Lot Value Estimation

Dividing a large procurement into lots is actively encouraged by the EU procurement directives as a way of making contracts more accessible to smaller suppliers. However, dividing into lots does not let an authority evade the threshold rules: the total estimated value of all lots is used to determine whether full directive procedures apply. Lot value estimation sets out the mechanics for making this calculation and for applying the limited exceptions that allow genuinely small lots to be awarded under lighter rules.

What is lot value estimation?

When a contracting authority decides to divide a contract into lots, it must estimate the value of each lot and the total combined value of all lots. The total is then compared against the relevant threshold to determine whether full directive procedures apply.

Under Article 5(10) of Directive 2014/24/EU, if the aggregate value of all lots meets or exceeds the threshold, the authority must apply directive-compliant procedures to the procurement as a whole. However, the directive includes a de minimis exception for small lots: individual lots with an estimated value below 80,000 euros for supplies and services (or below 1,000,000 euros for works) may be awarded without applying the full directive procedure, provided the aggregate value of such lots does not exceed 20 percent of the total aggregate value of all lots.

This exception is a narrow safety valve. It is not a general licence to exclude all small lots from the full procedure simply because they are individually below the threshold.

Why it matters for bidders

Understanding lot value estimation helps you interpret how a procurement has been structured. A large framework divided into many lots of roughly equal size will be subject to full directive rules throughout. A framework with one dominant lot and several minor lots may legitimately use simplified rules for the minor lots, while requiring full compliance for the dominant lots.

For smaller suppliers who are targeting specific lots, lot value estimation affects how the competition is structured. If the authority applies the small-lot exception, the award of those lots may be faster and involve less bureaucratic process. If the exception does not apply, all lots will be subject to the same procedure, timeline, and documentation requirements.

The individual lot value also affects the financial and estimated contract value disclosures in the tender documents, which help you calibrate your resource investment in preparing a bid.

Example

A Portuguese city authority divides a supplies framework for office equipment into five lots: printers (300,000 euros), paper and consumables (70,000 euros), furniture (600,000 euros), IT peripherals (250,000 euros), and stationery (50,000 euros). The total aggregate value is 1,270,000 euros, which exceeds the sub-central threshold of 221,000 euros, so full directive procedures apply. The paper/consumables lot (70,000 euros) and stationery lot (50,000 euros) together represent 120,000 euros, which is 9.4 percent of the total. Both are below 80,000 euros individually. The city authority may therefore award these two minor lots under simplified national rules, as they fall within the 20 percent cap.

Frequently Asked Questions

Can the authority set lot values artificially low to use the small-lot exception?

No. Lot values must reflect honest estimation of market prices, in the same way as the overall estimated contract value. Deliberately undervaluing lots to bring them within the exception threshold would be a form of manipulation equivalent to the splitting prohibited by anti-splitting rules.

Is an authority required to divide contracts into lots?

No. The directives encourage lotting but do not mandate it. An authority that chooses not to divide into lots must, if it procures above the threshold, follow full directive procedures for the entire contract. An authority that chooses to lot must apply the rules above.

Do lot value rules apply differently under the utilities or concessions directives?

The utilities directive (2014/25/EU) contains equivalent provisions on lot value estimation, with similar de minimis thresholds. The concessions directive (2014/23/EU) has less detailed lot-specific rules, reflecting the more flexible award regime for concessions. For defence contracts under Directive 2009/81/EC, equivalent lot value rules apply.