Issue Date: 
Tuesday, September 11, 2018

Advantages and disadvantages of Joint Ventures

Joint Ventures are one of the most popular entities used to respond to tenders in South Africa. The question that arises is whether to use a Joint Venture or a Consortium in responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Joint ventures as well as Consortiums. In this article we list the advantages and disadvantages of Joint Ventures. Look out for the same article on Consortiums.

Joint venture Advantages:

  • Provides companies with the opportunity to gain new capacity and expertise.
  • Enables companies to enter related businesses or new geographic markets or gain access to new technology.
  • Provides access to greater resources - including specialised staff and technology.
  • Shares risks with a venture partner.
  • Enables flexibility: a joint venture can have a limited life span and only cover part of what you do, thus limiting both your commitment and the business exposure.
  • Offers a creative way for companies to exit from non-core business.
  • Companies can gradually separate business from the rest of the organisation and eventually, sell it to another parent company. Roughly, 80% of all joint ventures end in a sale by one partner to another.

Joint Venture Disadvantages:

  • It takes time and effort to build the right relationships and partnering with another business can be challenging. Problems are likely to arise if:
    • The objectives of the business are not 100% clear and communicated to everyone involved.
    • There is an imbalance in the level of expertise, investment or assets brought into the venture by the different parties.
    • Different culture and management styles result in poor integration and co-operation.
    • The partners do not provide enough leadership and support in the early stages.
  • Creating a joint venture may result in more complex tax arrangements.
  • Success in a joint venture depends on thorough research and analysis of the objectives.
  • Creating a joint venture can be more costly than a consortium.

To learn more about this and many other bid conditions please attend one of our HowtoTender workshops. For more information on the tender courses please email Estelle at estelle@how2tender.com.

Title Closing Date Tender No.
Betterment and Re-gravelling of Local L1428 in the Amajuba District 2019-06-12 11:00 C253/ 1920/ BR/ 800
Betterment and Re-gravelling of P43 in the Amajuba District. 2019-06-11 11:00 C253/ 1920/ BR/ 815
ZNTD 03846W: WIMS 063754: Kwazulu-Natal: Department of Education: Kranskop: Sibanisethu Primary School: Water and Sanitation: Phase 3 2019-06-20 11:00 ZNTD 03846W
Betterment and Re-gravelling of District Road D89 Ext. in the Amajuba District 2019-06-12 11:00 C253/ 1920/ BR/ 809
Provisioning of Satellite Airtime in support of systems in service in the S.A. Navy. (Bgan, Fleet Broadband & Iridium). 2019-06-19 11:00 SPSC- B- 003- 2019
Re-gravelling of Local Road L3353 in the Amajuba District 2019-06-11 11:00 C253/ 1920/ BR/ 801
RFI - Request for information from industry on the upgrading, repair and commissioning of automotive fuel storage and dispensing facilities for the South African Navy as per Specification: RFI/NES/FUEL/001 dated April 19. 2019-07-17 11:00 RFI- SPSC- 1- 19
Request for acquisition of Online Information Resource Services for a period of two (02) years 2019-06-10 11:00 RFB 1940- 2019
Appointment of a service provider to supply, deliver and assemble office furniture to the Department of Agriculture, Forestry and Fisheries for a period of three (3) years 2019-06-06 11:00 4.4.12.4/ 2/ 19
Appointment of a Suitable Service Provider to Provide Office Accomodation to the MICT Seta Midrand Head Offices for a period of sixty months (5 years), subject to Mict Seta Licence Renewal on 31 March 2020 2019-06-07 11:00 MICT- SETA/ GAU/ 2019
Request for Proposals for appointment of an service provider for security services for a period of five (5) years 2019-06-10 11:00 CMS/ 012019/ 2020
Re- Advertisement: Appointment of a Building Contractor for Refurbushment and Alterations Project of Old Ehc Offices to Retail Space at Pharoe Park Block H 2019-06-18 11:00 EHCCRP/05/19
Request for Proposals for the Construction of Civil and Electrical Infrastructure to Service Agrizone 2 Located at Dube Tradeport DTPC was created as a provincial public entity to develop Dube TradePort 2019-06-17 11:00 DTP/ RFP/ 36/ IFR/ 01/ 2019
The South African Social Security Agency hereby invites of suppliers to bid for the supply and delivery of stationery for SASSA - Limpopo Region for a period of 36 months 2019-06-07 11:00 SASSA: 06/ 1/ CS/ LP
Supply and delivery of sterilisation related items 2019-06-18 11:00 RT28- 2019
Appointment of a Registered Professional Architect to Provide Professional Services at Faith Mlaba Primary School 2019-06-14 11:00 WIMS 064213
Replacement of Radioimmunoassay (RIA) system) for Challotte Maxeke for a period of five (5) years. 2019-06-07 11:00 RFB002/ 19/ 20
Appointment of a Registered Professional Quantity Surveyor to Provide Professional Services at Faith Mlaba Primary School 2019-06-14 11:00 WIMS 064213
Placement of Automated Real time PCR system for Charlotte Maxeke for a period of five years with service and maintenance. 2019-06-07 11:00 RFB207/ 18/ 19
Placement of MagnaPure 24 automated DNA extraction system for NICD for a period of three years. 2019-06-07 11:00 RFB206/ 18/ 19

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Extension of validity period

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Those of you who are familiar with responding to tenders will know that it is common practice for procuring entities to extend the bid price validity period. We received the undermentioned queries regarding the extension of the validity period of the bid price.

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