Repeat purchases without the administrative burden

Author of the article: Mgr. Alexandra Johnová, ARROWS (office@arws.cz, +420 245 007 740)

Procurement doesn't have to be a complicated and lengthy process. The Dynamic Purchasing System provides a modern, fully electronic solution that allows you to purchase common goods, services or works flexibly and efficiently. How does the dynamic purchasing system work, what are its advantages and what to look out for? Find out in this article.

Public procurement has undergone a significant transformation in recent years. With an increasing emphasis on digitalisation and transparency, contracting authorities are looking for ways to simplify, speed up and make processes more accessible to a wider range of suppliers. The Dynamic Purchasing System (hereinafter referred to as "DNS") is a modern solution that enables flexible procurement of common, generally available goods, services or works, typically for example office supplies, commonly available ICT equipment or translation services. In contrast, DNS cannot be introduced for example in the defence or security sector.

This specific instrument is regulated in Sections 138 - 142 of Act No. 134/2016 Coll., on Public Procurement (hereinafter "PPA") and offers an efficient alternative to traditional procurement procedures, which can be lengthy and administratively demanding. Thanks to full computerisation and openness, DNS is becoming an attractive option for both contracting authorities and suppliers. Unlike framework contracts, which restrict access to new tenderers once they are concluded, the DNS remains open throughout its duration and allows for continuous registration of new suppliers.

How does the dynamic purchasing system work?

The DNS can best be described as a two-step process. In the first phase, the contracting authority introduces the system through a tendering procedure to which the rules on restricted procedures apply mutatis mutandis. The contracting authority defines the conditions for participation, the duration of the dynamic purchasing system and the criteria according to which suppliers will be admitted in the notice of the launch of the procurement procedure, with a deadline for receipt of requests to participate of no less than 30 days. At the same time, the contracting authority must ensure that all interested parties have unrestricted remote access to the tender documentation until the end of the duration of the dynamic purchasing system. Another important condition is the prohibition to require payment (or the provision of a security) from tenderers, which removes barriers to entry for smaller and medium-sized enterprises.

The contracting authority will subsequently assess all requests for participation submitted within the deadline for submission of applications for compliance with the tender specifications. Participants who do not comply with these conditions will be excluded from participation in the tender procedure by the contracting authority. The contracting authority shall serve a notice of inclusion in the DNS on all participants whose applications comply with the tender conditions, and the dynamic purchasing system shall be deemed to be established once the last participant has received the notice.

However, if any of the participants has been excluded by the contracting authority, it is necessary to proceed according to Article 139(8) of the PPLA and to wait until the time limit for filing objections expires, or, in the case of filing objections, when the time limit for filing a motion expires, or, in the case of filing a motion, when the decision on the termination of the administrative procedure or rejection of the motion becomes final. The correct timing of the introduction of the DNS is important, as without its introduction the invitation to tender cannot be sent to the participants.

The second stage is the actual procurement under the DNS. If the contracting authority needs to purchase a specific supply, it will contact all suppliers that are included in the system and that correspond to the category of contract. The suppliers then submit their bids and the selection is based on predetermined evaluation criteria. This approach ensures maximum transparency and competition as each contract is competed separately and all qualified suppliers who are included in the dynamic purchasing system can participate.

Throughout the lifetime of the DNS, suppliers are able to submit a request for inclusion at any time, which means that the contracting authority receives a constantly updated and competitive list of potential suppliers. According to Article 140(1) of the PPA, each request must be evaluated within ten working days of receipt, or in exceptional cases within fifteen. If the supplier fulfils the conditions, it is included in the system, otherwise it receives a reasoned rejection.

Advantages of the dynamic purchasing system

The main benefit of the DNS is its flexibility. Contracting authorities do not have to repeatedly launch new tenders for the same types of supply, but can use an already established system in which only relevant suppliers are approached. At the same time, individual contracts awarded in the second phase of the DNS are no longer differentiated according to their expected value. Thus, even an above-limit contract can be awarded in the DNS, leading to a significant reduction in procurement time and administrative burden.

For suppliers, the DNS represents an easier entry into the public procurement market. They can join it at any time during its lifetime and are not dependent on one-off tenders. This aspect is particularly crucial for SMEs, which often do not have the capacity to participate in complex and time-consuming tenders.

Transparency is another important advantage. Each contract is competed between all suppliers who have met the conditions, ensuring fair competition and better prices. The system also allows for more efficient budget management, as contracting authorities have a better overview of price movements in the market and can react flexibly to changes.

DNS vs. framework agreement: Which system is better for you?

Both a dynamic purchasing system and a framework agreement facilitate repeat purchases, but differ fundamentally in their openness and flexibility. While a framework agreement closes the pool of suppliers and does not accept new participants once it is closed, a DNS remains open at all times. This allows for continuous competition and better adaptation to current market conditions.

Another difference is the duration. A framework agreement may not exceed 4 years, except in exceptional and duly justified cases. There are no time limits on the duration of the DNS. The method of procurement is also different. In the DNS, each competition is run separately, which promotes better quotations and transparency. A framework agreement, on the other hand, works with a fixed list of suppliers, which can be advantageous for long-term stable cooperation.

The choice between DNS and framework agreement depends on the priorities of the contracting authority. If the objective is maximum competition, flexibility and the possibility of continuous entry of new suppliers, DNS is the ideal choice. Conversely, a framework agreement may be preferable for predictability and guaranteed terms of cooperation over a longer period.

Implement a dynamic purchasing system correctly and without complications today

A dynamic purchasing system is a modern approach to public procurement that meets the needs of both contracting authorities and suppliers. Thanks to its full computerisation, openness and flexibility, it enables fast and efficient procurement of common commodities and services without unnecessary administrative burdens. For contracting authorities who are faced with repetitive purchasing, DNS offers an ideal solution to simplify processes and increase transparency.

Want to implement a dynamic purchasing system without the hassle? Proper setup and compliance with legislation are the keys to success. Leave the legal issues to us - we'll ensure the entire process runs smoothly and help you take full advantage of the system. Contact us and we will take care of the legal and procedural aspects for you.