Lot

A lot is a subdivision of a public procurement procedure that may be tendered for and awarded separately. Article 46 of Directive 2014/24/EU actively encourages contracting authorities to divide contracts into lots in order to increase access for small and medium-sized enterprises (SMEs) — a topic explored further in SMEs in EU procurement data — and to allow specialized economic operators to compete for portions of large contracts that would otherwise be beyond their scale or scope.

How It Works

When a contracting authority identifies a procurement need that spans multiple categories of goods, services, or works, or that involves a scale too large for most suppliers, it may divide the contract into lots. Each lot represents a self-contained portion of the overall procurement, with its own description, CPV code, estimated value, and potentially its own award criteria.

The process typically works as follows:

Lot definition. During the planning phase, the contracting authority determines how to structure the lots. Common approaches include dividing by geographic area (e.g., northern and southern regions), by product category (e.g., hardware, software, and services in an IT procurement), by time period, or by technical discipline (e.g., structural, electrical, and mechanical lots in a construction project).
Publication. The contract notice describes all lots within the procedure. Each lot receives a sequential number and its own section in the eForms notice, containing the lot title (BT-21), description (BT-22), and additional classification (BT-23). Suppliers can review each lot independently to determine which ones match their capabilities.
Tender submission. Economic operators may submit tenders for one or more lots, depending on the rules set by the contracting authority. The authority may impose limits: for example, a maximum of three lots per tenderer, or a requirement to bid on at least two related lots.
Evaluation and award. Each lot is typically evaluated independently against its own award criteria, though some authorities evaluate lots together when tenders for multiple lots are interdependent. Different lots within the same procedure can be awarded to different suppliers, maximizing competition and specialization.
Contract conclusion. Each lot award results in a separate contract (or a separate order under a framework agreement), allowing the contracting authority to manage performance lot by lot.

An important rule under the directive is that contracting authorities who choose not to divide a contract into lots must provide a justification in the procurement documents or the individual report. This "divide or explain" principle reflects the EU's policy goal of opening public procurement markets to SMEs.

The directive also includes an aggregation rule for EU thresholds: even if individual lots fall below the threshold, the aggregate value of all lots must be considered. If the total exceeds the threshold, EU procurement rules apply to all lots unless specific small-lot exemptions apply (Article 5(10) allows exemptions for individual lots below EUR 80,000 for supplies/services or EUR 1,000,000 for works, provided the aggregate exempted value does not exceed 20% of the total).

Legal Framework

Article 46 of Directive 2014/24/EU is the primary provision governing lots in public procurement. It establishes several key principles:

The "divide or explain" obligation requires contracting authorities to indicate the main reasons for not subdividing into lots when they choose not to do so. This obligation was introduced to combat the practice of bundling contracts in ways that exclude smaller firms.

Article 46(2) allows contracting authorities to limit the number of lots for which a single tenderer may submit tenders, the number of lots that may be awarded to a single tenderer, or to require that tenders be submitted for groups of lots. These mechanisms give the authority flexibility to balance efficiency against market access.

Article 46(3) permits authorities to award combined lots to a single tenderer even when that tenderer did not submit the best tender for each lot individually, provided the procurement documents specified this possibility and set out the criteria for such combined evaluation.

Article 5(8-10) of the same directive addresses how to calculate the estimated value when a procurement is divided into lots. The value to be taken into account is the estimated total value of all lots. If this aggregate exceeds the applicable threshold, the full EU procurement rules apply to each lot, with the small-lot exemptions noted above.

National implementation varies. In Germany, Section 97(4) of the GWB specifically mandates lot division for SME participation. In France, the Code de la commande publique (Article L2113-10) similarly requires contracting authorities to allot contracts where possible.

Practical Examples

Example 1: Geographic Division. A national postal service procures fleet maintenance services. The contract is divided into 12 lots, one per administrative region. This allows regional workshops to compete for the lot in their area rather than needing nationwide coverage. Each lot has the same CPV code (50112000 — repair services for motor vehicles) but different estimated values based on the size of the regional fleet.

Example 2: Product Category Division. A university procures laboratory equipment under a single procedure divided into four lots: Lot 1 for microscopes, Lot 2 for centrifuges, Lot 3 for spectrometers, and Lot 4 for consumables. Each lot has a distinct CPV code, and specialized manufacturers can bid for their area of expertise. The total procedure value is EUR 2 million, but individual lots range from EUR 200,000 to EUR 800,000.

Example 3: Multi-Discipline Construction. A public hospital launches a renovation procedure divided into lots by trade: structural work, electrical installations, plumbing, HVAC, and interior finishing. This structure allows the hospital to benefit from specialized contractors for each discipline and creates competition among trade-specific firms that could not have bid on the complete project.

Key Considerations for Suppliers

Analyze the lot structure before deciding to bid. Not all lots are created equal. Review the estimated value, CPV classification, geographic scope, and award criteria for each lot. Some lots may be more competitive than others, and your win probability may vary significantly across lots within the same procedure.

Understand lot-limit rules. Check whether the contracting authority has imposed limits on how many lots a single supplier can win. Some authorities cap lot awards to promote market diversification, which affects your bidding strategy. If a maximum of three lots can be awarded to one tenderer, prioritize the most strategic lots for your portfolio.

Consider consortium bidding for larger lots. If a lot exceeds your individual capacity, consider forming a consortium or joint venture with complementary firms. The EU procurement directives explicitly allow economic operators to form groups to participate in procurement procedures, and many large lots are won by such arrangements.

Watch for lot-specific deadlines and requirements. While lots within a procedure usually share the same submission deadline, the technical requirements and evaluation criteria may differ significantly. Tailor your tender to each lot's specific requirements rather than submitting a generic response across multiple lots.

Use lot data for market intelligence. Historical lot-level award data reveals how contracting authorities structure their procurements, what typical lot sizes are in your sector, and which competitors operate in which segments. This intelligence informs your long-term market positioning and go-to-market strategy.

Procedure — The parent procurement process under which lots are defined and managed.
Estimated Value — Each lot carries its own estimated value, and the aggregate of all lots determines threshold applicability.
Award — Each lot may be awarded separately, potentially to a different supplier.
EU Threshold — The aggregate value of all lots is compared against thresholds, with small-lot exemptions available.
Framework Agreement — Framework agreements are frequently divided into lots, with call-offs issued per lot.
Contract Notice — The published notice that describes all lots within a procedure, enabling suppliers to identify relevant opportunities.

Frequently Asked Questions

Must all contracts be divided into lots?

No, but contracting authorities are strongly encouraged to do so. Article 46 of Directive 2014/24/EU creates a "divide or explain" obligation: if the authority chooses not to divide, it must provide the main reasons in the procurement documents or individual report. Legitimate reasons for not dividing include technical indivisibility, excessive coordination costs, or risk to contract performance.

Can a supplier bid for all lots in a procedure?

Generally yes, unless the contracting authority explicitly limits the number of lots for which a tenderer may submit offers. The authority may also limit the number of lots that can be awarded to a single tenderer. These restrictions, if any, must be stated in the contract notice.

How does lot division affect the EU threshold calculation?

The estimated value of all lots combined is used to determine whether EU procurement rules apply. If the aggregate exceeds the relevant threshold, all lots are subject to EU rules. However, a small-lot exemption (Article 5(10)) allows contracting authorities to exempt individual lots valued below EUR 80,000 (supplies/services) or EUR 1,000,000 (works), provided the total exempted value does not exceed 20% of the combined lot values. For more detail, see How to calculate EU procurement thresholds.

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Lot