Perspective

Procurement

The small lots rule in construction projects - advice on applying it in practice

Written by

Marianne Bjørnkjær Villefrance

Attorney-at-law / Head of Legal Team

Published

9 September 2026

As a public client, have you ever needed to enter into a contract directly without first going through a time-consuming procurement process?

The small lots rule in section 8(2) of the Danish Public Procurement Act makes this possible, provided the other conditions are met.

It can be useful to remember the small lots rule when, as a public client, you plan your procurement, or when an unforeseen situation arises during construction that requires a contract to be awarded quickly to a new or existing party.

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What is the small lots rule?

Under section 8(2) of the Danish Public Procurement Act, a contracting authority may award a partial contract (lot) without following the rules in Parts II or III of the Act, provided the conditions for doing so are otherwise met. This provision is also known as the small lots rule.

If the small lots rule is used to enter into building and construction contracts, these lots are also expressly exempt from the tendering obligation under the Danish Tender Act, cf. section 1(3) of the Tender Act. This means that if the small lots rule is used to award a contract, the contract is, as a starting point, completely exempt from all procurement rules.

However, the individual public client may have internal rules which mean that the task must nevertheless be exposed to some form of competition. In any case, the public client should make sure that the work is carried out at market prices.

Conditions for applying the small lots rule

The small lots rule means that a contracting authority (a public client) may award individual separate contracts without a tender when two conditions are met:

The total value of the contracts awarded without a tender must not exceed 20% of the value of the total construction costs (i.e. of the total works if they were not divided into lots).
The estimated value of each contract awarded without a tender must not exceed DKK 7,460,000 for building and construction contracts and DKK 596,800 for supply and service contracts (the thresholds for 2026 and 2027).

Must the contracts be of the same type?

The small lots rule can probably only be used for contracts of the same type (e.g. several trade contracts).

Agreements for services (e.g. technical consultancy) or supplies (e.g. client-supplied materials) in connection with a construction project can therefore probably not be entered into under the small lots rule calculated on the basis of 20% of the value of the total construction works and the maximum amount of DKK 7,460,000.

However, if a separate EU tender has been carried out for, say, a lead consultancy agreement, the small lots rule can be used to purchase supplementary technical consultancy of up to 20% of the value of the tendered lead consultancy agreement, subject to a maximum of DKK 596,800 per agreement.

Is advance planning required?

There used to be uncertainty about when the small lots rule could lawfully be used during the life of a project. Following the 2022 amendment to the Public Procurement Act, it is now clear that, under section 8(2) of the Act, the small lots rule can be used to the extent planned from the start of the project and to the extent that unforeseen needs arise during the life of the project.

This is an important clarification of the scope of the provision, which previously caused uncertainty – and probably also reluctance to use the option.

The scope of the provision used to be interpreted narrowly, as requiring advance planning from the start of the project. This narrow interpretation was, however, set aside by the Danish Complaints Board for Public Procurement in its decision of 19 June 2017 (LH-Gulve A/S v Region Midtjylland), which held that there is no basis for such a narrow interpretation.

Following the amendment, it is now very clear that advance planning is not a requirement for using the small lots rule.

It can nevertheless be a very good idea for a client – when planning its construction project – to consider where and when it wants to use the rule; see the explanation immediately below.

Applying the small lots rule in practice

When planning a tender

The small lots rule can usefully be applied to save time on construction projects with a tight schedule, where tendering all tasks/contracts could delay the construction process. In such cases, the small lots rule can be used to procure “preparatory” contracts such as demolition, environmental remediation or similar, which can be carried out while the other contracts are being tendered.

The small lots rule can also be used where, for particular reasons, the contracting authority wants a specific contractor or supplier for a specific service. In that case, however, the contracting authority should check whether there are internal rules in its organization that require a justification for awarding a contract to a particular party.

During the construction project

The small lots rule can also be useful if unforeseen tasks arise during the construction project. This may be the case, among others, in the following situations:

when new work needs to be purchased from a contractor that is already a contracting party, but where, under the procurement rules, the work cannot be purchased under the existing contract, or
when a contract needs to be entered into quickly with a new contractor without a tender delaying the construction project.

In these cases, it is a precondition that so many other services have not already been purchased under the small lots rule that their total value exceeds the 20% limit.