Dynamic Purchasing System Explained

What is a dynamic purchasing system?

Dynamic purchasing systems are an increasingly common procurement method, but unfortunately not many suppliers, and buyers, are fully aware of them. Or, understand their advantages and disadvantages.

In our simple guide we explore everything you need to know about them, including a simple definition of what they are, how you can find the opportunities, the pros and cons, and most importantly how to successfully get onto one for maximum business success.

A dynamic purchasing system (DPS), is an electronic method of procurement, used for the supply of goods and/or services. It’s different to traditional procurement routes as it operates an ‘open market’ for suppliers to join either constantly or very frequently. This allows buyers to continually expand their network of suppliers and welcome new businesses that can meet their changing needs.

DPS tenders are most popular in public sector procurement, created to help streamline procurement processes, provide greater flexibility, and speed up contract awards with a fully electronic route to market.

Finding DPS opportunities can often be time-consuming. With Thornton & Lowe's free Tender Pipeline software however, you can easily be presented with all available DPS agreements across the UK.

Our new feature allows you to specifically select the DPS tab, search by location and use advanced search options where necessary.

Should I tender for a dynamic purchasing system?

There’s an increasing number of dynamic purchasing system opportunities available for businesses of all sizes and industries. So whilst ultimately there’s no guarantee of contracts, you still have to be in it to win it!

Being on a DPS can be of benefit to many SMEs, offering a foot in the door for public sector work. As bid writing experts we help many businesses reap the benefits of tenders of all kinds, providing guidance and expertise for maximum success.

Expert Tip: Do your research! Is there any information about a previous DPS that the buyer has, who else was on it? How much work was tendered for through it? Who is likely to be your competitors?

If you need more expert tips, guidance and services then get in touch with our team today.

How a dynamic purchasing system works

One of the main benefits of a dynamic purchasing system is that it is open for suppliers to join it on a frequent basis, so suppliers aren’t restricted to wait another year, or four, until the next procurement cycle.

Of course, similarly to all tenders the first challenge is to actually find the right tender, framework or DPS opportunity. There’s a number of tender software options out there to scour the market, including our purpose built Tender Pipeline software which pulls all live tenders into one simple to use tool. It also allows you to sign up to receive email notifications of specific contract opportunities tailored to your searched keywords so you won’t miss out!

Once you have found an opportunity it is always recommended that you read as much information provided by the buyer and distinguish whether it is worth progressing for. They are typically; one-off project tenders, framework agreements, or dynamic purchasing systems. Depending upon the type of tender the process here after can be slightly different.

So, for a dynamic purchasing system it will be as follows;

• You find the opportunity on an online portal. You then express an interest through the portal and receive more information along with the option to download the tender documents.
• You should then review the tender documents in detail and decide whether it is worth your time and efforts.
• The most important factor here, that is the difference between other tenders, is that this dynamic purchasing system opportunity may not have a closing date on it, or it will have a closing date that will then be reopened on a regular basis. So, if you did miss it you can keep an eye on it coming back open in a few weeks/months time.
• You will then complete the tender documents, which is typically shorter and less work for a dynamic purchasing system, to become an approved and preferred supplier.
• If accepted onto the DPS you’ll be notified and you will essentially enter the pool of talent amongst other suppliers.
• The buyer can then submit their specific project requirements to all of the suppliers on the dynamic purchasing system to bid for those works. This is often called a ‘call off’ or a ‘mini competition’.
• You can then evaluate the project and decide whether you want to move forward with a tender for these works.
• You’ll put your tender in, and price, and await the outcome from the buyer.

What’s the difference between a dynamic purchasing system and a framework?

The key difference between a dynamic purchasing system and a framework is that a DPS will be either continually open or be regularly re-opened for the buyer to build up a pool of suppliers that they can call upon whenever they need it. Whereas a framework is much more restrictive with the application window and its frequency. Frameworks typically last from one to four years.

Alongside being an ‘open market’, DPS are also more flexible in terms of the amount of suppliers they allow into the network. A framework on the other hand will determine a number of suppliers required when it is put out to tender.

Sometimes on a framework buyers can offer direct award contracts, without the use of further tenders or mini competitions, but this is not the case with a DPS. All works or services that are required will need to be tendered for.

The pro’s & con’s of a DPS for both the supplier and the buyer

Given the differences between a DPA and a framework there’s naturally benefits and downfalls with both procurement methods for businesses and buyers. Which one is the most suitable depends on your needs, and they should be explored in detail before making a choice on how to procure goods or services.

Below we’ve broken down the main pros and cons of a dynamic purchasing system for both the suppliers and the buyer.

Pros

Cons

DPS questions and buyer expectations

When suppliers bid for a Dynamic Purchasing System (DPS), they can expect to answer a variety of questions that assess their capability, reliability, and compliance with relevant regulations. Common types of questions include:

1. Supplier Information: Basic details about the supplier, including company registration, financial stability, and experience in the relevant market.
2. Technical Capability: Questions regarding the supplier's ability to deliver the required goods or services, including their technical qualifications, staff expertise, and resources.
3. Compliance and Certifications: Suppliers may be asked to provide evidence of compliance with industry standards, health and safety regulations, and any necessary certifications.
4. Quality Assurance: Buyers often seek information on the supplier's quality management systems and processes to ensure that they can deliver consistent and high-quality outputs.
5. Previous Experience: Suppliers may be required to detail past contracts and projects, demonstrating their experience and success in similar roles.
6. Data Protection and Security: Given the importance of safeguarding information, questions about data protection measures and the appointment of a Data Protection Officer may be included (as noted in the Supplier Registration Service).

Public sector buyers are looking for clear, concise, and robust answers that demonstrate the supplier's capability to meet the requirements of the contract. They value:

• Reliability: Evidence that the supplier can deliver on time and to specification.
• Value for Money: Competitive pricing and efficient delivery methods.
• Sustainability: Commitment to environmental and social responsibility, which is increasingly important in public procurement.
• Innovation: Suppliers who can offer innovative solutions or improvements to existing processes.

Overall, the aim is to establish a trustful relationship where the supplier can meet the specific needs of the public sector buyer effectively. For more detailed guidance on the types of questions and expectations, suppliers can refer to resources like the DPS Guidance and insights on DPS from various procurement platforms.

You may also be interested in Tender Questions & Answers.

Time required to complete a Dynamic Purchasing System

The time required to complete a Dynamic Purchasing System (DPS) process can vary significantly based on several factors, including the complexity of the opportunity and the resources available to the supplier. Generally, a DPS can take anywhere from a few hours for a straightforward opportunity, particularly if the supplier has an existing and well-organised tender library, to multiple days for more complex bids.

Typically, the DPS process is quicker and easier than traditional tendering methods. This efficiency is one of the key advantages of a DPS, as it allows suppliers to respond more rapidly to opportunities. Additionally, a well-prepared tender library can streamline the process, enabling suppliers to access necessary documentation and information swiftly, which can significantly reduce the time spent on each bid.

Moreover, engaging in a DPS can provide valuable access to public sector customers, especially for suppliers looking to break into this sector. It can serve as a gateway for businesses with strong sales and marketing teams to generate leads and establish relationships with public sector buyers.

However, for many businesses it is often more of a decision of which DPS, how it works and how to use it as a tool for business growth, as well the capacity to complete the requirements. At Thornton & Lowe we can offer both guidance and bid and DPS writing support.

In summary, while the time to complete a DPS can vary, it generally offers a more efficient route to procurement compared to traditional tendering, benefiting suppliers who are well-prepared and strategically positioned in the market.

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