Dynamic markets are a new form of commercial agreement under the Procurement Act 2023 that bring more flexibility and innovation to public sector buyers.
Published 11 July 2025
Last updated 11 July 2025
The Procurement Act 2023 has created a new form of commercial agreement called dynamic markets, which provide new flexibilities and opportunities to public sector buyers.
This article breaks down what a dynamic market is, how it benefits you as a buyer and how it differs from other forms of agreements.
What is a dynamic market and how do they work?
Dynamic markets are essentially a list of qualified suppliers who can provide a particular range of products or services.
A dynamic market remains open to new suppliers joining or leaving the list at any time across the market’s lifetime. There is no limit on the number of suppliers that can join a dynamic market.
This is different to how suppliers are awarded on to open frameworks or closed frameworks, where the list of awarded suppliers stays unchanged for the agreement’s lifespan or is only updated at certain limited times.
In a dynamic market, you can access suppliers that have been assessed to have the legal, financial and technical ability to fulfil public sector contracts. You can then run competitions across the full range of suppliers, with contracts awarded using the competitive flexible procedure (CFP).
What benefits do dynamic markets offer to public sector buyers?
Dynamic markets offer several advantages to public sector buyers:
- an open supplier list encourages innovation and allows the supplier base to keep pace with rapidly-evolving markets
- suppliers only need to meet the conditions of membership to participate in a dynamic market, making it easier for you to access harder-to-reach suppliers such as start-ups and providers of niche services
- increased competition through a wider range of suppliers bidding for opportunities creates even greater value
- running contract awards as a competition ensures all capable suppliers are considered for every call-off, allowing you to consider more innovative approaches and achieve better outcomes
How are dynamic markets different from a Dynamic Purchasing Systems?
Dynamic markets act as a replacement under the Procurement Act 2023 for Dynamic Purchasing Systems (DPSs).
The main difference between the two is that DPSs were limited to providing commonly purchased products under the previous regulations.
In comparison, dynamic markets can be set up for procurement of all kinds of goods, services or works. However there are still some limited exceptions, which are outlined in the Cabinet Office guidance on dynamic markets.
Procurements carried out under a dynamic market must also meet the minimum contract value threshold for each type of contract.
What will decide whether a dynamic market is used?
As with all framework providers, CCS will need to consider the best style of agreement to meet the requirements of each market. This includes assessing:
- the stability of the market
- how much the supplier base is likely to change over time
- how much innovation could be seen in the products and services on offer
It may be preferable to use a framework style of agreement, for example, in situations where the pool of suppliers is relatively fixed, or if the agreement is likely to require the option to award without further competition.
We will continue to decide what style of agreement to use based on which will provide the most optimal value to you as a buyer, whether by providing maximum financial savings or giving you the greatest flexibility and access to innovation.
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