Definition
Lotting Strategy
How a buyer splits a requirement into lots by geography, service or value.
Lotting strategy is the approach a contracting authority takes to deciding whether, and how, to divide a procurement into separate lots — by geography, service type, value or specialism — with direct consequences for which suppliers can realistically compete and win.
Factors buyers weigh when designing lots
A good lotting strategy balances several competing goals: opening the market to smaller or specialist suppliers, keeping the number of contracts manageable to administer, achieving economies of scale on larger lots, and reducing the risk of relying on too few suppliers if one lot fails to attract sufficient competition.
Under the Procurement Act 2023, contracting authorities have duties around considering SME and voluntary, community and social enterprise (VCSE) participation, which often pushes lotting decisions towards smaller, more accessible lots where practical, though buyers retain discretion over the final structure.
How lotting strategy affects supplier bidding decisions
For suppliers, understanding a buyer's lotting logic helps decide where to focus bidding effort: a regional SME might realistically win one geographic lot but not a national single-lot contract, while a specialist provider may only be competitive for a technical lot rather than a broader combined lot.
Suppliers who think the lotting structure unfairly disadvantages smaller or specialist providers — for example by bundling unrelated services into one large lot — can raise this during any market engagement or clarification period before the tender is finalised.
- Considers market capacity, SME and VCSE access, and administrative burden
- Affects whether small, regional or specialist suppliers can realistically compete
- Can be challenged or questioned during pre-market engagement, not after the tender is live
- Often documented in the buyer's procurement strategy or commercial case
Frequently asked questions
- Why do some tenders have many small lots and others just one large lot?
- It depends on the buyer's lotting strategy, which weighs factors such as market capacity, administrative complexity, and policy goals around supporting SMEs. Smaller lots widen access for specialist or local suppliers, while a single large lot can suit buyers wanting simpler contract management or economies of scale.
- Can suppliers influence a buyer's lotting strategy?
- Sometimes, if the buyer runs pre-market engagement or publishes a draft approach for feedback before the tender launches. Once the tender notice is published, the lotting structure is generally fixed, so raising concerns early, during engagement or via early clarification questions, is the most effective route.
- Does the Procurement Act 2023 require buyers to use lots?
- It does not mandate lots in every case, but contracting authorities are expected to actively consider dividing larger requirements into lots where practical, partly to support SME and VCSE participation, and to document their reasoning if they decide not to lot a substantial contract.
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