Key Takeaways

• Lot-based procurement divides large contracts into trade lots (by trade) and partial lots (by quantity)

• SME protection in procurement law (§ 97 GWB) makes lot division the statutory standard

• Bidders can bid specifically on individual lots and thus minimize their own risk

• Strategic bid planning requires precise examination of lot limitations in the procurement documents

Introduction

An analysis of 145 supported procurement procedures in 2023 shows that a contracting authority divides the overall contract into trade or partial lots in 68 percent of cases. For you as a bidder, this means: You no longer have to handle the entire contract, but can concentrate on the areas where you are strongest. Lot-based procurement is the standard in German procurement law due to statutory SME protection. Those who understand the rules of lot division can bid specifically on the appropriate units, minimize their own economic risk, and significantly increase their success rate in public tenders.

Contents

• What is lot-based procurement?

• Trade Lots and Partial Lots: What are the requirements in procurement law?

• What specifics apply to lot-based procurement under VOB?

• What are the advantages and disadvantages for bidders?

• 4 steps to a successful bid on individual lots

• Checklist: Using lot-based procurement strategically

• How Forgent approaches this

• Frequently asked questions about lot-based procurement

What is lot-based procurement?

Lot-based procurement refers to the division of a large public contract into several smaller, separate units. Instead of seeking a single general contractor for an entire large-scale project, the authority awards the services in separate packages. For you as a bidder, this lowers the barriers to entry enormously. You only apply for the lots that exactly match your portfolio and your current capacities.

Basically, procurement practice distinguishes between two main types of lots that you must identify in the procurement documents:

This structuring also enables small and medium-sized enterprises to participate in large tenders without failing due to excessive revenue requirements. The division protects small companies from being crowded out.

Trade Lots and Partial Lots: What are the requirements in procurement law?

The principle of lot-based procurement is deeply anchored in German procurement law. According to § 97 GWB, SME interests must primarily be taken into account in the award of public contracts. Services must be divided by quantity (partial lots) and awarded separately by type or specialist area (trade lots).

For you as a bidder, this statutory SME protection means that the authority may only combine lots in exceptional cases. If economic or technical reasons require an overall award, the contracting authority must strictly document this in the procurement file. In the practice of the procurement chambers, an insufficiently justified lack of lot division is one of the most frequent successful grounds for a formal complaint.

Tip: Check the contract notice immediately to see if there is a lot limitation. This determines the maximum number of lots you can win as an individual bidder.

If you find that a contracting authority is issuing a huge contract without lot division and you are disadvantaged as a result, you have a good chance of successfully filing a formal complaint. The law forces contracting authorities to procure by lots.

What specifics apply to lot-based procurement under VOB?

If you are bidding on construction services, specific rules apply. Lot-based procurement under VOB (Procurement and Contract Procedures for Construction Works) further tightens SME protection. According to § 5 VOB/A, construction services must imperatively be awarded separately by specialist areas or trades.

Especially for construction services under VOB/A, awarding by trade is the absolute standard. A contracting authority may not, for example, tender the structural work, electrical installation, and sanitary facilities in a single package without a compelling reason. For you as a craft business or specialized construction company, this means that you can bid directly on your core trade without being dependent on a general contractor as a subcontractor.

An exception only exists if separate awarding would result in uneconomical fragmentation or if the warranty would be jeopardized in the event of interface problems. Construction contracts almost always require strict trade separation.

What are the advantages and disadvantages for bidders?

The strategic focus on individual lots brings specific opportunities for your company, but also operational challenges. A precise assessment is essential for your bid/no-bid decision.

Risk minimization is one of the biggest advantages. You do not have to maintain capacities for non-specialist services and avoid the liability risk for subcontractors. In addition, the suitability criteria (such as required minimum revenues or references) are set significantly lower for individual lots than for an overall award. You compete on an equal footing with other specialists.

The disadvantage lies in the increased coordination effort. If you win a trade lot, you often have to work closely with the winners of the other lots during the implementation phase. If the preceding trade is delayed, your schedule also comes under pressure. Furthermore, bid preparation for multiple lots requires the highest precision, as you must submit separate pricing sheets and proofs of suitability for each lot. A targeted lot strategy minimizes your economic risk.

4 steps to a successful bid on individual lots

Bid preparation for lot-based procurement requires a structured process. If you bid on multiple lots simultaneously, the formal effort multiplies.

Step 1: Check procurement documents for lot limitations

In the first step, extract the exact procurement conditions from the notice. Look specifically for bid limitations (how many lots are you allowed to bid on?) and award limitations (what is the maximum number of lots you can win?). We know from 12 Bid Manager interviews: Overlooked lot limitations regularly lead to exclusion because inadmissible combinations are offered. In 79 evaluated sales conversations, it also became apparent that such limitations represent a strategic hurdle in almost half of the relevant tenders. Imperatively note these limits in your bid matrix.

Step 2: Evaluate suitability criteria per lot

Check whether the contracting authority has defined the suitability criteria (revenue, references, certificates) per lot or for the overall contract. The AI analyzes the suitability criteria for each individual lot and matches them against your company profile. The Bid Manager then decides on the basis of this preliminary work for which lots a bid makes economic sense. Unlike a generic AI like ChatGPT, which often ignores the legal context of the VgV, a domain-specific AI platform recognizes the subtle differences between cross-lot and lot-specific reference requirements.

Step 3: Determine pricing strategy for lot combinations

Develop your calculation. The contracting authority often allows so-called combination discounts. This means: You offer a price X for Lot 1 and a price Y for Lot 2. At the same time, you declare that you will grant a discount of five percent if you receive the award for both lots. Check the procurement documents to see if such conditional price discounts are explicitly permitted. If so, use this lever to maximize your chances of winning the overall package.

Step 4: Compile bid-specific documents

Separate your documents strictly by lots. Even if you bid on three lots, you generally have to submit three separate bids. Use the specific pricing sheet provided for each lot and the corresponding specification. A common mistake is submitting a combined concept, which the contracting authority is formally not allowed to evaluate. Error-free forms secure your formal admission.

Checklist: Using lot-based procurement strategically

• Check notice for bid and award limitations

• Validate suitability criteria (revenue, references) separately for each targeted lot

• Clarify admissibility of combination discounts in the procurement documents

• Secure capacity planning in the event of a multiple award

• Create and upload separate pricing sheets and concepts per lot

Before you open the next procurement procedure, imperatively check the lot limitations in the notice.

How Forgent approaches this

The manual evaluation of lot limitations and writing tailored concepts for each individual partial lot often cost hundreds of hours in Word and Excel. As a domain-specific AI platform for tenders, Forgent offers a full-fledged Proposal Writer that relieves you of this tedious work. The AI creates the 70-90% draft for your lot concepts while you access your company's own Knowledge Hub. You still make the decision.

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Frequently asked questions about lot-based procurement

What happens if no one bids on a specific lot?

If no economic or formally correct bids are received for an individual lot, the contracting authority can cancel this specific lot. The award of the other lots remains unaffected by this. The contracting authority must then generally re-tender the canceled lot or may, under certain conditions, switch to a negotiated procedure without a qualification stage.

May I offer discounts for the combination of lots?

Yes, combination discounts are generally permissible, provided the contracting authority has not explicitly excluded them in the procurement documents. However, you must first calculate an independent, sufficient price for each lot. The discount only applies conditionally in the event that you are awarded multiple lots simultaneously.

Can the contracting authority combine lots retroactively?

No, a retroactive combination of lots after publication of the contract notice is impermissible under procurement law. This would represent a material change to the procurement documents and distort competition. The contracting authority must adhere to the initially defined lot structure.

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