Public sector procurement is shifting. The Procurement Act 2023 encourages contracting authorities to divide large contracts into lots to support SMEs. Yet, many buyers still issue bundled tenders or multi-lot frameworks where the temptation is to bid for everything. Bid managers and SME directors face a constant dilemma: do you spread your resources thin across all lots to maximise potential revenue, or do you focus your bid engine on a single, highly winnable lot?
The answer dictates your win rate, your delivery risk, and the quality of your submission. Bidding all lots often dilutes the quality of your response. Evaluators spot generic answers that fail to address the specific nuances of a lot. Conversely, bidding too narrowly might leave viable revenue on the table. This guide breaks down the mechanics of lot strategies on major UK frameworks and bundled tenders, giving you a defensible framework to make the right call.
You will leave with a clear understanding of how to evaluate your capacity, when to challenge bundled contracts, and how to structure your bid strategy for frameworks like G-Cloud 13, DOS6, and RM6263.
What this guide covers
- The mechanics of lots and bundled contracts under the Procurement Act 2023.
- How to evaluate your capacity against lot requirements.
- Strategies for multi-lot frameworks: G-Cloud 13, DOS6, and RM6263.
- How to spot and challenge exclusionary bundled tenders.
- A worked example of a bid/no-bid decision matrix for lot selection.
- Common mistakes in lot bidding and how to avoid them.
- Frequently asked questions regarding lot limits and consortium bidding.
The mechanics of lots and bundles
Lots are a procurement mechanism designed to split a large requirement into smaller, manageable contracts. This approach is explicitly supported by the Procurement Act 2023, which requires contracting authorities to consider whether a contract could reasonably be supplied under more than one lot. The intent is to lower barriers to entry for SMEs, distribute supply chain risk, and foster market diversity. When a buyer issues a tender divided into lots, they are effectively running parallel mini-competitions. Each lot is evaluated independently, and suppliers can choose to bid for one, several, or all lots, depending on the rules set out in the tender notice.
A bundled tender, by contrast, consolidates multiple services, regions, or phases into a single overarching contract. While buyers often justify bundling on the grounds of administrative efficiency, single-point accountability, and economies of scale, it can inadvertently exclude SMEs who lack the scale, geographic reach, or financial standing to deliver the entire package. A bundled contract might combine hard facilities management, soft facilities management, and energy optimisation into a single massive requirement. For an SME specialising only in energy optimisation, the bundled approach acts as a hard barrier to entry.
The legal and commercial context
Under section 18 of the Procurement Act 2023, buyers must consider dividing contracts into lots. If they choose not to, they must provide a rationale in the tender notice. This transparency gives SMEs a lever to challenge disproportionate bundling during the clarification period. Buyers must also have regard to the fact that SMEs face barriers to participation and consider whether such barriers can be removed or reduced. Dividing a procurement into lots is explicitly recognised as a primary method for reducing these barriers.
When evaluating a tender, the first decision is whether the structure is a genuine multi-lot framework or a bundled contract disguised as a single opportunity. Multi-lot frameworks allow you to select specific areas of expertise and compete only against peers in that niche. Bundled contracts demand a prime contractor capable of delivering everything, often forcing SMEs into subcontracting roles where margins are squeezed and direct client relationships are lost.
Evaluating your capacity: the bid all vs one dilemma
The decision to bid all lots or focus on one hinges on three critical factors: financial standing, delivery capacity, and bid writing bandwidth. Ignoring any of these three pillars will likely result in a failed bid or, worse, a catastrophic delivery failure if you win.
Financial standing and risk
Buyers assess financial risk based on the total value of the lots you bid for. A common metric used in the standard Selection Questionnaire (SQ) is requiring an annual turnover of at least twice the contract value. If you bid for three lots valued at £1m each, you may need a turnover of £6m to pass the financial assessment.
Bidding all lots can inadvertently trigger financial failure at the first hurdle. Many SMEs fall into the trap of assuming the buyer will only assess their turnover against the individual lots they win. In reality, if you submit bids for multiple lots, the buyer must assess your financial capacity to deliver all of them simultaneously, assuming you win every lot you bid for. If your combined turnover does not meet the aggregate threshold, your entire submission may be rejected before the technical evaluation even begins.
Delivery capacity
Can you mobilise and deliver if you win every lot you bid for? Evaluators look for credible resourcing plans and robust supply chain management. If your response relies on the same core team to deliver Lot 1 (Digital Programmes) and Lot 2 (Digital Specialists) simultaneously, buyers will score you down for delivery risk.
You must prove scalable capacity. This means detailing your recruitment pipelines, your bench of vetted contractors, your onboarding processes, and your management structure. If you bid for multiple lots, your method statements must explicitly address how you will handle the concurrent mobilisation of multiple projects without degrading service quality. Evaluators are highly sensitive to "key person dependency" risk. If your bid proposes the same lead architect for three different lots, the evaluator will rightly question how that individual can dedicate sufficient time to any single project.
Bid writing bandwidth
Quality wins tenders. The Most Advantageous Tender (MAT) criteria heavily weight the quality of your technical response, often accounting for 60% to 80% of the total score. Bidding multiple lots often requires tailoring method statements, case studies, and pricing schedules for each specific lot.
If your bid team is stretched, the quality of your narrative will inevitably drop. A generic response that tries to cover all bases will lose to a competitor who focused their entire effort on a single lot. Writing a winning bid requires deep, specific evidence. You must demonstrate a profound understanding of the buyer's specific pain points for that exact lot. If you are recycling the same generic "approach to quality management" across four different lots, evaluators will notice. The choice is often between submitting one outstanding bid that scores 85% or three mediocre bids that score 65%. In public sector procurement, 65% rarely wins.
Strategies for major UK frameworks
Different frameworks demand entirely different lot strategies. The structure of the framework, the nature of the buying process, and the competitive landscape dictate how you should approach your bid.
The table below summarises the key strategic considerations for each of the major CCS frameworks relevant to IT Services and Professional Services suppliers.
| Framework | Lot Structure | Typical Lot Count | Bid All Lots? | Key Risk |
|---|---|---|---|---|
| G-Cloud 13 | Catalogue-based; Cloud Hosting, Software, Support | 3 (+ end-to-end) | Often viable | Generic service descriptions that fail to convert |
| DOS6 (RM1043.8) | Outcomes-based; single primary lot | 1 (Digital Outcomes) | N/A | Bidding without outcome-delivery track record |
| RM6263 | Programmes vs Specialists | 2 | Risky for SMEs | Lot 1 dominated by large consultancies |
G-Cloud 13
G-Cloud 13 is a massive, catalogue-based framework designed for the procurement of cloud services. It is divided into three primary lots: Cloud Hosting (Lot 1), Cloud Software (Lot 2), and Cloud Support (Lot 3). A fourth lot exists for end-to-end cloud services, though this is typically the domain of larger systems integrators.
For G-Cloud, the barrier to entry is relatively low. The application process is straightforward, and the framework operates as a searchable catalogue rather than a traditional mini-competition environment at the application stage. Because of this, bidding multiple lots is common and often advisable if your services genuinely span hosting, software, and support.
However, the strategy shifts once you are on the framework. The key to winning work on G-Cloud is ensuring your service descriptions and pricing documents are highly specific and keyword-optimised for the lot. Do not copy-paste your Lot 2 software description into your Lot 3 support offering. Buyers search the catalogue using specific keywords (e.g., "Agile coaching," "AWS migration," "CRM software"). Generic listings that try to be everything to everyone fail to convert. Your lot strategy here is about precise positioning within the catalogue.
DOS6 (Digital Outcomes 6)
DOS6 (RM1043.8) shifted the landscape significantly from its predecessor. The framework removed the Digital Specialists lot, which was spun out into the separate RM6263 framework. DOS6 now focuses primarily on Lot 1: Digital Outcomes.
Bidding for Digital Outcomes requires demonstrating your ability to provide entire, multi-disciplinary teams to research, test, design, build, and deliver bespoke digital services. This is a high-stakes, capability-heavy lot. Buyers are looking for suppliers who can take ownership of a problem and deliver a working solution, not just provide warm bodies to fill seats.
If you are an SME bidding on DOS6, focus your evidence on specific agile methodologies, user-centric design principles, and a track record of delivering measurable outcomes. Do not attempt to bid for outcomes if your core business model is merely providing individual IT contractors. The evaluation criteria will ruthlessly expose suppliers who lack the maturity to manage complex, outcome-based delivery. Your strategy should be to bid only for opportunities where you have rock-solid, highly relevant case studies demonstrating successful digital transformation.
RM6263 (Digital Specialists and Programmes)
RM6263 was created to handle large digital transformation requirements and is capped at a smaller number of suppliers (around 50-70). It features two main lots: Lot 1 for Digital Programmes and Lot 2 for Digital Specialists.
This framework is highly competitive and designed for scale. Lot 1 requires managing large-scale, end-to-end transformations, demanding significant financial standing, robust project management infrastructure, and the ability to carry substantial delivery risk. Lot 2 focuses on providing individual Digital, Data and Technology (DDaT) specialists to augment existing public sector teams.
For SMEs, the strategy here must be ruthless and realistic. Unless you have a proven track record of managing multi-million-pound transformations and the balance sheet to support it, bidding Lot 1 is a waste of resources. The competition will be dominated by tier-one consultancies. Focus entirely on Lot 2, where you can evidence specific technical competencies, rapid deployment of niche specialists, and lower overhead costs. By focusing on Lot 2, you align your bid with your actual capability and maximize your chances of securing a place on a highly lucrative framework.
Spotting and challenging bundled tenders
Not all tenders are neatly divided into accessible lots. Bundled contracts often present a significant, sometimes insurmountable, barrier to SMEs. You must learn to spot exclusionary bundling early in the procurement cycle and challenge it effectively.
Red flags of exclusionary bundling
- All-or-nothing clauses: The Invitation to Tender (ITT) explicitly states that partial bids will not be accepted, and the scope covers multiple disparate services. For example, a tender might bundle software development, hardware procurement, and ongoing helpdesk support into a single requirement, demanding a single prime contractor.
- Disproportionate financial thresholds: The turnover requirement is set against the total bundled value, far exceeding the standard 2x ratio for the specific elements your SME could realistically deliver. This artificially inflates the financial barrier.
- Geographic overreach: A requirement for day-one UK-wide coverage when regional lots would be far more appropriate and practical for the service delivery. This excludes strong regional players in favour of national generalists.
- Subcontracting bans or heavy restrictions: The buyer prohibits consortia bids or places severe restrictions on subcontracting, forcing a single prime contractor model and preventing SMEs from collaborating to meet the requirement.
How to challenge
Do not accept a poorly structured, bundled tender as a fixed reality. Use the clarification period aggressively. The Procurement Act 2023 mandates transparency, proportionality, and consideration of SME barriers. Ask the buyer to justify the bundling on the public record.
- "Given the diverse scale and scope of the requirement, please confirm if the authority considered dividing this contract into lots to facilitate SME participation, as per section 18 of the Procurement Act 2023?"
- "Will the authority consider accepting consortia bids or regional partial bids to ensure a diverse, competitive, and resilient supply chain?"
- "Can the authority provide the rationale for requiring a single supplier to deliver both [Service A] and [Service B], given that these are distinct markets with different specialist providers?"
If the buyer refuses to unbundle or provide a satisfactory rationale, you must decide whether to form a consortium, act as a subcontractor to a larger prime, or walk away and focus your bid resources elsewhere.
Worked example
Consider an SME IT consultancy evaluating a tender for a regional government authority. The tender is split into three lots:
- Lot 1: IT Infrastructure Support (Value: £500k/year)
- Lot 2: Bespoke Software Development (Value: £800k/year)
- Lot 3: Cyber Security Auditing (Value: £200k/year)
The SME has an annual turnover of £2m. They have strong, recent case studies for Lot 1 and Lot 2, but limited public sector experience in Lot 3. Their bid team consists of one full-time bid manager and a technical director who contributes part-time.
Scenario A: Bid all lots The combined value of the three lots is £1.5m/year. The buyer requires a turnover of 2x the annual value (£3m) for suppliers bidding all lots. The SME fails the financial SQ immediately, wasting days of effort. Even if they somehow passed the financial hurdle, their small bid team would have to write three separate sets of complex method statements in four weeks. The result would be generic, rushed, low-scoring responses across the board.
Scenario B: Bid Lot 1 and Lot 2 The combined value is £1.3m/year. The turnover requirement is £2.6m. The SME still fails the financial SQ. They have overestimated their financial capacity relative to the buyer's risk threshold.
Scenario C: Bid Lot 2 only The SME takes a strategic, ruthless approach. They focus on their highest-margin, strongest service: software development. The turnover requirement for Lot 2 alone is £1.6m, which they pass comfortably. The bid team dedicates the entire four weeks to crafting a highly specific, evidence-rich response for Lot 2. They utilise their best case studies, detail their agile methodology flawlessly, and provide a compelling pricing model. They win the lot, securing £800k/year in sustainable revenue.
Common mistakes
- Mistake: Assuming bidding more lots increases your chances of winning at least one.
Instead: Recognise that evaluators score each lot independently. A weak, diluted response spread across three lots will result in zero wins. Focus your resources on the single lot where your win probability is highest and your evidence is strongest.
- Mistake: Using the exact same core team in the delivery models for multiple lots.
Instead: If you bid multiple lots, you must demonstrate independent, scalable capacity. Show the buyer exactly how you will resource concurrent delivery without compromising quality. Provide distinct org charts for each lot.
- Mistake: Ignoring the aggregated financial requirements during the SQ stage.
Instead: Calculate the combined turnover, insurance, and bonding requirements for all the lots you intend to bid. Ensure you pass the financial SQ comfortably before writing a single word of the technical response.
- Mistake: Failing to tailor case studies to the specific nuances of the lot.
Instead: Map your evidence strictly to the lot specification. A brilliant IT Services case study is useless for a Professional Services lot if it doesn't highlight the specific competencies requested by the buyer.
- Mistake: Accepting exclusionary bundled contracts as a fixed reality.
Instead: Use the clarification process to challenge disproportionate bundling early. Remind buyers of their obligations under the Procurement Act 2023 to consider SME participation and request justifications for their procurement design.
Frequently asked questions
Can a buyer limit the number of lots I can win?
Yes. Under the Procurement Act 2023, contracting authorities can explicitly limit the number of lots awarded to a single supplier. This is often done to prevent market dominance, ensure supply chain resilience, and guarantee that multiple suppliers are available for call-off contracts. This limitation must be stated clearly in the tender notice.
If I win multiple lots, can the buyer combine them into one contract?
Yes, if the buyer has stated this intention in the tender documents. This is often done to streamline contract management and reduce administrative overhead for both the buyer and the supplier. However, the evaluation of the lots remains separate during the tender process.
Should we form a consortium to bid for a bundled contract?
Consortia are a powerful way for SMEs to compete against large prime contractors on bundled tenders that they cannot deliver alone. However, you must establish clear governance, liability, profit-sharing, and lead contractor roles long before bidding. Buyers will scrutinise the consortium's legal and operational structure heavily to ensure delivery risk is mitigated.
Does the Procurement Act 2023 force buyers to use lots?
No. Section 18 of the Act creates a duty to consider lots, not an absolute mandate to use them. If a buyer decides a single, bundled contract is more appropriate (e.g., due to severe integration risks or disproportionate management overhead), they can proceed, provided they publish their rationale and demonstrate they have considered the impact on SMEs.
What happens if a buyer receives no bids for one lot?
Under the Procurement Act 2023, if a contracting authority receives no suitable tenders for a specific lot, it may switch to a direct award for that lot alone. Other lots in the same tender can still be awarded competitively as planned. This is a useful safety net for buyers but has no direct impact on your bidding strategy.
