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Procurement in a Nutshell – Dynamic Purchasing Systems and framework reform

The Government published its Green Paper "Transforming Public Procurement" on 15 December 2020, with its aim to provide a modern, fit for purpose set of rules, improving and simplifying the procurement process.

In December 2021 the Government published its response to the consultation and the comments raised by over 600 organisations and individuals. As a result we now have a clearer indication of the reforms that the Government intends to introduce.

The Government plans to produce a draft Bill at some point in 2022. Further to the new legislation the Government will also introduce new secondary legislation or regulations to implement the new regime and produce  “a detailed and comprehensive package of published resources (statutory and non-statutory guidance on the key elements of the regulatory framework, templates, model procedures and case studies)” to help contracting authorities and suppliers understand how the new regime will work.

Due to significant changes and the amount of work required to bring this all into effect it is unlikely that the new regime will be implemented until 2023 at the earliest. We can expect a draft Bill this year and the Government has said that it intends to give at least 6 months’ notice of “go-live”.

What this Nutshell covers

This Nutshell looks at the proposals for the future of Dynamic Purchasing Systems and framework agreements.

What the Green Paper said

The Green Paper detailed a number of issues that had been identified with the current system of DPS and framework agreements. These included complexity, the confusion over what counts as a ‘commonly used goods and service’ and lack of transparency when a contract is awarded. The Green Paper proposals were designed to simplify the rules and add in some flexibility so that contracting authorities can create commercial agreements which are more suitable for their purposes. The Green Paper covered proposals for a new system, DPS+, and a revised framework procedure. The DPS+ would be the first step of a two-step process, whereby the subsequent procurement would be conducted using the new competitive flexible procedure.

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Among the proposals for the new DPS+ were:

  • It would not be limited to commonly used purchases
  • There would be no limit on the number of suppliers
  • There would be no maximum duration
  • A requirement for publication of a contract award notice

Proposals for the new framework procedure included:

  • Two options for all types of contract including utilities: an open and a closed framework
  • Open framework:
    • Must contain at least 2 suppliers
    • An initial closed period (up to three years) followed by a further period of up to an additional five years where new entrants can join
    • A limit on the number of suppliers
    • A re-evaluation of existing suppliers at each ‘call for competition’ point
  • Closed framework
    • Single supplier allowed
    • Suppliers appointed to a framework which would then be closed for four years
  • Call-off contracts awarded either directly to the supplier or through a mini-competition
  • Improved transparency with a central register
  • Terms which would allow the removal of suppliers if any grounds for exclusion become applicable

Results of the Consultation

Whilst the response was generally positive there were concerns raised that DPS+ would be difficult to manage since it would be open for the duration of its lifetime and would have an unlimited number of suppliers. Government did not think this was an issue since DPS+ would be a fully electronic system and suppliers will already have met selection criteria. They promised further guidance to provide clarity on the new system for both contracting authorities and suppliers, and confirmed that award notices will only be required where the award is over the threshold.

Concern was also raised that the name of the DPS+ was  misleading. The government agreed with objections to the name and will instead refer to the Dynamic Market.

In general, objections to the proposals for frameworks came from the utilities sector, who felt they benefitted from the current Qualification System and that they would lose flexibility if incorporated into the new procedures. Government has accepted this and will look into it.

Further detail in the consultation response included that frameworks will have to be controlled and defined, and that requirements on the type and scope of documents required for tenders will be published. The other proposals in the Green Paper will be broadly introduced.

What this means

A new system, the Dynamic Market, will replace the DPS, and there will be significant changes to the framework agreement procedures.

It does appear that more detail and guidance will need to be issued to give clarity on the scope and application of the proposals for the revised requirements, in particular there still seem to be decisions to be made on the application of the rules to the utilities sector. However, the changes look positive to make the procedures more adaptive to the requirements of contracting authorities and to bring greater transparency to the process.

If you have any queries on the issues raised or on any aspect of procurement, please contact one of our procurement specialists via our procurement hotline on 0330 137 3451

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.

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Melanie Pears

Partner | Head of Public Sector

+44 (0) 330 137 3451

+44 (0)789 987 8424

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Tim Care

Partner | Public Sector

+44 (0) 330 137 3458

+44 (0) 752 590 3378

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