To stay compliant with Regulation 22 and to gain flexibility during the procurement process, many public sector buyers are choosing to procure using a Dynamic Purchasing System (DPS).

We explore the many ways your organisation can use a Dynamic Purchasing System and the benefits of using this method of eSourcing below.

What is a DPS?

The Dynamic Purchasing System (DPS) is an electronic procedure that can be used by the public sector to procure works, services and goods commonly available on the market. The public sector is increasingly choosing this method to release contracts over more traditional methods such as framework agreements.

The main difference between a framework agreement and a DPS is that rather than all potential suppliers having to join the framework agreement at its inception, new suppliers can join the DPS at any time, making the latter a more flexible way to procure for both buyers and suppliers.

DPS regulations

The regulations that surround Dynamic Purchasing Systems are outlined in the Public Contracts Regulations 2015.

When looking to use a DPS, organisations must observe the three rules outlined below:

  • A DPS can only be created by a contracting authority (this includes central purchasing bodies)
  • A DPS should only be created for identified types of requirements
  • Suppliers must be able to apply to join a DPS for free

Another unique feature of DPS which should be considered is that contracting authorities cannot impose a limit on the number of suppliers that may join a DPS. Any supplier applying to join a DPS must be assessed by the contracting authority within ten working days of their application.

What are the benefits of using a DPS?

DPS is completely electronic. This Delta eSourcing module allows buyers to procure goods, works or services that are commonly available on the market.

The benefits of going paperless and opting for an eProcurement solution like a Dynamic Purchasing System include:

  • Suppliers can join a Dynamic Purchasing System at any time. This means buyers have access to the freshest suppliers in the marketplace, which is beneficial if your organisation wants to find SMEs and start-up suppliers that may be new to the procurement process.
  • There is no direct award of contracts; pricing is determined at the contract award stage.
  • There is no limit to the number of suppliers permitted to join a DPS – this gives buyers a bigger pool of suppliers to choose from.
  • As a DPS is electronic it has a fully automated evaluation process and a one-touch email can be sent to multiple suppliers.
  • On top of this, DPS boasts easy creation, implementation and ongoing management for those procurement professionals using the tool.

As mentioned above, Dynamic Purchasing Systems can make the marketplace more competitive. This ‘open system’ format also aligns with the Government’s initiatives encouraging public sector organisations to work with suppliers of all sizes.

Using a DPS can support your buying organisation in working with both large and small suppliers and help it meet the Government’s aspiration of spending £1 in every £3 with SMEs.

 

Local Government Association on DPS

In recent years the Local Government Association (LGA) has been working with councils through its National Advisory Group for Local Government Procurement to try and understand the reasons for the limited uptake of Dynamic Purchasing Systems so far.

The LGA has published ‘A guide to Dynamic Purchasing Systems within the public sector: Is it right for you and your suppliers?’. In the report’s introduction Councillor Ron Woodley notes that using a DPS is one way of overcoming the ‘barrier’ of not being able to add new suppliers when using framework agreements.

Within the document Mr Woodley expresses his surprise that the use of DPS is still relatively low, despite its advantages over traditional framework agreements. He notes:

“I would encourage all councils to take the opportunity to review their procurement systems in line with the information set out in this guide to assess if using DPS arrangements provides greater opportunity beyond traditional approaches to public sector procurement for both you and your suppliers.”

 

 

Reasons to use a DPS

With that guidance from the Local Government Association in mind, is it time for your organisation to explore its eProcurement options?

If you are considering investing into a DPS solution and want to learn more about the process, we highlight the main reasons why your organisation should opt for DPS below:

 

  • The awarding of tenders can be quicker than with some other procurement procedures.
  • DPS offers more flexible procurement as suppliers can be added at any time.
  • DPS procurement exercises can help get the best price, and the benefits are quantifiable.
  • You can attract new and innovative suppliers so it’s not just the ‘usual suspects’.
  • The process is streamlined as suppliers only need to enter their details once – there is no need for them to repeat their credentials at every tender.
  • Clear auditing: your organisation has an electronic copy of which suppliers have applied, which have been pulled through, and which have been sent invitations to tender.
  • Having an online portal supports a quicker evaluation process.

 

DPS demo

Discover how this efficient procurement tool can be tailored to support the needs of your procurement team.

We don’t believe in one-size-fits-all; Delta eSourcing gives users the flexibility to choose from a range of eProcurement modules.

If you would like to find out more about Delta’s Dynamic Purchasing System module, request a free demo with a member of our expert procurement team.

Request FREE demo

 

eProcurement 101

Have you been keeping up with our eProcurement 101 webinar series?

We want to support your organisation’s procurement journey. This live webinar series is designed for procurement professionals who want to streamline their eProcurement strategy and learn more about how our solutions can help them do this.

Along the way we debunk many of the myths around eProcurement, discussing everything from cyber security to GDPR.

Find out when our next webinar is happening here and register for FREE!