Dynamic Purchasing Systems (DPS) have become increasingly prominent in procurement in recent years in both the UK and in European countries – this is because a DPS enables for wider competition and better flexibility in procurement. Brexit will have an impact on the use of the DPS in the UK as the government intend to increase the flexibility of the current DPS in upcoming public procurement reforms. Currently, the DPS falls under the law of the Public Contract Regulations 2015 which sets out mandatory time frames and rules for the open procedure. This article aims to explain what a DPS is and how it operates, why a DPS is different to framework agreements, and why it is an advantageous procurement tool.
What is a DPS and how does it operate?
A DPS is an entirely electronic procurement process for common goods and services. The UK government intends to rebrand the DPS as the ‘Dynamic Market’ which will not be limited to commonly used purchases and will be available for use with all types of works, services and goods procurement within the scope of the new procurement legislation to be introduced in 2022 or 2023. It operates in two stages – in the first stage all suppliers meeting the selection criteria are admitted to the system; in the second stage the contracting authority awards contracts to those admitted to the system. A DPS is an open system – meaning that economic operators can apply to be admitted to the system at any time. This feature makes it a flexible procurement tool and it increases competition across the board. This is advantageous for both contracting authorities and suppliers as contracting authorities can constantly compare new suppliers in the market, and suppliers can compete for contracts at all times. This is a notable departure from framework agreements as framework agreements do not allow the admission of other suppliers after the conclusion of the agreement.
Suppliers are required to complete a Pre-Qualification Questionnaire (PQQ). The PQQ is used to assess a supplier’s technical and professional ability, they are usually a straightforward exercise in order to allow a supplier to proceed to the next stage of the procurement. A number of core questions will be asked relating to technical and professional ability and economic and financial standing – but the questions are brief. Suppliers should make sure to include key information from previous contracts where necessary and double check they have supplied the correct information even in the simpler ‘yes or no’ sections. Notably, there is no direct awards process, a competition must be run. The contract must be awarded on the basis of MEAT – Most Economically Advantageous Tender – on the basis of the award criteria.
Why is a DPS advantageous?
One of the key benefits of the DPS for suppliers is that there are mechanisms in place to ensure transparency throughout the procurement process. Under a DPS, suppliers are offered unrestricted and direct full access to the procurement documents for as long as the system is valid. All admitted participants are invited to submit a tender for each specific procurement under a DPS and contracting authorities must inform suppliers whether their request to participate has been admitted at the earliest possible opportunity.
Another benefit is that suppliers do not have to demonstrate suitability every time they wish to compete for a contract. If a supplier fails the PQQ stage of procurement under a DPS, they are still entitled to apply again at a later date. The DPS is also quicker than running a full procurement procedure. There are no limits to how long a DPS can be established for as there are also no restrictions to the number of suppliers that can participate, providing they meet the specified requirements. Furthermore, the DPS often attracts suppliers that otherwise would have been put off by bigger framework contracts.
Quigg Golden Comment
The use of DPS has allowed buyers to expand their network of suppliers on a continuous basis in order to meet changing needs. This means that public sector contracts are more accessible to suppliers than under framework agreements. Suppliers should be keen to get admitted onto the DPS system for work, there is an increasing amount of competitive DP opportunities available across the construction and procurement industry – and Quigg Golden is on top of them. We can advise how to win more work using the DPS. Edward Quigg leads the procurement team – if you need further information do not hesitate to contact him.
We will be looking at social value in procurement soon, so stay tuned.
Published 20 February 2024
