Filling orders for Christmas presents via dynamic purchasing system
22.12.2010
Christmas | public procurement
Legislative solutions included in public procurement law smooth the way for Santa Claus to perform all contract obligations before children awake.
Although St. Nick’s factory is working triple shifts during the heavy season in the run-up to Christmas Eve, sometimes the orders simply just come in too fast and furious for toy production to keep up—even with a programme in place for hiring temp elves. It is no secret that not all of the presents are still made on-site at the principal Claus, Inc. plant in Rovaniemi, Finnish Lapland (or even at the Polish branch near Suwałki)—witness the “Made in China” label found on many gifts under the Christmas tree. Luckily, the European Union has come up with a solution. Santa can implement the special procedure known as the “dynamic purchasing system,” which enables him to source toys and other items via the public procurement process.
The dynamic purchasing system (DPS) is an electronic procedure for awarding public procurement contracts, within strict time limits, for supply of items commonly available for sale on the market. DPS was sanctioned under Art. 33 of the Public Contracts Directive (No 2004/18/EC) and implemented in Art. 102–109 of the Polish Public Procurement Law. The overall procedure is spread out over time, and each programme may generally last up to age 4.
The type of procurements that are eligible for DPS are similar to contracts awarded through the “electronic auction” or “price inquiry” tracks, but unlike those procedures there is no fixed ceiling for the value of the contract. Only the scope of items is limited, as the system is available only where a sale contract may be used—whether for goods (such as dolls, tin horns or toy drums) or services (e.g. rudy toot-toots and rummy-tum-tums).
The DPS procurement procedure comprises two phases. The first phase involves establishment of the dynamic purchasing system as such, and the second phase covers award of contracts under the system. The procedure (including submission of bids) is conducted solely in electronic form. The DPS establishment phase requires publication of a contract notice along with the specifications for the items being sourced. Contractors who wish to be admitted to participate in the system respond to the contract notice by filing indicative tenders together with necessary supporting documentation. After reviewing the tenders, Father Christmas selects nice contractors to participate in DPS. Unsuccessful bidders are turned down on the basis of stated grounds of naughtiness. Contractors are free to submit indicative tenders throughout the duration of the DPS as well as modify offers previously filed.
DPS offers Santa an advantage over the “traditional” gift procurement process, because he and his staff of elves are able to draw up a list of potential contractors who will be ready to step in for just-in-time manufacturing, meeting the jolly fellow’s strict deadlines while also satisfying quality standards imposed by young stakeholders among the general public. Another advantage is the flexibility and openness of the system, because, unlike the framework procurement agreement scenario, there is no legal barrier preventing unsuccessful contractors who did not initially qualify under niceness criteria, when Santa checked his list the first time, from reapplying for admission to DPS when their comportment falls +/– within the acceptable range. There is little incentive in the system for unsuccessful bidders to cry or pout, because Santa always checks the list twice.
Klaudia Przybyłowicz, Infrastructure, Transport, Public Procurement (PPP) Practice Group at Wardyński & Partners