5 rules to remember when bidding through a Joint Venture
By Werner van Rooyen
5 October 2015
If you want to bid for a specific tender and do not have all the necessary skills, recourses, infrastructure or capital you can always look for partners with whom you can join forces through Joint Ventures. A JV can bring you the success you want without being trapped in a never ending partnership or shareholding scenario.
In South Africa the Amended B-BBEE Codes of Good Practice have come into effect on 1 May 2015. These new codes place a lot of emphasis on Ownership. Ownership accounts for 25 points on the B-BBEE Scorecard and it is also a Priority Element. If your company is not going to score any points on Ownership you are also going to struggle to achieve a good B-BBEE Level. This will impact negatively on your tender responses. Through Joint Ventures you can overcome this obstacle by joining forces with Black Owned companies thus increasing your Ownership score with a Consolidated B-BBEE certificate.
We foresee that Joint Ventures will become an integral part of South Africa’s business sphere. For this reason there are five things that you must remember when you respond to a tender through a Joint Venture:
- Always draw-up an official Joint Venture Agreement;
- The Joint Venture Agreement must be tender specific - this means the name of the tender as well as the tender number must be recorded in the Joint Venture Agreement;
- Establish a Lead Partner in the Joint Venture and use the Lead Partner’s information when completing the Standard Bidding Documents and any other forms or documents;
- Joint Ventures must submit a Consolidated B-BBEE certificate if it is not an incorporated entity when responding to tenders. You apply for a Consolidated B-BBEE certificate at your B-BBEE Verification Agency who will issue the Consolidated B-BBEE certificate after combining the Joint Venture partners’ B-BBEE Certificates - this should not be a tedious task and it should not take long at all ;
- The Consolidated B-BBEE certificate must be tender specific - in other words it must contain the name and number of the tender that you are responding to;
If you follow these five easy rules when responding to a tender through a Joint Venture, your response will not be disqualified.
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