Commissioning is the strategic activity of identifying a need, allocating resources and procuring a provider to best meet that need, within available means.
In an era of constrained budgets, it is clear making the most of digital technology is essential. It can drive efficiency and deliver value for money in a multitude of ways as well as benefiting the health and wellbeing of individuals. (LGA, 7th Feb 2018)
As the comment above states, Local Authorities need to adapt to digital technologies and a move to a Digital end-to-end commissioning platform DPS is one of these processes.
How does a DPS differ from Framework Agreements?
- Allows suppliers to join at any time
- No time limit in terms of the DPS duration
- Must be fully electronic
- All suppliers registered to the relevant category must be invited to bid (no direct award)
- Pricing typically determined on an individual basis
How does it work?
- Establish the DPS:
- Set out entry criteria, and publish (e.g. to OJEU)
- 30 days prior to tendering activity
- Supplier agreement, specification, award criteria
- Commissioning via the DPS:
- Inviting all suppliers registered to bid
- Contract award based on award criteria
Is a DPS right for me, what are the optimal category conditions for a DPS?
Looking at the table above, the more that apply, the greater the fit for a DPS
*figures in brackets are numbers suggested within LGA’s ‘A guide to Dynamic Purchasing Systems within the public sector’
What are the benefits of adopting a DPS?
Key benefits for buyers
- Allows access to new and emerging supply
- Improves the sustainability of the market and reduces risk
- Cost savings generated through competition
Comment from large Local Authority – “the DPS has driven a Safer market share, whilst ensuring that core Provider Consistency is maintained’
Key benefits for providers
- Greater access for SMEs
- Access to more opportunities
- Increased transparency for suppliers
Comment from a provider to a Transport DPS – “more and more councils use this system and the more they come the happier we are for getting more and more work easily and without hassle”
What are the potential pitfalls to the establishment of a DPS?
- Setting the barrier to entry too high
- Onboarding the supply base
- Ongoing engagement with suppliers
- The general perception of DPSs
- Lack of buy-in from internal stakeholders
Setting the barrier too high
The chart below highlights the anonymized supply chains of 4 London Boroughs in proximity. Borough B introduced an additional requirement to join their DPS, which damaged uptake
How can you overcome this?
- Understand the market – draw on subject matter experts
- Create standard entry criteria (suggestion: Crown Commercial Services – CCS selection criteria)
- Use individual tenders/requirements to filter the supply base further
Onboarding the supply base
- Potentially many (new) suppliers
- May not be familiar with DPSs
- Resource intensive to support them
- They may apply at any time
According to the LGA, there are some key features for organisations to consider when implementing a DPS (see chart below)
All of these will be addressed by engaging with adam
Ongoing engagement, maintaining an active supply base
The chart below highlights an anonymized example of a client’s existing DPS prior to moving to adam
With an approved supplier base of 140, only 57% have contracts in place and of that 60 only 10 were actively bidding.
Overcoming an inactive supply base
- Monitor and report on inactivity on a regular basis
- Gather feedback from suppliers
- Supplier forums
- If possible, encourage activity by linking in the invoicing process
- Part of the full end-to-end digital commissioning platform and process
The first 3 bullet points are part of the adam Supplier Engagement Team process.
Perception of DPS
At market events, we often find the same challenges when discussing the implementation of a DPS
- “…It’s a race to the bottom”
- “…It’s all about price”
It doesn’t need to be
- Set controls
- Understand how quality is factored in
- Focus on transparency and the benefits to suppliers
Lack of buy-in from internal stakeholders
According to the LGA, one of the main barriers identified as to whether to implement a DPS is a lack of understanding of what a DPS is”
- Clarify what a DPS is and what it is not
- Express the benefits that can be realised
- Undertake a properly managed project to implement the DPS
A full end-to-end Digital Commissioning Offering
We started by saying that making the most of digital technology is essential, but when it comes to commissioning electing to go with a full digital end-to-end solution that also offers full Professional Services to back up the platform is the best way to benefit the health and wellbeing of individuals.
To find out more about adam’s DPS platform click here.