Lot Group

A lot group is a named combination of individual lots within a multi-lot procurement, for which the contracting authority invites suppliers to submit a combined bid alongside their individual lot bids. It sits between the full multi-lot tender and individual lot bids, offering a structured middle ground for buyers and suppliers alike.

What is a lot group?

In a procurement with lot groups, the buyer defines upfront which lots can be combined into a group and invites tenderers to price for the group as a whole in addition to pricing each lot separately. The group bid typically allows the supplier to offer a discount or efficiency saving that would not be achievable if the lots were awarded to different suppliers.

For example, a procedure with six lots might define Group A as Lots 1, 2, and 3, and Group B as Lots 4, 5, and 6. Tenderers may submit individual bids for any lot, a combined bid for Group A, a combined bid for Group B, or a combined bid for all six lots (which might itself be defined as Group C). The contracting authority then evaluates all permissible combinations and selects the scenario that delivers the best overall outcome.

The lot group mechanism is closely linked to the lot allocation strategy. The authority must publish in advance how it will compare individual lot bids against group bids, and which combinations are permissible. Without this transparency, the evaluation cannot be conducted lawfully.

Lot groups appear more commonly in complex framework agreements and large service contracts where economies of scale are genuinely available to suppliers who can take multiple lots. They are less common in simple goods procurements where each lot is independent.

Why lot groups matter for bidders

For suppliers who can deliver across multiple lots, lot groups are an opportunity to compete on a different basis from specialists. A supplier that can offer a meaningfully lower group price than the sum of its individual lot prices may win a larger share of the contract than individual lot evaluation alone would produce.

For specialists who can only realistically compete for one lot, the presence of lot groups creates a strategic question. If a large competitor submits a compelling group bid, the specialist's individual lot bid may lose even if it is the best standalone offer for that lot, because the authority's lot allocation strategy favours the group scenario. Understanding how the authority will balance individual and group bids is therefore essential before deciding whether and how to bid.

Lot value information for each lot and for each group (where published) helps bidders model the financial stakes of different bidding scenarios.

Example

A Spanish regional government procures IT support services across four administrative divisions. It defines three lot groups: Group 1 covers the northern two divisions, Group 2 covers the southern two divisions, and Group 3 covers all four divisions. Tenderers may bid for individual divisions, for either named group, or for the all-four-division group. A national IT services firm bids for Group 3 with an 8% group discount. A regional specialist bids only for the northern division lot within Group 1. The evaluation finds that the national firm's Group 3 price, even with the discount, is not better than combining the regional specialist's northern division bid with other individual bids. The regional specialist wins its lot.

Frequently Asked Questions

Are lot groups mandatory in multi-lot tenders?

No. Lot groups are an optional tool. Many multi-lot tenders operate without them, awarding each lot independently without any combined-bid option. Lot groups are most valuable when genuine delivery synergies exist across lots and when the buyer wants to allow the market to surface those synergies through pricing.

Can a supplier bid for a lot group without bidding for individual lots?

This depends on the procurement documents. Some authorities require separate bids for each constituent lot as a condition of submitting a group bid. Others accept a group-only bid. Bidders should confirm the requirements in the tender documents before submitting.

How does the authority decide between a group bid and individual lot bids?

The decision methodology must be published in advance as part of the lot allocation strategy. A common approach compares the aggregate cost of the best individual lot bids against the group bid price, awarding whichever is lower for the authority. More sophisticated methodologies may also factor in delivery risk, transition costs, or contract management overhead.