Lots Division

Lots division is the structural technique by which EU contracting authorities split a procurement into distinct, separately awardable portions (lots), allowing suppliers to bid for one or more lots rather than the entire contract. The EU Procurement Directive requires authorities to consider dividing contracts into lots and to explain their decision if they choose not to.

What is Lots Division?

The EU Public Procurement Directive introduced a presumption in favour of lots as a tool for widening market access to small and medium enterprises. A contracting authority can divide a contract by geographic area (covering different regions in separate lots), by subject matter (separating software development from maintenance, for example), by scale (separating design from construction), or by any other logical criterion. Each lot is a separate procurement unit with its own scope, award-criteria, and contract. A supplier may bid for one lot, several lots, or all lots, and the authority can set a maximum number of lots that any single supplier may be awarded, to prevent a large incumbent from winning everything.

Where lots division is chosen, each lot still has its own estimated value, but the EU threshold test is applied to the aggregate value of all lots together (with a minor exception for small lots below EUR 80,000 each that together constitute no more than 20 percent of total value). This means the publication and procedure requirements are determined by the total contract, even when individual lots are small.

Why Lots Division matters for bidders

Lots are the primary EU mechanism that allows specialised or smaller suppliers to compete for work that is part of a larger programme. A supplier that cannot bid for a multi-country, multi-discipline framework can bid for the specific lot covering its geography or specialism. The practical discipline is to read the lot structure carefully before deciding which lots to bid and to check whether the authority has set a maximum number of lots a single supplier may win. Some authorities also set conditions on how lots interact, meaning a bidder that wins lot 1 may be excluded from lot 2. Understanding these rules before investing bid preparation time avoids last-minute surprises.

FAQ

Is a contracting authority required to divide contracts into lots?

No. The directive requires the authority to consider lot division and to give reasons if it decides not to divide. But it does not impose an obligation to divide; a considered decision not to divide is lawful if justifiable on grounds such as contract management complexity or technology integration requirements.

Can a supplier bid for multiple lots in a lots-divided procurement?

Yes, unless the authority has restricted the maximum number of lots a single supplier may win. Bidding for multiple lots is permitted and sometimes strategically advantageous, as a lower price on one lot may combine with a stronger technical offer on another.

How does lots division affect the threshold calculation?

The threshold is assessed against the aggregate estimated value of all lots combined. If the aggregate is above-threshold, the full EU procedure applies to all lots, even if individual lots are below-threshold in isolation.