This note looks at three issues to consider before the formal procurement process starts. These are:

  • Preliminary market consultations (Article 40/Regulation 40)
  • Prior involvement of candidates and tenderers (Article 41/Regulation 41)
  • Division of contracts in to lots (Article 46/Regulation 46)

Preliminary market consultations (Article 40/Regulation 40)

Article 40/Regulation 40 permits contracting authorities to conduct pre-procurement market consultation with a view to:

  • preparing the procurement; and
  • informing economic operators of their procurement plans and requirements.

Article 40/Regulation 40 provides an example of the sort of consultation which is permitted. It refers to “seeking or accepting advice from independent experts, authorities or from market participants”. It goes on to confirm that advice obtained in a preliminary market consultation process can be used in the subsequent planning and conduct of the procurement procedure. This is provided that the advice does not have the effect of distorting competition and does not breach requirements for non-discrimination and transparency.

Is this anything new? The old public sector Directive referred to the possibility of pre-procurement technical dialogue used to assist in the preparation of specifications. This reference was only included in the introductory section to the old Directive. There were no Articles in the old Directive or in the UK implementing Regulations covering this process. In practice in the UK many authorities already use pre-procurement discussions and the OGC issued guidance on how best to do so.

Article 40/Regulation 40 widens the concept considerably to cover much more than technical dialogue on the preparation of specifications. However, the key question remains as before: how do you conduct preliminary market consultations in a non-discriminatory and transparent manner and without distorting competition?

This requires careful consideration of how best to inform interested parties of proposals for consultation and how to conduct the process.  Options to consider include use of prior information notices, bidder days and webinars. A good audit trail of the discussions is essential. The fact that there are now specific provisions requiring that the process does not distort competition and does not breach other basic principles may make a legal challenge more likely.

Prior involvement of candidates or tenderers (Article 41/Regulation 41)

Article 41/Regulation 41 covers the situation where an economic operator has advised a contracting authority, or has been otherwise involved, in preparation for a specific procurement and then wishes to participate as a tenderer in that procurement process. In this case the contracting authority cannot automatically ban that economic operator from participating in the procurement process. The contracting authority must, however, take “appropriate measures” to ensure that competition is not distorted by the participation of that economic operator.

What are appropriate measures? Article 41 sets out two requirements. The contracting authority must: 1) provide all candidates/tenderers with relevant information exchanged or arising out of the economic operator’s prior involvement; and 2) fix adequate time limits for receipt of tenders. This is not an exhaustive list and so contracting authorities should consider other appropriate measures.

When can the economic operator be excluded? The economic operator concerned may only be excluded where there are no other means to ensure compliance with the duty to ensure equal treatment. This is in line with the general principle of proportionality which is one of the well established principles underlying public procurement law.

Division of contracts into lots (Article 46/Regulation 46)

One of the drivers behind the new Directive is the desire for greater SME participation in the delivery of public contracts. Contracting authorities are free to decide whether or not to divide contracts into lots. Where they choose not to do so they must explain their reasons. The explanation must be set out either in the procurement documents or in an individual report on the contract procedure required under Article 84/Regulation 84.

Management of lots: Where contracting authorities do decide to divide a contract into lots then Article 46/Regulation 46 specifically permits management of those lots. Contracting authorities can specify whether tenders may be submitted for one, several or all lots. Contracting authorities may award contracts combining several lots. They are also permitted to limit the number of lots awarded to a single tenderer. Contracting authorities must inform economic operators of their intention to use these “lot management” approaches by specific references in the call for competition.

Criteria to be applied where a tenderer wins more than the maximum permitted number of lots: Contracting authorities are also required to set out in the procurement documents the “objective and non-discriminatory criteria or rules” which they will apply to decide which lots to award to a tenderer who wins more than the maximum number of permitted lots.


These provisions answer questions frequently raised by contracting authorities about the extent to which they are permitted to manage the award of lots. Specific permission is now given to undertake a range of lot management approaches. The ability to manage lots is balanced by requirements for transparency. This is to ensure that economic operators are fully aware of when and how lot management will occur. Contracting authorities will have to think very carefully before they start the procurement process about the options which they wish to use, criteria to be applied and their decision making processes.

This is not intended to be an exhaustive analysis. If you need to look at the detailed wording of the new Directive then follow this link.

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