What is the difference between a framework agreement and a DPS?

A framework agreement and a dynamic purchasing system (DPS) are both compliant routes to market used in UK public sector procurement, but they work in fundamentally different ways. A framework agreement is a closed arrangement awarded to a fixed list of suppliers, while a DPS remains open throughout its lifetime, allowing new suppliers to join at any point. Understanding which route suits your procurement need depends on the nature of your spend, the market you are buying from, and how much flexibility you need.

How does a framework agreement actually work in practice?

A framework agreement is a pre-agreed arrangement between a contracting authority and one or more suppliers that establishes the terms under which future contracts can be placed. The framework itself is not a contract for goods or services; it sets the commercial and legal conditions, so that individual purchases (called call-offs) can be made quickly without running a full tender each time.

In practice, a contracting authority runs a compliant OJEU or Find a Tender Service (FTS) competition to establish the framework. Suppliers are evaluated against quality and commercial criteria, and those who pass are admitted to the framework for a fixed term, typically up to four years under the Procurement Act 2023. Once the framework is in place, the contracting authority (and any other permitted authorities named in the original notice) can call off against it directly or through a further competition among the appointed suppliers.

Frameworks are widely used across the public sector because they reduce the time and cost of repeated procurement exercises. NHS trusts, local authorities, and central government departments regularly use frameworks for categories such as IT, professional services, construction, and facilities management. The trade-off is that the supplier list is fixed at the point of award; no new entrants can join once the framework has closed.

What is a dynamic purchasing system and how does it differ from a framework?

A dynamic purchasing system (DPS) is a completely electronic procurement process that, unlike a framework agreement, remains open to new suppliers for its entire duration. Any supplier that meets the selection criteria must be admitted at any point during the DPS lifetime, making it a genuinely competitive and evolving route to market.

The key structural difference between a DPS and a framework agreement lies in supplier access. A framework closes its doors once awarded. A DPS, by contrast, operates more like a continuously refreshed pre-qualification system. Suppliers apply to join at any time, and contracting authorities must assess and admit qualifying suppliers within a defined period, typically ten working days.

Another important distinction is that a DPS has no fixed term limit under the Procurement Act 2023 (though contracting authorities can choose to set one), whereas framework agreements are capped at four years in most circumstances. DPS arrangements are also fully electronic end-to-end, from supplier application through to the award of individual contracts, which supports transparency and audit trails.

Can new suppliers join a framework agreement after it has been awarded?

No. Once a framework agreement has been awarded, the supplier list is fixed and closed. New suppliers cannot join mid-term, regardless of their capability or pricing. This is one of the most significant practical limitations of the framework model and a key reason why contracting authorities sometimes choose a DPS instead.

This restriction matters most in fast-moving markets where new suppliers regularly enter, or in categories where the incumbent list quickly becomes unrepresentative of the available market. If a promising supplier emerges after a framework has been established, the contracting authority must wait until the framework expires and a new procurement exercise is run before that supplier can be considered.

For categories where the supply market is stable and well-established, this limitation is rarely a problem. But for technology, specialist consultancy, or emerging service areas, a closed supplier list can limit competition and value over time. This is precisely the gap that the DPS model was designed to address.

When should a contracting authority choose a DPS over a framework?

A contracting authority should choose a DPS over a framework agreement when the supply market is dynamic, when maximising competition is a priority, or when the category involves a wide and evolving range of suppliers. DPS arrangements are particularly well-suited to commoditised or high-volume requirements where market entry is relatively straightforward.

Practical situations where a DPS tends to outperform a framework include:

• Categories with a large or growing supplier base, such as temporary staffing, training providers, or digital services
• Spend areas where SME participation is a strategic objective, since DPS removes the barrier of a fixed award window
• Long-running programmes where the market is likely to change significantly over time
• Requirements where the contracting authority wants to avoid locking into a fixed supplier panel for four years

Frameworks remain the better choice when speed of call-off is paramount, the supply market is mature and stable, or when a contracting authority wants tighter control over which suppliers are available. Many organisations use both routes simultaneously across different spend categories, selecting the model that best fits each procurement need.

What are the rules around call-offs under each route?

Call-off rules differ between framework agreements and DPS arrangements, and getting them wrong can expose a contracting authority to legal challenge. Under a framework, call-offs can be made either directly (where the framework has a single supplier or where the terms fully determine the award) or through a further competition among the framework suppliers. The rules governing which approach is permissible must be set out clearly in the original framework documentation.

Call-offs from a framework agreement

Direct award is only permitted where the framework was established with a single supplier, or where all the commercial terms, including price, were fixed at the framework stage and no further negotiation is needed. In all other cases, a mini-competition must be run among the relevant framework suppliers. The mini-competition must use the same criteria established at the framework level, though contracting authorities can refine or weight them to reflect the specific requirement.

Call-offs from a DPS

Under a DPS, every individual contract must be awarded through a competition. There is no direct award mechanism. All suppliers admitted to the relevant category or lot of the DPS must be invited to tender for each call-off, and the award must be made on the basis of the criteria set out in the DPS documentation. This makes DPS call-offs slightly more process-intensive than direct framework awards, but it ensures ongoing competition and value for money at every stage.

Which procurement route is better for SMEs?

A dynamic purchasing system is generally more accessible for small and medium-sized enterprises (SMEs) than a traditional framework agreement. Because a DPS remains open throughout its lifetime, SMEs can apply to join at any point rather than having to compete in a single, time-limited window that they may miss or lack the capacity to respond to.

Framework agreements, by contrast, can inadvertently exclude SMEs in several ways. The upfront competition to join a framework demands significant bid resource, which smaller organisations may not have. Once awarded, frameworks often favour larger incumbents who have the scale to respond quickly to call-offs. And if an SME is not on the framework, it has no route to win work until the next framework cycle, which may be four years away.

The Procurement Act 2023 places an explicit emphasis on improving SME access to public contracts, and DPS arrangements align well with that objective. Contracting authorities seeking to diversify their supply base, stimulate local economic benefit, or access niche specialist capability are increasingly using DPS as a deliberate strategy to widen participation beyond established large suppliers.

How eXceeding helps with framework and DPS procurement

Choosing between a framework agreement and a DPS is rarely straightforward, and the wrong decision can limit competition, restrict supplier access, or create compliance risk. eXceeding supports contracting authorities and regulated organisations in making that choice confidently and running whichever route is selected with rigour. Specifically, eXceeding can help with:

• Assessing which procurement route best fits your spend category, market, and organisational objectives
• Designing and running compliant framework competitions and DPS arrangements end-to-end
• Managing call-off processes under existing frameworks or DPS arrangements
• Advising on Procurement Act 2023 obligations and how they affect your route-to-market decisions
• Providing interim procurement resource where internal capacity is limited

If your organisation is approaching a procurement decision and needs expert guidance on the right route to market, contact eXceeding to speak with one of our procurement specialists.

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