The trend towards Dynamic Purchasing Systems

Dynamic Purchasing Systems (DPS) have become an increasingly popular element of the procurement toolkit in recent years, rising in prominence as a useful and agile addition to traditional framework agreements.

In 2015, the Crown Commercial Service’s Chief Executive, Sally Collier, famously announced a 40% cut in their number of framework agreements in favour of a broader range of contracting models, a key one of which was DPS¹.

So why have DPS arrangements become a “go to” tool? There are numerous reasons, but the overriding feedback from our customers is that they provide much-needed agility for procurement professionals. Because DPS stays open on OJEU for as long as the buyer needs it, new suppliers can put themselves forward for tender consideration on a continuous basis. This means that buyers always have a fresh pool of suppliers that are eager to support them whenever needed.

For every supplier that registers on the DPS, verification checks must be completed within a mandatory ten days, to assess suitability for tender invitation. This is where Constructionline steps in – we perform the pre-qualification validation checks on behalf of our customers within those ten days, to the PAS91 standard, alleviating the pre-qualification burden. Our buyers can be sure that they are always working with approved partners, with the comfort that they have met their compliance obligations.

Whilst there is a risk that a large number of suppliers will respond to the DPS, which could mean a larger number of tender responses to manage, in practice buyers are able to apply up to three filters, which helps to restrict the number of suppliers that make the final “cut”. These filters include criteria such as location of work, company size or value, ensuring that buyers get exactly the kind of supplier that meets their requirements, as well as a more manageable number of tender responses.

Identifying SME suppliers

Small and medium businesses are an essential building block of the UK economy, and are particularly important in building regional economies. As such, the UK government has set a target to increase public procurement spend with SMEs to 33% by 2020.

Last year, the Federation of Small Businesses (FSB) conducted a study to assess current spend values, as well as some of the barriers for SMEs in successfully securing projects with the public sector2. The resulting report showed that a relatively small proportion of public sector procurement spend goes to SMEs and a key barrier is the prevalence of framework agreements. The FSB recommended a replacement of frameworks with DPS arrangements to ensure that smaller businesses are not locked out of the opportunity.

It’s a model that our customers tell us works well. Whilst framework agreements might account for their larger, ongoing projects, DPS agreements enable them to be far more fleet of foot in securing verified, smaller suppliers in a whole variety of regions that may not be their core territory. The ability to access these suppliers when needed is vital to meeting project timescales, and because each supplier that registers interest is verified in real time, our customers have the confidence that they are operating compliantly and with a full audit trail.

A multi-faceted approach to procurement

As with any large spend activity, strategy is key. As contracting models, objectives and regulations change, so too must procurement strategies. Framework agreements undoubtedly serve an important purpose and, quite rightly, will remain the mainstay of most procurement teams. But to overlook other, emerging options is to neglect opportunity. Cost and compliance will always be primary drivers for any procurement department, but of course there is a requirement to fulfil more objectives than those, and SME spending is a prime example. In embracing tools such as DPS, public sector buyers are better equipped to meet their broader obligations whilst continuing to prioritise quality.

As one of our customers put it, “By providing only verified, trading suppliers, Constructionline DPS is an agile, streamlined and efficient way of managing tenders, removing the burden from your team and providing fast and effective results.”



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