What is a dynamic purchasing system? UK procurement guide

Traditional public sector tenders can be slow, resource-intensive and difficult for smaller suppliers to navigate. A straightforward contract for office supplies, IT equipment or facilities support can take months to move through the procurement process, limiting access to new suppliers and reducing the range of suppliers competing for the work.

A dynamic purchasing system (DPS) was designed to help streamline that process. It allows public sector buyers to create a pool of pre-qualified suppliers and run faster competitions for individual public sector contracts as requirements arise. The result is greater flexibility, stronger competition and more opportunities for SMEs and other providers.

The timing is important. The Procurement Act 2023 came into force on 24 February 2025 and replaced the DPS with a broader mechanism known as a dynamic market. Understanding how DPS worked and what changed remains relevant for anyone involved in public sector procurement today.

What is a dynamic purchasing system (DPS)?

A dynamic purchasing system is a type of commercial arrangement used in UK public sector procurement. It operates in two stages. First, suppliers complete a questionnaire and meet the published selection criteria to join the system. Second, buyers run separate competitions among those approved suppliers to award individual public sector contracts.

The key characteristic that distinguishes a DPS from a framework agreement is that a DPS never closes to new suppliers. Any supplier that meets the selection criteria can apply to join at any point during the life of the system and must be admitted. A framework agreement, by contrast, fixes its list of suppliers when it launches and keeps that list closed for its duration.

A DPS is best suited to commonly purchased goods and services where supplier markets are active and competitive. It supports a wider range of suppliers, including SMEs and new businesses, while helping public sector organisations streamline their procurement process. It’s not designed for direct award arrangements or for catalogue-based purchasing where no further competition takes place.

DPS vs. framework agreement: Key differences

A framework agreement fixes its supplier list on day one and typically runs for up to four years. A DPS remains open to new suppliers throughout its lifetime and can run indefinitely.

Under a framework, suppliers compete once — at launch — for a place on the panel. Under a DPS, any qualifying supplier can apply at any point during the life of the system. That creates ongoing opportunities for new and growing businesses, including small and medium-sized enterprises, rather than locking them out if they miss the initial window.

Both arrangements require a further competition to award an individual contract. Contracting authorities generally cannot make a direct award from either a framework or a DPS, with only limited exceptions. The practical difference is that a DPS mini-competition is typically simpler and faster to run than a framework call-off, because the supplier pool is already qualified and the process is built for repeat use.

How a dynamic purchasing system works

The DPS process runs in two clear stages.

Stage 1: Supplier admission

The contracting authority publishes the DPS on the Find a Tender Service (FTS). Interested suppliers complete a Selection Questionnaire (SQ) covering matters such as financial standing, technical capability and relevant experience.

Any supplier that meets the published selection criteria must be admitted to the system. There is no cap on the number of suppliers who can join and the system stays open to new applications for as long as it operates.

Stage 2: Further competition

When a buyer wants to procure something covered by the DPS, they issue a request for tender (RFT) or request for quotation (RFQ) to all relevant suppliers in the system. Suppliers respond with bids and the buyer awards the contract based on the evaluation criteria set out for that competition.

Digital e-procurement tools help streamline the process because the same competition is run many times throughout the life of the system.

A DPS itself is not a contract. It is an ongoing arrangement within which individual contracts are awarded through further competition. Being admitted to a DPS guarantees a supplier the right to bid, not the award of any particular contract.

Who can run a DPS?

Any contracting authority can establish and run a DPS. That includes central government departments, local councils, NHS trusts, maintained schools, universities, housing associations and other public bodies.

In practice, many authorities access a DPS managed by a central purchasing body (CPB) rather than running their own. The Crown Commercial Service (CCS) operates arrangements that the wider public sector can use, NHS Shared Business Services manages arrangements for health bodies and regional consortia such as the North Eastern Universities Purchasing Consortium (NEUPC), the Southern Universities Purchasing Consortium (SUPC) and Westworks run arrangements for their members. Before establishing a new system, it’s worth checking whether your regional consortium already operates one that covers your category.

Who should use a DPS?

A DPS works well for commonly purchased goods and services — office supplies, IT equipment, facilities management and professional services — and for categories where the supplier market moves quickly and new entrants should be able to join. It suits procurement teams that want to pre-qualify suppliers once and then run faster individual competitions, which is a natural fit for a broader strategic sourcing approach.

A DPS does not work well for direct award arrangements, catalogue purchasing where you simply want to order a specific product at a fixed price or highly complex requirements where a full tender procedure is necessary.

What changed with the Procurement Act 2023

The Procurement Act 2023 came into force on 24 February 2025. It replaced the Public Contracts Regulations 2015 (PCR 2015) as the primary framework governing public sector procurement in England, Wales and Northern Ireland.

Under the new legislation, the DPS has been replaced by dynamic markets. According to GOV.UK guidance on dynamic markets, the concept is largely the same: an open, continuously accessible pool of pre-qualified suppliers who compete for individual contracts. The key difference is scope. Dynamic markets can cover any type of goods, services or works, not just commonly purchased or standardised items.

Existing DPS arrangements established under PCR 2015 continue to operate under the old rules but expire on 23 February 2029 unless terminated sooner.

For procurement leaders, the takeaway is straightforward. New arrangements will be established as dynamic markets, while organisations using an existing DPS should check the transition timeline with the relevant contracting authority. The day-to-day mechanics remain similar, but the terminology and legal framework have changed.

Benefits for public sector buyers

The value of a DPS comes from balancing speed, flexibility and compliance. Buyers can access a wider supplier market without running a full procurement exercise every time a contract is needed.

The main benefits are:

• Speed: A DPS mini-competition can be completed in as little as ten days for straightforward requirements. Full open procedures routinely take months from notice to contract award.

• Flexibility: Buyers can tailor each further competition to the specific contract in front of them, rather than being constrained by fixed framework lot structures or pre-agreed call-off terms.

• Supplier access: Because the system stays open, buyers consistently have access to an up-to-date, competitive supplier pool — including local suppliers, SMEs and businesses that didn’t exist when the system was first established. That openness is one reason dynamic arrangements feature so heavily in resilient procurement strategies for the public sector.

• Compliance: Using an existing DPS or dynamic market provides an auditable route to contract award and reduces the procurement resource needed compared with running a full procedure from scratch. It can also help demonstrate value for money by maintaining competition throughout the life of the arrangement.

Benefits for suppliers

A DPS creates opportunities that are often harder to access through other procurement methods. Because the system remains open, suppliers can continue to compete for work throughout its lifetime rather than waiting for a framework to reopen.

Here are the main advantages:

• Continuous access: Under a framework agreement, failing to make the shortlist at launch can close the door for up to four years. A DPS lets suppliers apply at any time and one successful SQ submission can unlock a pipeline of public sector contracts without re-qualifying for each procurement cycle.

• Support for SMEs: DPS selection criteria are proportionate to the contract values involved and the SQ process is standardised to reduce the administrative burden. That levels the playing field for small and medium-sized enterprises that lack the resources to compete in full procurement procedures.

• New opportunities: As the system remains open, suppliers can build relationships with new public sector organisations and develop long-term partnerships without waiting for a new framework agreement to launch.

• Procurement Act 2023: Increasing SME participation is one of the Act's stated objectives and dynamic markets, as the successor to the DPS, are designed with that goal in mind.

Review your route to market

If your organisation currently runs an open tender for every requirement or relies on framework agreements that are close to expiry, a dynamic market or an existing DPS offers a faster and equally compliant route to the same outcome. The time saving is real and so is the value of reaching a more competitive, up-to-date supplier pool. For many organisations, it can be a more efficient procurement method for commonly purchased goods and services.

A practical first step: before your next procurement, check the Crown Commercial Service and your regional purchasing consortium for existing dynamic markets or DPS arrangements that already cover your category. Running a further competition within an existing arrangement is almost always faster than establishing a new one or running a fresh open procedure.

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This article was created by professional writers and editors with the assistance of AI-powered tools. AI was used in a supportive capacity only – for example, to aid with translation, content review, and alignment with brand guidelines. All substantive research, editorial decisions, and final approval were performed exclusively by human authors and editors, who retain full editorial responsibility for this publication.

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