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Procurement in a Nutshell: Procurement Act 2023 – Dynamic Markets

This Nutshell will analyse the new obligations on contracting authorities in relation to Dynamic Markets, drawing attention to any key changes from previous procurement legislation which contracting authorities ought to be aware of.

Dynamic Purchasing Systems will be replaced by the so-called Dynamic Markets.

These can be established by contracting authorities for the purpose of awarding public contracts (Section 35).

Contracting authorities can set conditions for membership of a dynamic market but those conditions must be proportionate (Section 36). When considering whether a condition is proportionate a contracting authority must have regard to the nature, complexity and cost of contracts to be awarded. Contracting authorities should also note that any conditions for membership cannot be modified during the term of the market.

Applications for membership must be accepted at any time during the term of the dynamic market and must be considered within a reasonable period.

Contracting authorities cannot limit the number of suppliers that can be admitted to a dynamic market. Members can be removed from the dynamic market if they are excluded or become excluded or excludible (Section 37).

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Fees may be charged to suppliers that are awarded a contract by reference to their membership of the market (Section 38).

Contracting authorities must submit four notices in relation to dynamic markets (Section 39):

  • The first notice must be published before establishing the dynamic market setting out that the authority intends to create the market.
  • As soon as reasonably practicable after establishing the dynamic market, the contracting authority must publish a notice setting out to that the market has been created.
  • As soon as reasonably practicable after modifying a dynamic market, the contracting authority must publish a notice setting out the modifications made to the market.
  • If a dynamic market ceases to operate, the contracting authority must publish a notice confirming the termination of the market as soon as reasonably practicable.

What’s changed?

A key change under the Act is that a contracting authority may establish a dynamic market for all procurements. This differs from Regulation 34 of the PCR which states that dynamic purchasing systems may only be used for “commonly used purchases”.

The Act also introduces the ability to charge fees to suppliers that are awarded a contract by reference to their membership.

What does this mean?

While dynamic markets will operate in a substantially similar way to dynamic purchasing systems under the PCR, contracting authorities should make note of the increased flexibility offered by the Act.

Contracting authorises should also ensure they address the transparency requirements imposed by the need to publish notices as this will be an additional administrative burden in relation to procurements under the new regime.

For further information please contact Melanie Pears or Tim Care in our Public Sector Team 

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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