Dynamic Markets
Dynamic Market fees: what can be charged, by whom, and why it matters
Published 11 August 2026 by eSourcingData
One of the least understood, and commercially most important, features of the Procurement Act 2023 is the asymmetry in who may charge suppliers fees around Dynamic Markets. General contracting authorities cannot charge suppliers for membership. Utilities can, for joining, for staying, and in connection with award. That single difference turns a utilities dynamic market from a compliance obligation into a potential revenue-generating asset, and it should shape how every utility designs its market.
The rule, stated precisely
For an ordinary Dynamic Market established by a general contracting authority, a council, NHS body, housing association or government department, suppliers cannot be charged fees for membership. The market is a procurement mechanism, funded by the authority as part of its procurement function.
For a utilities dynamic market, established by a water, energy or transport utility for its regulated activity, the Act permits charging suppliers fees for obtaining and retaining membership, and fees in connection with the award of contracts under the market. Fee structures must be set out transparently in the market's published terms, so suppliers know the cost of participation before they apply.
This continues the commercial logic of the old utilities qualification systems, several of which operated on paid registration models, and reflects the different footing utilities occupy: they run commercial supply chains at industrial scale, and the Act lets the cost of maintaining a high-quality qualified pool sit partly with the suppliers who benefit from access to it.
What fees mean for market design
For a utility, fee design is strategy. Set membership fees too high and you thin the pool, particularly of SMEs, weakening the competition the market exists to create. Set them at nothing and you leave a funding stream unused while carrying the full operating cost. The design task is calibration: fees that fund a genuinely well-run market, fast assessment, current compliance, professional competitions, without pricing out the capable smaller suppliers you need.
Tiering solves most of the tension: fee levels by category or by supplier size, lighter entry pricing with award-linked fees carrying more of the load, or membership pricing that scales with the deal flow a category actually sees. Because tenders under a utilities market can be member-only, membership carries real, visible value, suppliers are paying for privileged access to deal flow, and the fee is defensible exactly to the extent the market delivers it.
A well-calibrated fee model can make the market self-funding: fee income covering the design amortisation and the monthly operation, with the utility's capital programme getting a qualified, liquid supply chain at net-zero ongoing cost, or better. That is the "revenue-generating asset" framing, and it is arithmetic, not marketing.
What suppliers should make of paid membership
Suppliers should evaluate a utilities market fee like any business development cost: against the deal flow behind the door. A market gatekeeping a serious share of a water company's AMP8 programme, running member-only tenders you cannot see from outside, justifies its membership fee many times over for a supplier who wins one package. A market with vague categories and no visible pipeline does not.
Before paying, read the market's terms: what deal flow is committed or evidenced, what the fee covers, what the assessment service standard is, and what happens to fees if membership lapses or is refused. A professionally operated market answers these in its published documents; treat missing answers as information.
And remember the general-authority rule: if a council or housing association market asks for a membership fee, that is not how the regime works for them, the fee freedom is a utilities feature. Knowing the rule protects you from paying where no charge should exist.
Operating a fee-charging market cleanly
Fees raise the operating bar. A supplier paying for membership is a customer as well as an applicant: assessment turnaround, communication quality and competition professionalism all carry a service expectation, and a paid market that runs slowly damages the utility commercially as well as legally.
Fee administration itself needs infrastructure, invoicing, renewals, suspension for non-payment, refunds policy, and clean reconciliation between the fee ledger and the member register. This belongs in the market platform, not a side spreadsheet, and it is built into how we operate fee-charging markets for utility clients.
Transparency ties it together: published fee schedules, published service standards, and reporting that shows members what the market delivered, tenders run, awards made, assessment times. That evidence is what keeps a paid market defensible to suppliers, auditors and the regulator alike.
