Bundled contracts can be a quiet deal-breaker for SMEs. On the surface, a single, larger contract that “keeps things simple” for a buyer may look attractive. In practice, contract bundling often scales up scope, geography and duration in ways that make the opportunity inaccessible to smaller firms. While bundled contracts are often justified on the grounds of efficiency and potential savings, they can specifically create legal and practical barriers for SMEs. Framework agreements help public and third sector buyers procure goods and services from a list of pre-approved suppliers, and using a framework agreement can save time and money by removing the need for lengthy and expensive tender processes. The Procurement Act 2023 puts transparency, fairness and proportionality front and centre, and authorities are expected to consider SME participation when they design a route to market. That means you can and should challenge bundled contracts early—ideally before they’re published, and certainly before you invest bid time—when requirements look disproportionate. Here’s how to spot bundling quickly, what to ask, and how to use Supply2Gov to surface red flags and act at pace.
What are bundled contracts in public procurement?
Bundled contracts combine several requirements—services, locations, phases, or specialist elements—into one all-encompassing contract or lot. Bundled service agreements combine multiple services or products into one contract, offering efficiency and potentially better pricing due to increased volume and scope. By consolidating services into one contract, organizations achieve better pricing, streamlined administration, and improved service integration. Managing bundled contracts simplifies administration by reducing the number of invoices and contracts to manage. For example, government procurement often incorporates bundled IT services and maintenance to minimize administrative overhead. Bundled contracts often result in lower total costs due to economies of scale and negotiated volume discounts.
Buyers bundle for many reasons: perceived efficiencies, a desire for a single point of accountability, to streamline management overhead, to simplify administration, to reduce costs, and to include related services such as maintenance within one contract. There’s nothing inherently unlawful about bundling. The question is whether the design is proportionate and transparent—and whether the same outcomes could be delivered through lots, phased mobilisation, or a regionally segmented approach that opens the door to SMEs.
Typical SME impacts you’ll see when bundling goes too far:
- Scale: A single contract value that balloons beyond what most SMEs can carry, often paired with high minimum volumes.
- Scope: Multi-disciplinary requirements (for example, hard FM + soft FM + energy optimisation) packaged together without a rationale to keep them inseparable.
- Geography: UK‑wide or multi-region delivery from day one, regardless of the realistic supplier base in each area.
- Duration: Long terms with heavy extension options that effectively “lock out” the market.
Under the Procurement Act 2023, buyers must act transparently and proportionately, and should consider and mitigate barriers that prevent SMEs from participating. If the same outcome could be achieved by splitting into lots or phasing the mobilisation, over-broad packaging is open to challenge in clarifications and pre-market engagement.
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How to spot All-or-Nothing clauses that restrict SME access
All‑or‑Nothing clauses are the classic signature of bundled contracts. Look for wording that forces a single supplier to deliver the full scope with no partial bids, no regional split, and no opportunity to propose a consortium or subcontracting model.
Where they appear:
- Selection/ITT instructions: “Only bids covering 100% of the scope/locations will be considered.”
- Award model: “Single supplier framework/contract; no partial or alternative solutions permitted.”
- Exclusivity: “The authority will not consider subcontracting or consortia responses.”
Red‑flag phrases to watch for in ITTs and PQQs:
- “No partial bids.” “No variants.” “Must deliver the full scope.”
- “UK‑wide day-one coverage required.” “All sites must be covered continuously.”
- “Single supplier award.” “Exclusivity applies to the Supplier.”
- “No subcontracting/consortia permitted” or “Prime contractor must self-perform X%” without justification.
What to do next:
- Ask in clarifications: “Please confirm whether partial bids, consortia or subcontracting are permitted to broaden market access and ensure proportionality in line with the Procurement Act 2023.”
- Propose alternatives: a regional split, service sub-lots, or a phased mobilisation that allows scalable capacity.
Use Supply2Gov saved searches to surface tenders with All‑or‑Nothing phrasing and assess early
Assessing disproportionate financial requirements that exclude SMEs
Financial thresholds are a common, fixable barrier. The principle is simple: requirements should be proportionate to the risk and size of the contract. A practical benchmark often used by buyers is to cap required turnover at no more than around two times the annual contract value (unless a clear, risk‑based justification is given). Similarly, insurance and bonding should reflect actual risk, not preference. It is important to evaluate the financial requirements to ensure they are relevant to the contract and proportionate to the resources required for delivery.
Quick proportionality checks you can run:
- Annual turnover: Is the stated minimum more than around 2× the annual value? If yes, ask for the risk rationale.
- Insurance: Are public/products liability and professional indemnity levels aligned to plausible claims exposure? Could the authority accept a commitment to uplift on award?
- Parent company guarantees/performance bonds: Are these blanket requirements or targeted to specific risk (for example, mobilisation, TUPE, or critical infrastructure)?
- Case studies: Are they asking for more examples than are reasonably needed to assess capability, or demanding public‑sector‑only experience where equivalent private work proves the same capability?
- Have you considered the resources available in the market and whether the requirements are relevant to the actual job being procured?
Evidence SMEs can cite in clarifications:
- Industry norms and market capacity data (for example, typical regional volumes and supply base size).
- Comparable contract examples with lower thresholds that were successfully delivered.
- Risk‑based alternatives: escrow, step‑in rights, staged insurance uplifts, or performance management KPIs.
- The importance of providing relevant evidence and consideration of market resources when responding to requirements.
Get notified when financial thresholds fit your profile with Supply2Gov filters: https://www.supply2govtenders.co.uk/how-s2g-works/contracts-finder/
Preliminary market engagement helps contracting authorities and the market prepare for the procurement, and can be used to evaluate and adjust financial requirements to ensure they are relevant and proportionate.
Framework agreements and mini‑competitions: where bundling hides
A framework agreement is a list of suppliers or companies who have demonstrated an acceptable level of capability, experience, competence, and value, and are awarded a place on the framework after a competitive bidding process. Framework agreements often allow for either running a further competition (mini-competition) or making a direct award to a supplier, depending on the process and circumstances. These frameworks can include a wide range of goods and services, from construction to IT and legal advice, and organisations such as public authorities and third sector entities can participate to access goods and services more efficiently. Frameworks are typically awarded for a fixed timeframe, usually between 1 to 4 years, after which they are re-tendered, and new suppliers may be able to join during the re-tendering process to increase competition. It is important to follow the correct process and comply with public contracts regulations, such as the Public Contracts Regulations 2015 and the Procurement Act 2023, which set limits on expenditure and ensure transparency, competition, and fairness. Framework agreements can provide legal protections for contracts and ensure suppliers meet agreed standards.
Even when a framework is split into lots, bundling can reappear in the detail. Watch for lots that look SME‑friendly on paper but operate as single‑supplier environments in practice due to:
- Minimum volume commitments across multiple service lines.
- Call‑off terms that aggregate several regions or sub-services into one mini‑competition.
- Call‑off scope creep that goes beyond the original lot description.
How to read frameworks effectively:
- Check lot descriptions against call‑off rules: can buyers legally bundle multiple lot elements in a mini‑comp?
- Look for minimum volume/coverage commitments that would require national capacity.
- Examine any “no subcontracting” or “prime must self-perform X%” conditions at call‑off.
If you spot issues, raise them early with the framework owner. Suggest sub‑lots, defined regional splits, or mini‑competition rules that prevent uncontrolled scope aggregation.
Track new frameworks and lot updates automatically via Supply2Gov alerts.
Use pre‑market engagement to challenge bundling before it’s published
The best time to influence lotting, coverage, and proportionality is before the specification is locked. Under the Procurement Act 2023, pre‑market engagement, Prior Information Notices (PINs), soft market testing and open Q&A are normal and encouraged to achieve better outcomes and wider participation. Pre-market engagement allows contracting authorities to develop and refine requirements based on market feedback and specific circumstances. Authorities can engage with everyone who expresses an interest in preliminary market engagement to evaluate the best approach.
What to do:
- Respond to PINs and market surveys with concrete data on your capacity, regional coverage and realistic mobilisation timelines.
- Share evidence on how splitting by region or service improves competition and resilience.
- Offer a phased approach: for example, start with priority locations and scale to full coverage in months 3–6.
How to frame evidence‑based feedback during soft market testing
Use constructive, data‑driven language:
- Capacity: “We operate depots in X, Y and Z with A FTEs, enabling immediate coverage for Regions 1–2 and, specifically, phased coverage for Region 3 within 90 days.”
- Risk: “Requiring 100% UK coverage at day one increases mobilisation risk. A two‑phase start reduces risk while maintaining service continuity.”
- Lotting alternative: “We propose three regional lots (North, Midlands, South) with an option for sub‑lots by service line. This aligns with supplier capacity and supports SME participation without compromising KPIs.”
Suggested clarification wording: “Please confirm whether the authority will consider regional or service‑line lots, or a phased mobilisation, to reflect proportionality and widen SME access in line with the Procurement Act 2023 covered procurement objectives.”
Set alerts for PINs and soft market tests in your sector with Supply2Gov Tenders.
Contract lots: spotting lotting opportunities and pushing for better design
Lotting means dividing a procurement into smaller components—by geography, service, or phase—so more suppliers can compete. Managing multiple contracts for specialized services may lead to significant administrative burdens, especially for medium sized enterprises, making thoughtful lot design crucial to support both SMEs and MSEs. Signs that lots are too broad:
- A single lot covers diverse specialties that are rarely delivered by the same supplier.
- Geographic coverage spans multiple regions with no option for partial participation.
- Mobilisation demands full coverage from day one without a phasing model.
How to request better lot design in clarifications:
- Sub‑lots by service: “Could Lot 1 (FM) be divided into Hard FM and Soft FM to reflect market specialisms and promote SME participation?”
- Regional splits: “Could the authority consider three regional lots aligned to local supply chains?”
- Phased delivery: “Would you consider a 60/40 mobilisation split with a firm timetable to full coverage, to reduce risk and widen competition?”
- Quality and job requirements: “Can the authority clarify how quality and the specific job requirements will be considered when designing lots to ensure suppliers can deliver to the required standard?”
Simple template you can adapt: “We support the authority’s objectives and believe outcomes could be strengthened by splitting [lot/scope] into [regional/service/phase] components. This would increase competition, resilience and SME inclusion while maintaining delivery KPIs and ensuring quality for each job. Please advise whether this will be considered.”
Monitor authorities that use lotting well and get alerted to new lots with Supply2Gov Tenders.
Consortia and subcontracting strategies to overcome bundling
Sometimes, the fastest route around bundling is to collaborate. Consortia and subcontracting strategies can help providers and systems manage complex bundled contracts more effectively. If the contract won’t be unbundled, consider:
- A consortium/joint bid when multiple SMEs can present a unified delivery model with shared governance.
- A lead‑and‑subcontract approach, where one supplier holds the contract and specialist partners cover defined elements or regions.
Selecting the right route depends on selection criteria, liability, and coordination effort. In both cases, present combined capacity clearly and explain how the team will offer single‑point accountability to match the buyer’s objectives without excluding SMEs.
Building a compliant consortium response
- Roles and governance: Define a lead, delivery leads by workstream/region, and decision‑making forums. Provide an escalation pathway.
- Capacity mapping: Present an integrated resource plan showing coverage by region/service and surge capacity for peaks. Evaluate and allocate resources across the consortium to ensure effective delivery and compliance with contractual obligations.
- Shared methodologies: Align on one set of SOPs, KPIs and reporting templates. Show how you’ll ensure consistency across partners.
- Conflict‑of‑interest checks: Confirm there are no conflicts among consortium members and disclose any existing relationships with the authority.
- Contracting approach: Clarify whether you propose a consortium agreement, special purpose vehicle or prime‑sub agreements, and how liabilities are allocated.
Use Supply2Gov Tenders to identify complementary partners across upcoming tenders.
Checklist: bundled contracts red flags
Use this quick triage when a notice lands:
- Scope: Are multiple specialist services bundled with no option to bid for discrete elements?
- Partial bids: Is there wording that rules out partial bids, variants, consortia or subcontracting?
- Geography: Is day‑one national coverage required without phasing?
- Finance: Are turnover thresholds significantly higher than around two times annual value? Are insurance/bonding demands risk‑based?
- Limit: Is there a cap or limit on contract value or expenditure, and does exceeding this limit trigger a requirement for a new tender process?
- Framework rules: Do mini‑competition rules allow aggregation that defeats lotting?
Score 0 (green) to 2 (red) on each. A score of 5 or more? Engage via Q&A to request lots/phasing and justification. If the buyer won’t adjust and the risks remain disproportionate, consider walking early.
The Procurement Act 2023: legal grounds to challenge bundled contracts
The Act’s objectives and principles—transparency, fairness, and proportionality—are your reference points. Authorities should design procurements that are open, competitive and proportionate to the need, in line with the regulations that govern public procurement and bundled contracts. Current government guidance on covered procurement objectives also encourages authorities to consider and remove barriers to SME participation where possible, including by using lots and proportionate selection criteria. Federal agencies, such as the Department of Health and Human Services and the Federal Trade Commission, play a key role in enforcing these regulations and challenging anticompetitive practices in bundled contracts. It is important to note the complexity of antitrust litigation in this area, as legal challenges often involve an extensive scope of discovery, large volumes of documents, and significant technical difficulties.
Map common red flags to the Act’s principles:
- Over‑broad scope with a single‑supplier award: potential proportionality issue—could the same outcomes be achieved via lots?
- No partial bids/consortia permitted without rationale: potential equal treatment and competition concern.
- Financial thresholds set significantly above what risk justifies: potential proportionality issue—request justification linked to real risk.
- Framework mini‑comp scope creep: potential transparency concern if call‑offs expand beyond the advertised lot description.
Useful public guidance to cite in neutral terms:
- GOV.UK guidance on covered procurement objectives under the Procurement Act 2023 (transparency, fairness, value for money).
- Central policy emphasis on SME participation, including published targets for SME and VCSE spend.
Proportionality and transparency tests SMEs can cite
Suggested clarification wording you can adapt:
- “Please explain how requiring delivery of all regions/services by a single supplier from contract start aligns with proportionality, and specify what relevant evidence or requirements will be considered to ensure transparency.”
- “Please confirm whether consortia or subcontracting models are acceptable to widen participation while maintaining a single point of accountability, and clarify any relevant documentation needed.”
- “Please provide the risk assessment underpinning the turnover/insurance thresholds and advise whether proportionate alternatives (for example, staged insurance uplifts on award) supported by relevant evidence will be accepted.”
Remedies and timescales: from clarifications to formal challenge
- Pre‑market: Engage through PINs/soft market testing with evidence‑based proposals for lots and phasing. Be aware of your rights and the available remedies at this stage.
- Live tender clarifications: Raise specific, well‑evidenced questions on proportionality and transparency before the deadline. Remain aware of the procedures and your rights to seek clarification or challenge if necessary.
- Decision stage: Review debrief/feedback. If concerns remain, consider escalation during the standstill window—seek independent advice if you believe there are grounds for challenge. Stay aware of the timescales and remedies available to you.
- Documentation: Keep a complete audit trail—original notice, Q&A, your submissions, and any buyer responses or rationale. Being aware of the documentation required can support any future remedies.
Tip: Escalation doesn’t have to be confrontational. Many bundling issues are resolved when authorities see structured, risk‑based alternatives that maintain outcomes and broaden competition.
How Supply2Gov Tenders helps SMEs spot and act on bundled contracts
Supply2Gov gives SMEs practical tools to detect bundling early and engage constructively:
- Tailored alerts for bundling red flags: Set saved searches with keywords such as “no partial bids,” “single supplier,” “UK‑wide,” “must deliver full scope,” and “exclusivity.” Spot problems in minutes, not days. https://www.supply2govtenders.co.uk/how-s2g-works/your-tender-alerts/
- Filters for proportionality fit: Track opportunities that match your typical turnover and insurance levels so you’re not chasing mis‑sized contracts. https://www.supply2govtenders.co.uk/how-s2g-works/contracts-finder/
- Framework and lot tracking: Monitor new frameworks, lot structures and mini‑comp rules to avoid hidden bundling. For example, office supplies are often available through frameworks, making it easy to order online at a fixed price.
- PINs and soft market testing alerts: Engage before specifications harden to influence lotting and phasing.
- Partner discovery: Identify complementary suppliers regularly appearing in your sector to form consortia or subcontracting teams.
Bundled contracts are commonly used in sectors like telecommunications, SaaS, and facility management. By leveraging frameworks and bundled contracts, SMEs can achieve significant savings—often 10% to 15% compared to open tendering—by securing competitive price agreements and benefiting from economies of scale.
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Closing Thoughts
Bundled contracts aren’t going away—but you don’t have to sit them out. With quick red‑flag checks, constructive clarifications and smart collaboration, SMEs can open up access or choose to walk before sunk time outweighs the odds. The Procurement Act 2023 gives you clear principles to lean on, and buyers are increasingly receptive to evidence‑based proposals that maintain outcomes while widening competition.