Issue Date: 
Thursday, October 31, 2019

The difference between Consortiums and Joint Ventures

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

It is common business practice to form a Joint Venture when one responds 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 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 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 attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth, and Cape Town.  Book and pay online at https://howtotender.co.za/tender-expert-form/

Contact us at wernervr@howtotender.co.za should you require more information.

You can also purchase a Tender Manual (Handbook) on our website https://howtotender.co.za/ which is a step by step guide how to respond to a South African Tender.  It includes examples of completed SBD forms.

Title Closing Date Tender No.
Repairing of potholes in Ward 5 2019-12-19 12:00 138/2019/20
Repairing of potholes in Ward 4 2019-12-19 12:00 139/2019/20
Repairing of potholes in Ward 2 2019-12-19 12:00 140/2019/20
Repairing of potholes in Ward 1 2019-12-19 12:00 141/2019/20
Bidders are invited for Collection, Conveyance and Deposit of Cash for the period of 36 months. 2020-01-17 12:00 LIM473/cashcollection/19/20/26
Expression of Interest for Hotel and Conference Facility Development and Operations in Steve Tshwete Municipality - Middelburg Mpumalanga 2020-01-08 12:00 BS05/11/2019
For the supply and delivery of a new white 26 seater minibus 2019-12-19 16:00 ITB/RSA/SU/12.03/2019
Supply and Delivery of Plumbing Fittings 2019-12-17 11:00 303133
Electrical Maintenance and Fault Findings For Breede Valley Municipality’s wwtw’s and Pumpstations 2019-12-17 11:00 303281
Supply, Delivery and Installation of Air Conditioners at Worcester wwtw 2019-12-17 11:00 301985
Stripping, Repair and Reassemble of 4 Robot Submersible Pumps and 1 X 15 Kw Electrical Motor at Worcester Wastewater Treatment Works. 2019-12-17 11:00 303274
Supply and Delivery Cable 300mm Single Core 2019-12-17 11:00 303241
Supply and Delivery of Electrical Fittings 2019-12-17 11:00 303243
Supply and Delivery of Office Furniture 2019-12-19 11:00 303296
Supply and Installation of Control Equipment and Office Furniture for Oyama and Tshepiso Dreamweaver 2019-12-13 12:00 RFQ/LED/2019-20/249
Service Provider to Supply and Deliver a Fruit Juice Production Equipment 2019-12-13 12:00 RFQ/LED/2019-20/248
First Aid Level 3 Training Programme 2019-12-13 12:00 RFQ/DHR/2019-20/247
Supply and Delivery Of 30 X Size 315/80r22.5 Stock Retreads For Coastal Solid Waste Vehicles 2019-12-13 12:00 RFQ/DIS/2019-20/246
Supply and Delivery of a Portable Breathing Air Compressor 2019-12-20 12:00 RFQ/HPS/2019-20/252
Supply and Delivery of Firefighting Hoses Complete 2019-12-20 12:00 RFQ/HPS/2019-20/251

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