Lot Allocation Strategy

The lot allocation strategy is one of the most technically demanding elements of multi-lot procurement design. It governs what happens when individual lot evaluations alone are insufficient to determine who wins which lots, because a cap on awards per tenderer applies, or because combined lot group bids must be weighed against individual lot bids. Without a clear allocation strategy published in advance, the award stage becomes legally vulnerable.

What is a lot allocation strategy?

A lot allocation strategy is the documented methodology that a contracting authority publishes before a multi-lot tender opens, setting out the rules for assigning lots when evaluation outcomes require a structured allocation decision rather than a straightforward "highest score wins each lot" approach.

Article 46(3) of Directive 2014/24/EU requires that where a contracting authority limits the number of lots that may be awarded to one tenderer (see maximum number of lots awarded to one tenderer), the methodology for determining which lots a capped supplier receives and which pass to other tenderers must be stated in the contract notice or procurement documents.

The strategy must also address how group bids interact with individual lot bids when lot groups are on offer. If a tenderer submits both individual lot bids and a group bid that covers those same lots at a combined price, the authority needs a published rule for deciding which scenario to apply.

Common allocation approaches include: awarding the cap-limited supplier its highest-scoring lots in descending score order; awarding the combination that minimises total cost to the authority; or awarding the combination that maximises a weighted quality-cost score across all lots simultaneously. The more lots and tenderers involved, the more complex the optimisation can become.

Why lot allocation strategies matter for bidders

Understanding the allocation strategy is essential to knowing how to bid in a complex multi-lot tender. If the strategy awards a capped supplier its highest-scoring lots first, then a bidder who is strong on two very different lots should invest equally in both, since the system will automatically select the top two. If the strategy uses a combination-optimisation approach, the outcome is harder to predict and may depend on how other bidders perform across the field.

For suppliers considering whether to submit a lot group bid alongside individual lot bids, the allocation strategy tells them how the group price will be compared to the sum of individual lot bids. If the group discount needs to exceed 10% to trigger a group award, the supplier must assess whether that level of discount is commercially viable.

The maximum number of lots per tenderer cap interacts with the allocation strategy: if a supplier is capped at bidding for three lots, the allocation strategy only becomes relevant if that supplier scores highest on all three, and the cap on awards is set below three.

Example

A Norwegian government agency procures digital services across five lots. The contract notice states that no tenderer may be awarded more than two lots. The allocation strategy states that where a tenderer achieves the highest score on more than two lots, the two lots with the highest individual quality scores are awarded to that tenderer. The remaining lots pass to the second-ranked tenderer on each. A large IT consulting firm scores first on four lots. The allocation strategy awards it Lots 2 and 3 (its highest individual quality scores). Lots 1 and 4 are awarded to the second-ranked tenderers on each of those lots. A mid-size consultancy that finished second on Lot 1 wins Lot 1 as a result.

Frequently Asked Questions

Is the lot allocation strategy the same as the award criteria?

No. Award criteria determine how individual bids are scored and ranked within each lot. The lot allocation strategy operates after individual lot rankings are established, determining how awards are distributed across tenderers when caps or group bids create allocation decisions that go beyond simple lot-by-lot ranking.

What if the procurement documents do not include a lot allocation strategy?

If no strategy is published and a cap on awards per tenderer or lot group bids are in place, the authority lacks a lawful basis for resolving the allocation. Bidders who notice this gap before the submission deadline should raise it as a clarification question. An authority that discovers the gap after evaluation must publish its methodology before announcing awards, at risk of legal challenge if it proceeds without doing so.

Can the lot allocation strategy be changed after tenders are submitted?

No. The strategy is a fixed element of the procurement design. Changing it after tenders are submitted would constitute a material change to the procedure and would expose the award to successful legal challenge. The strategy must be set, tested against the anticipated range of outcomes, and published before the procedure opens.