As with many other elements of the Procurement Act 2023, dynamic markets are a new part of public sector bid and tender writing. Our previous series of blogs on changes introduced includes:

• A new public debarment list for underperforming suppliers which precludes them from bidding for a fixed period of time – strengthening oversight of contracts
• The role of social value and its future in public sector tenders, as it was not explicitly mentioned within the Act’s legislative text
• Requirements to set and publish key performance indicators for contracts and framework agreements over a certain value threshold
• Changes to pre-bid activity and greater engagement between buyers and suppliers before the tender is released, increasing a bid pipeline.

Read more below to learn our thoughts on how dynamic markets will impact future bidding going forward.

Dynamic markets – what is changing in public procurement?

Dynamic markets will join framework agreements and dynamic purchasing systems as more flexible forms of public sector procurement.

Rather than direct award of a contract, dynamic markets will allow suppliers to ‘pre-qualify’ for certain opportunities which are then subject to the tender process. As such, dynamic market applications will be critical in giving prospective suppliers access to billions of pounds worth of contracts.

Held under the new ‘competitive flexible’ procedure, hallmarks of dynamic markets include the following:

• Dynamic markets may encompass all procurement types rather than specific goods and services, as under a DPS
• Applications to join the dynamic market must remain open throughout the duration of the contract or arrangement, allowing suppliers to join at any time
• Suppliers on the dynamic market may be charged a fee after they are awarded a contract – this may operate similarly to current arrangements under framework agreements.

Lastly, the buyer organisation cannot limit the number of suppliers who can join a dynamic market. They are also not permitted to alter the terms and conditions of a dynamic market once it goes live – meaning these will be carefully considered and designed prior to any notice being issued.

Dynamic markets in the Procurement Act

Relevant guidance around dynamic markets can be found in Sections 34–39 of the Act. This includes:

• Requirements to determine whether dynamic markets are ‘appropriate’ to what is being procured – for example, if the range of works or services cannot be supplied through a normal tender process
• Pre-qualifying conditions for entering a dynamic market, such as minimum technical ability, financial stability and any industry-specific accreditations, such as certification to an ISO standard
• Fees charged to suppliers are likely to be a fixed percentage of the estimated value of an awarded contract – again, this is similar to current processes for certain framework agreements.

The Cabinet Office has issued formal guidance on dynamic markets under the Procurement Act, allowing suppliers to review this in further detail.

How dynamic markets align with the Procurement Act’s objectives

Overall, the changes dynamic markets introduce are an extension of the Procurement Act’s main objectives, as outlined by the Cabinet Office.

Delivering value for money

Under a dynamic market, the procurement process will be streamlined for suppliers and buyers alike. The structure will deliver unified, structured access to public sector contracts, and outline key accreditations and mandatory minimum requirements – allowing prospective suppliers to understand exactly whether the contract is right for their business.

Maximising public benefit

Under a dynamic market, buyers will have access to a wider pool of pre-qualified, pre-approved suppliers. This will allow them to eliminate red tape around procurement processes and timelines for time-sensitive works and services – for example, repairs and maintenance to social housing properties.

Encouraging SMEs to become suppliers

Dynamic markets will be of particular interest to small- and medium-sized businesses as a first step towards doing business with the government. The structure of a dynamic market means there is little risk in taking sole responsibility for delivering a contract, which may be appealing to first-time or infrequent bidders.

Dynamic markets will also serve as an excellent introduction to public sector procurement, allowing SMEs to build and develop relationships with buyers for future contracts subject to the tender process.

Dynamic markets, the Procurement Act and bid and tender support

With the 28^th October implementation date fast approaching, our series of blogs on the changes introduced by the Procurement Act will conclude in October – recapping key themes and topics relevant to suppliers bidding for contracts.

As with many other changes ushered in by the Act, we anticipate new and existing clients will have questions about the tender process for dynamic markets. As part of our wider bid management support, our expert team of bid and tender writers are available to explain and guide you through the dynamic markets tender process, alongside any other challenges to your tender submission.

If you have a question about dynamic markets or would like to discuss the bid and tender services we provide, our sales and marketing team are contactable at info@executivecompass.co.uk or 0800 612 5563.