What is a Dynamic Purchasing System?
Similar to Frameworks, Dynamic Purchasing Systems (DPS) are a procurement method used by public sector buyers to create a list of pre-approved suppliers from whom goods, services or works can be purchased. These lists are typically used by Government organisations/publicly owned bodies, such as local councils, schools and healthcare organisations. As public procurement is funded by the public purse, these organisations use DPS to save time and money by streamlining the procurement process. By pre-approving a list of qualified suppliers, the procurement process is made simpler by removing the need for the formal tender process each time a procurement opportunity arises.
This is an updated an more in-depth article of a blog we posted previously, you can also find that here
If you're looking for more information on Framework Agreements instead, we have a whole host of articles on them here
Where can I find DPS opportunities?
DPS are listed on the UK Government tender repositories, Find a Tender and Contracts Finder. These formal databases are the official home of all new opportunities, with hundreds of Request for Proposals (RFPs) posted every day. A superb tool, these databases require daily monitoring which can eat into valuable company time, especially for Small Medium Enterprises (SMEs). Redirecting your time and resources away from this admin-heavy process, we recommend that all our SME client sign up to the free Tender Pipeline database.
Providing a centralised resource that is refreshed daily, Tender Pipeline collates all opportunities relevant to your business at the touch of a button. Receive email alerts when opportunities arise and tailor your search requirements to your needs and business plan. Talk to a member of our friendly team today to find out more about how Tender Pipeline can revolutionise your procurement experience.
Types of DPS
DPS can be categorised into different types based on the nature of the goods, services or works being procured. Writing winning bids for DPS since 2009, here are some of the most common types of DPS that we come across:
- Goods-based DPS: Focused on the procurement of goods or physical products, this can include categories such as office supplies, IT equipment, vehicles, construction materials, or any other tangible items required by the procuring organisation.
- Services-based DPS: This is the procurement of non-physical services, such as professional services (consulting, legal, accounting), maintenance and repair services, cleaning services, transportation services, or any other service required by the procuring organisation.
- Works-based DPS: Procurement for specifically construction and infrastructure-related projects. This can include building construction, civil engineering works, electrical installations, plumbing, landscaping, or any other type of construction or infrastructure-related work.
- Technology-based DPS: The procurement of technology-related products or services, covering software development, hardware and equipment, IT consulting services, telecommunications services, cybersecurity solutions, or any other technology-related goods or services.
- Professional services DPS: This can cover categories such as architectural and engineering services, marketing and advertising services, research and development services, healthcare services, or any other specialised professional service required by the procuring organisation.
Pros and cons of DPS versus Frameworks
Similar in type, we often find clients are confused between DPS and Frameworks. We have laid out the main pros and cons of DPS versus Frameworks, to help you navigate this area of public sector procurement.
Pros of DPS
Pros of Frameworks
Increased competition: DPS allow for ongoing supplier applications, whereas Frameworks are characterised by their cut-off dates for applications. By leaving the application process open, DPS promote competition among suppliers which, in turn, can lead to better pricing and improved quality of goods, services or works.
Efficiency: Framework agreements streamline the procurement process by establishing pre-negotiated terms and conditions. Once a Framework agreement is in place, following procurements can be executed more efficiently. Buyers can refer to the agreed terms and conditions, saving time and effort in negotiating these aspects repeatedly.
Flexibility in supplier selection:Organisations can adapt to changing requirements and market conditions by allowing new suppliers to join the system at any time. This ensures a diverse pool of potential vendors, enhancing the chances of finding the most suitable suppliers for specific procurements.
Long term relationships: Framework agreements enable organisations to establish long-term relationships with a select group of suppliers. These relationships can foster collaboration, knowledge sharing, and supplier development. Suppliers can gain a deeper understanding of the buyer's needs, leading to improved service delivery and innovation.
Streamlined procurement process: By establishing a pre-approved list of suppliers, this eliminates the need for conducting individual tenders for each opportunity. This saves time and reducing administrative burden. Buyers can issue tenders directly to the pre-qualified suppliers, speeding up the process.
Pricing advantages: Framework agreements often include negotiated pricing. Buyers can secure more favourable pricing and terms through the negotiation process, providing cost savings and budget predictability. This is especially beneficial when there is a high volume of repeat procurements within the scope of the Framework agreement.
Access to a wider range of suppliers:DPS attract suppliers with different capabilities, expertise, and offerings. By widening the supplier base, organisations can access specialised or niche suppliers that may not be part of Framework agreements. Driving industry innovation, this enables them to tap into a broader range of suppliers and potentially benefit from their unique offerings.
Faster procurement: Once a Framework agreement is in place, following procurement opportunities can be sped up. Buyers can issue call-off orders or mini-competitions among the pre-selected suppliers, eliminating the need to start the procurement process from scratch. This reduces lead times and accelerates the delivery of goods, services, or works.
Cons of DPS
Cons of Frameworks
Potential for lengthy selection process:The initial qualification process for DPS can be time-consuming. Suppliers need to meet specific eligibility criteria and the evaluation and approval of applications can take a significant amount of time. This can delay the start of the DPS and the resultant procurement activities.
Limited competition: Framework agreements typically involve a limited number of pre-selected suppliers. While this streamlines the procurement process, it may restrict the competitive landscape. This can potentially hinder access to new suppliers, innovative solutions, or emerging market players.
Ongoing management required: DPS requires ongoing management and monitoring to ensure the system remains up-to-date and relevant. This includes periodically re-evaluating suppliers to ensure they meet the required standards, updating supplier information as necessary, and managing contract awards efficiently.
Reduced flexibility: Organisations may find it hard to adapt to changing needs or emerging requirements within the Framework agreement's scope. As the terms and suppliers are predetermined, there may be limitations in accommodating new demands or incorporating evolving industry trends. This can create additional procurement processes outside the framework.
Lack of long-term supplier relationships:Suppliers are selected on a per-procurement basis, and there is no guarantee of continued engagement beyond each specific contract. This limits the opportunities for developing long-term strategic supplier relationships or partnerships.
Administrative complexities: Framework agreements require ongoing management. This includes monitoring supplier performance, addressing disputes or issues that arise during the contract period, ensuring compliance with the agreed terms and conditions, and conducting periodic reviews or evaluations.
Limited price advantages: While DPS promote competition, it may not always guarantee the most favourable pricing compared to Framework agreements. Suppliers in DPS can adjust their prices during the procurement process, potentially leading to increased costs compared to the negotiated pricing in Framework agreements.
Potentially less advantageous pricing: While Framework agreements can offer negotiated pricing, they may not always result in the most competitive pricing compared to DPS. The limited number of suppliers within the framework may reduce the level of competition and bargaining power, potentially impacting the overall cost savings achievable.
Are DPS right for my SME?
Whilst the answer to this will vary depending on your business, there are 8 key areas that we recommend evaluating as an SME before committing your time and resources to DPS.
The first of these is assess your product/service offering and whether this aligns with the opportunity in front of you. All too often, we see SMEs bidding for DPS award in the hopes that any resultant award may bring even a small proportion of revenue. In reality, even if awarded, this scattered approach to DPS procurement often results in a major loss of time and resource for very limited award. To avoid this, you should assess whether there is a demand for your goods or services within the DPS framework and consider whether the DPS includes categories relevant to your expertise and capabilities. To make this easier, we recommend creating a free Tender Pipeline profile to filter relevant opportunities.
Next, you should evaluate whether participating in the DPS will provide your SME with increased market access and exposure to potential buyers. To do this, you can consider the number and diversity of buyers using the DPS. For example, whether the DPS can connect you with a broader range of customers than your current work and marketing channels allow.
An important step is assessing the level of competition within the DPS by considering the number of suppliers already participating and their capabilities. Taking this further, you should research whether the DPS encourages fair competition and offers opportunities for SMEs to secure contracts. If the DPS attracts a diverse supplier base and promotes competition, it may provide a favourable environment for you as an SME supplier.
Once satisfied with the terms and conditions of the DPS, evaluate your capacity and resources to participate within it. For example, do you have the necessary infrastructure, expertise, and manpower to meet the potential demand from contracts awarded through the DPS? Assess if your SME can handle the additional workload associated with DPS, such as contract administration and ongoing supplier management, and whether this growth aligns with your business plan.
As part of this, you should also assess the potential financial implications of participating in the DPS. For example, any registration fees or ongoing costs. It would help if you evaluated whether the potential benefits and revenue from contracts won through the DPS outweigh the associated expenses.
Also consider how participating in the DPS aligns with your long-term business strategy. Discuss whether the DPS opportunities complement your growth objectives and market expansion plans and if participation can help you establish long-term relationships, gain credibility, and open doors to future business opportunities.
Before committing to a DPS, you must review participation's legal and compliance aspects. For example, you must ensure that your SME meets the eligibility criteria, possesses the necessary licenses and certifications, and can fulfil the contractual obligations and compliance requirements set by the DPS.
Finally, we recommend that you evaluate whether participating in a DPS will result in resource efficiency for your SME. To do this, you can consider factors such as reduced administrative burden, streamlined procurement processes, and access to a broader customer base.
Top tips for writing winning DPS bids
When writing winning bids for DPS, it's important to highlight your strengths and convince buyers that you are the right choice. Using our 14 years’ experience winning DPS award for SMEs, below are our top tips for DPS framework award:
- Understand the DPS: Oftentimes we see SMEs fail at the first hurdle as they overlook the importance of reading the DPS framework, its rules, requirements, and evaluation criteria in its entirety. Without doing this, you cannot possibly demonstrate to the buyer that you understand their specific needs and objectives in their entirety. This is extremely important for all aspects of public procurement as award is presented to suppliers who can evidence that their goods/services present the Most Economically Advantageous Tender. In plain speak, this means that the supplier can provide the best value for money. A great way to show this is by tailoring your bid to align with their expectations and demonstrate your understanding of the DPS structure.
- Read the tender documentation carefully: Related to the first point, you must carefully read the RFP documentation to ensure that the bid you submit is compliant with the rules set out by the buyer. This will also help you to understand the scope, requirements and instructions for the bid submission. Commonly missed instructions include font, font size, text colour, and requests for PDF submissions. Often, where specific instructions are missed, this can result in your bid being non-compliant and dismissed, wasting the time and money invested into the writing process. Prevent this by reading the instructions carefully.
- Highlight relevant experience: Public procurement is carefully scrutinised due to being funded by the taxpayer. As such, public buyers like to play it safe. Instil confidence in your business by showcasing your relevant experience and expertise in the specific category covered by the DPS. Provide examples of similar projects or contracts you have successfully completed in the past and emphasise how your experience positions you as a qualified and capable supplier within the DPS.
- Differentiate your offering: Clearly articulate the unique value proposition of your products or services and differentiate yourself from your industry competitors by highlighting any distinctive features, innovative solutions, or added benefits you bring to the table. Prove that your bid presents the best value for money by explaining why choosing your company would provide a competitive advantage to the buyer.
- Focus on quality and legislative compliance: Emphasise your commitment to quality assurance and compliance with relevant standards, regulations, and certifications. Showcase your processes, methodologies, and quality control measures to assure the buyer of your ability to deliver high-quality products or services consistently. Where the RFP requests any specific standards or compliance, make sure that this is highlighted within the bid to make it stand out to the buyer.
- Provide competitive pricing: While DPS allows for price adjustments, it's important to provide competitive pricing in your initial bid. Conduct a thorough cost analysis and ensure your pricing is reasonable and competitive within the market. Clearly explain the breakdown of costs and any value-added services you offer. For guidance with pricing, research the opportunity you are applying for in the event that pre-existing awarded supplier information is listed.
- Deliver strong supporting documentation: Include relevant supporting documents, such as case studies, client testimonials, and certifications. These documents strengthen your bid and provide evidence of your capabilities, track record, and credibility. Remember, public buyers play it safe- just remember to check the RFP for any rules around in-document/attaching supporting evidence.
- Write in concise, plain writing: Present your bid in a clear, concise, and well-structured manner. Use language that is easy to understand, avoiding jargon or technical terms that may confuse the reader. This is especially important as it is common in public procurement for the awarding panel to not be subject experts. Ensure that your bid is free of grammatical and spelling errors and proofread it thoroughly before submission.
How Thornton & Lowe can help you win a DPS award
We know our clients have what it takes to win, and we champion the SMEs that make it happen. With a success rate of 75% and 90% client retention, get in touch and let us be the voice that wins you DPS placement today.