Lots

A lot (delkontrakt) is one part of a procurement that the contracting authority has divided up, where each part is awarded as a separate contract. The division can for example be geographical, by quantity, by trade or in phases, such as development in one contract and operation in another (DFØ). The Public Procurement Regulations (anskaffelsesforskriften) do not define the word, but use it in the rules on calculating value, on requirements for economic and financial standing and on division into lots. The rules on this page are those of the Public Procurement Regulations, and the § references are to them; the Utilities Regulations (forsyningsforskriften) have their own rules.

The rules on value are in Part I, which applies to all procurements. If the contracting authority plans to buy services, works or similar supplies in separate lots, the total value of all the lots must be used. If the total value is at or above a threshold, that threshold decides which part of the Regulations applies to each individual lot (§ 5-4 (8)). As a main rule, then, a small lot follows the rules for the whole procurement. If the total value is above the EEA threshold, there is an exception for small lots; see the questions below.

The contracting authority must not divide up a contract in order to exempt it from the Regulations (§ 5-4 (4)). That prohibition is also in Part I and applies to all procurements.

In competitions under Part III, which applies at or above the EEA thresholds for supply, service and works contracts, the contracting authority may choose to divide the procurement into lots, and decides the size and subject-matter of the lots itself. If it does not divide the procurement, it must give a short reason in the procurement documents or in the procurement record (anskaffelsesprotokollen) (§ 19-4). If the procurement is divided, the contract notice, or the invitation to confirm interest, must say whether you may submit tenders for one, several or all of the lots. The contracting authority may set a maximum number of lots that one supplier can be awarded. Where it has allowed tenders for several lots, it may still reserve the right to award one combined contract to one supplier, even when that supplier does not have the best tender for each lot, if the combined tender as a whole meets the award criteria better. The reservation, and which lots may be combined, must be stated in the contract notice or the invitation. The maximum number of lots must be stated there too.

Part II, which applies from NOK 1.3 million up to the EEA thresholds (except health and social services) and to special services (særlige tjenester) from NOK 1.3 million with no upper limit, and Part IV, which applies to health and social services at or above NOK 8.7 million, have no rules of their own on division into lots, and Part I has only the rules on value. The duty to give reasons therefore does not apply below the EEA thresholds, nor to special services, which follow Part II even above NOK 8.7 million, nor to health and social services.

Division into lots makes it possible to compete for part of a contract you could not deliver in full. That is the purpose of the rules in Part III: to make it easier for small and medium-sized enterprises to take part (DFØ).

In competitions under Part III, the rules on requirements for economic and financial standing (økonomisk og finansiell kapasitet) apply to each lot separately. A requirement for a minimum yearly turnover must not exceed two times the estimated contract value, unless the contracting authority has objective grounds and states them in the procurement documents. Where the procurement is divided into lots, the limit is calculated per lot. You can therefore qualify for a small lot even if you would not meet the requirement for the whole procurement. If you can be awarded several lots to be performed at the same time, the contracting authority may still set a turnover requirement for that group of lots as a whole (§ 16-3).

Advice: read the contract notice and the tender documents for four points before you decide: which lots you can bid for, whether there is a maximum number of lots one supplier can be awarded, whether the contracting authority may combine lots into one contract, and which qualification requirements apply to each lot. Below the EEA thresholds, the Regulations have no rules on lots beyond the calculation of value, so there the answers are only in the documents. Advice: if you bid for several lots, set each price so that it can stand alone, because you may win one lot and lose another. If the contracting authority has reserved the right to a combined award, a combined tender may pay off.

The Regulations prohibit dividing up a contract with the aim of exempting it from the Regulations (§ 5-4 (4)). If that has been done to avoid advertising or competition, the purchase may be an illegal direct award (ulovlig direkte anskaffelse). For services, works and similar supplies, all the lots also count together whatever the purpose. The time limits and the complaint fee are on the pages on direct award and KOFA.

A municipality advertises a competition for snow clearing for four years, divided into three lots by zone. The estimated value is NOK 1.6 million for zone 1, NOK 1.2 million for zone 2 and NOK 1 million for zone 3, NOK 3.8 million in total excluding VAT. That is above NOK 2.5 million, which is the EEA threshold for municipalities, so Part III applies to all three lots. The exception for small lots does not apply, because none of the zones is below NOK 932,000, and none is at or below 20% of the total.

The contract notice says that you may bid for all the zones, but be awarded at most two. The municipality requires a yearly turnover at least equal to the value of the lot, and has set no requirement for a group of lots. With a yearly turnover of NOK 1.5 million, you meet the requirement for zone 2 and zone 3, but not for zone 1. Advice: if you bid for zone 2 and zone 3, set each price so that it can stand alone, because you may win one without the other.