What is a Dynamic Purchasing System?
One of the most common questions we receive from social housing providers is how best can we use a Dynamic Purchasing System to encourage local suppliers to bid for our contracts ?”.
A Dynamic Purchasing System, or DPS for short, differs from a traditional framework, and can be very useful when public sector organisations are looking to deliver or call-off particular low-value works.
This approach is simple to use and complies with UK public sector procurement regulations and also works really well to support a diverse range of suppliers, including local SMEs, and to boost local economies.
It’s important to know what it is and how it works, so you can decide whether it’s right for you and your projects.
How do Dynamic Purchasing Systems differ from other frameworks?
A DPS differs from a traditional framework in a few fundamental ways.
First, A DPS has no maximum time limit on its length of term, unlike a framework, which is usually set at four years.
Second, clients can use their own terms and conditions, pricing and specification through a DPS, as opposed to being tied to what is established as part of a traditional framework.
The third thing for contracting authorities to consider is that there is no option for direct award of projects; the only route to award is through mini-competition.
On the supplier side, entry onto a DPS remains open for its lifetime, meaning it can be easier for SMEs to gain access to a DPS rather than a traditional framework. There’s also no limit to the number of suppliers that can join, which means CPC are always asking our clients to provide names of suppliers they would like us to set up on the DPS so they can easily call off as and when required.
How does a Dynamic Purchasing System work?
CPC’s Whole House Refurbishment (WH) DPS is a good example. It is designed to provide contracting authorities with access to a pool of pre-qualified suppliers for building works, goods and services for housing refurbishment and maintenance.
Pre-approval of suppliers means buyers can be confident that whoever they use will have the requisite qualifications, experience and financial standing to deliver the project. Suppliers are also assessed on quality as well as value when entering the DPS.
The DPS generally applies to minor building works up to the value of £500,000 per project (our WH2 Framework is available for anything of a value greater than this), and there are five categories of work: kitchens, bathrooms and associated works; landscaping; electrical works; painting and decoration; and multi-disciplinary (installation of whole-house internal and external works).
The process used by clients for calling-off work is very simple and quick to use is as follows:
- The CPC client accesses the DPS for their project, specifying the work that needs doing.
- CPC searches for appointed companies that are in the right category of works, the right local area, and have the financial capability to undertake the project.
- CPC will issue an expression of interest to these appointed companies, who then have five days to respond.
- CPC will confirm the interested appointed companies and forward their details to the client.
- The client will then issue the appointed companies an ITT (invitation to tender) for the project.
- The appointed companies return the invitation to tender to the client.
- The client will evaluate the invitations to tender, and issue an award to the successful appointed company, notifying CPC of its decision.
What are the benefits of using a DPS?
For our social housing clients, a DPS provides a quick and compliant system for appointing providers for lower-value works that would otherwise mean a long procurement process.
With the five-day timeframe for supplier responses to expressions of interest, clients are guaranteed a quick turnaround, and the pre-approval process provides reassurance that all suppliers are qualified for the job.
Suppliers are scored on both price/cost and quality, providing an extra level of confidence for buyers, and there is a large range of options, giving choice and ensuring a good price.
Of particular benefit to local authorities is that a DPS is more accessible to small to medium enterprises which might not otherwise have the opportunity to bid for public sector work, whether through a framework or direct procurement. That means there’s a range of local providers available that can be selected based on region, helping to support local economies and the wider Government aim of boosting local growth.
As the DPS is always open to new suppliers it also means that, where there is a Section 20 consultation, leaseholder-nominated trades can apply to join and, if successful, will have an opportunity to bid for the work.
Gary Cawley, Director, CPC