DPS: the best procurement model?
Dynamic Purchasing Systems (DPS) have become a bit of a favourite for public sector buyers in recent years for the flexibility and efficiency they provide, not least for long term and recurring requirements with frequent call-offs.
Alongside framework agreements, they lend themselves well to collaborative purchasing and provide significant efficiencies for organisations procuring in a huge range of product and service areas.
Purchasing organisations must put their own interests first but procurement is a two-way street. The easier it is to access your work, the more choice your organisation will have and the more value you can create: more so than frameworks, the DPS model serves this purpose well.
Frameworks provide similar procedural efficiencies to DPS but supplier access can be an issue. Once a framework is implemented, no new suppliers can gain access to the agreement. With so many frameworks running for a full four years, potentially perfect providers are unable to access any associated call offs if they miss the initial window of opportunity.
But what if you had a tidal wave of suppliers applying for and gaining a place on your framework? Surely they will suffice? Perhaps, but bear in mind that businesses can drop out for various reasons: the loss of even a handful of registered suppliers can serve to undermine the agreement if it results in a lack of competition or capability.
These sorts of scenarios can – and do – result in needless terminations of frameworks and associated administrative costs. Unless you acquire exactly the kind of supplier pool you need at the outset you could find yourself unable to gain the best and most cost-effective deals for your organisation.
DPS remove the risk of your supplier base withering away by permitting new registrations throughout their duration. This is obviously excellent for any aspiring contractors: businesses not ready to participate at the outset can apply further down the line. For the purchaser, this is even better news: it facilitates an evolving supplier pool.
Why is this desirable? Well, it negates the previously mentioned drawback of frameworks in the sense that any suppliers who drop out can be replaced by new applicants. More importantly, it maximises choice: in fact, you can have as many suppliers on your DPS as you please. What happens when there are more hats in the ring? Competition increases and procurement costs go down!
Moreover, a DPS essentially future-proofs your organisation if used for certain supplies or services that are subject to rapid market change or technological innovation. The standard framework duration of four years can mostly see the rollout of substantially improved processes and solutions, not least in the field of digital services. A DPS can be implemented for an unlimited time period and ensures that you can engage with innovative suppliers that are new to the market and access the most modern products and services.
Want to know more?
Proactis provides a range of procurement consultancy options for public sector organisations. Call 01224 650 756 to learn how we can assist you.