Issue Date: 
Monday, March 16, 2015

Consortiums Versus Joint Ventures

It is common business practice to form a Joint Venture when one respond to a tender, especially if you do not have all the expertise required by the specific tender. But Joint Ventures can be complicated to form and to find the correct partner for the Joint Venture can be challenging. There is an alternative option. You could go into a consortium when responding to a tender.

A consortium is an association of two or more individuals, companies or organisations with the objective of participating in a common activity, such as responding to a tender, or pooling their resources to achieve a common goal. Within the consortium, each participant retains their separate legal status and the consortium's control over each participant is generally limited to activities involving the joint endeavour, particularly the division of profits. A consortium is formed by contract.

A Joint Venture can be described as a business enterprise where two or more participants come together to share their expertise in order to win a specific contract for a set period of time. A Joint Venture is a separate entity and is not part of the individual participant's own enterprise. Therefor a Joint Venture must have its own set of rules by which it is managed and this is called a Joint Venture Agreement.

The key reasons to form a joint venture or consortium may be that it will provide your company with new opportunities to respond to a tender or request for proposal and secure tenders which would not otherwise be available to you due to your company's size and scale.

Before entering into either a joint venture or consortium agreement, all parties need to understand what they want from the relationship. Both joint ventures and consortiums have risks and benefits: the most important thing is to take account of what your objective is in entering into the relationship and then to weigh up which one is more appropriate to help you win a tender.

To learn more about this and many other tender conditions please attend one of our How-to-Tender workshops. For more information on the tender courses please email Werner at werner@how2tender.com

This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd. which specializes in tender consulting and tender training.

Title Closing Date Tender No.
Sound and Lighting: Live Gospel Show 24 November 2018 2018-11-21 12:00 B346/2018/19
Backfill and reinstatements of trenches & other excavations in existing roads and other paved surfaces in ward 2 2018-11-27 12:00 213/2018/19
Backfill and reinstatements of trenches & other excavations in existing roads and other paved surfaces in ward 6 2018-11-27 11:00 RFQ214/2018/19
Supply and Install Air Conditioners at Tshepong Laboratory 2018-12-12 10:30 RFQ NO: 1464133
Backfill and reinstatements of trenches & other excavations in existing roads and other paved surfaces in ward 9 2018-11-27 12:00 215/2018/19
Renovations to Wf Knobel NHLS Laboratory in Limpopo 2018-12-13 11:00 RFQ NO: 1339393
Backfill and reinstatements of trenches & other excavations in existing roads and other paved surfaces in ward 10 2018-11-27 12:00 216/2018/19
Call for Auctioneers to submit quotations for providing service to auction redundant and obsolete inventory and movable assets on behalf of Knysna Municipality 2018-11-27 12:00 190/2018/19
Render a Cleaning Service at the Premises of the Metro North Education District (Mned) Office, Situated at 9 Timmerman Street, Parow for a period of two (2) years, starting from 1 April 2019 to 31 March 2021. 2018-12-14 11:00 B/WCED 2473/18
On-site Auditing, application of Grading System to and Training of 349 Clubs through Club Development Toolkit 2018-12-18 11:00 ZNB: DSR43/ 1819
Provision of Short Term Insurance Services in SIU for a period of 60 months. 2018-12-14 11:00 RFP: 005/ 11/ 2018
Appointment of a Service Provider to provide an Internal Audit Services on a co-sourced basis for a period of Three (3) years 2018-12-07 12:00 RFP/ T 08- 2018/ 19
Appointment of a maximum of four (4) Media Agents to provide media buying (including print, radio, television and online media) and related services to the NRF SAASTA for a period of thirty six (36) months 2018-12-14 11:00 NRF/ SAASTA/ 02/ 2018- 2019
Supply of Integrated Competency Assessment services to SITA for a period of 36 months 2018-12-07 11:00 RFB 1841/ 2018
Provision and Implementation of Integrated Management Information System to Support SASSETA Core Business 2018-11-30 11:00 RFP/ SASSETA/ 201819128
Installation, Configuration maintenance of PABX and Call Centre Management Solution for a period of 12 months with the option to renew 2018-12-10 11:00 RFP/ SASSETA/ 201819129
Supply, Delivery, Installation and Configuration of Firewall and Switches on an outright purchase or rental basis (Managed) and maintenance thereof for a period of 12 months with the option to renew 2018-12-10 11:00 RFP/ SASSETA/ 201819130
Provision of Telecommunication and Internet Services for a period of 12 Months with the option to renew 2018-12-10 11:00 RFP/ SASSETA/ 201819125
Appointment of a service provider for the evaluation, due diligence and monitoring of Discretionary Grants until 31st March 2019 2018-12-10 10:00 RFP/ SASSETA/ 201819127/ 1
The rendering, manufacturing, repairing, fitting and supplying of aids for orthotic and prosthetic services to institutions in the Eden and Central Karoo District under Western Cape Government the Department of Health for a three year period 2018-12-07 11:00 WCGHCC031/ 1/ 2018

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Advantages and disadvantages of Consortiums

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

Consortiums Advantages:

  • Easy to establish as there are no formal procedures... Read More
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