Issue Date: 
Thursday, October 31, 2019

Joint Ventures and Tenders

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

Joint ventures are collaborative arrangements where two or more businesses come together to share their expertise to win a specific contract for a set period for a common purpose such as bidding for a tender. A Joint Venture is a separate entity and is not part of the individual participant’s own enterprise. 

There are many examples of successful Joint Ventures, such as Sony-Ericsson, Virgin Mobile India Limited, Nokia (Siemens AG and Nokia Corp), Cadbury Schweppes PLC Carlyle Group Joint Venture and Chery Jaguar Land Rover Automotive Company.  They are all well-known and are very lucrative. 

Partners in a Joint Ventures join forces and make Joint Ventures a good business idea to compete if you do not have all the necessary skills, expertise, recourses, infrastructure, or capital that are required for a specific tender.

It is important to know the following 8 things about Joint Ventures:

  1. Definition
    A Joint Venture is a strategic cooperation where two or more people and/or companies agree to contribute goods, services and/or capital to a common commercial enterprise for the purpose of a specific tender or request for proposal.
  2. Difference between a Joint Venture and a Private Company
    The moment two or more people and/or companies unite to do business together it can be construed of being a Joint Venture, but once these parties to this business register a formal private company then it is no longer a Joint Venture.
  3. Difference between a Joint Venture and a Partnership
    A Joint Venture often sounds much like a Partnership but the main difference between a Joint Venture and a Partnership is that the members of a Joint Venture have come together for a specific Tender or Request for Proposal, while a Partnership is usually formed between two or more people to run a business for an unlimited period.
  4. Share expenses
    Each member of a Joint Venture only shares the expenses of the specific Tender for which the Joint Venture was established.
  5. Income Tax
    Each member of a Joint Venture is liable for their own Income Tax.  If the Joint Venture is profitable the net income of the Joint Venture will be distributed to each member of the Joint Venture according to their percentage contribution towards the Joint Venture.  The members will then be tax in their individual capacity or if the member of the Joint Venture is company, then the gains of the Joint Venture will form part of the income of the company and will be taxed according to company tax legislation.
  6. Ownership
    Especially important to realize is that each member of the Joint Venture keeps ownership of their own personal fixed assets as well as their current assets.
  7. Bank account
    It is important to open a separate bank account for the Joint Venture.  You do not want your private funds to get entangled with the funds of the Joint Venture.
  8. Set of accounts
    Always keep a separate set of accounts for the Joint Venture.  You do not want the Joint Venture transactions to get mixed up with your own transactions or those of your company.

Remember, before you dismiss a Tender or Request for Proposal as undoable, think of teaming up with other businesses and/or people in the form of Joint Venture and bid through the Joint Venture. Do not underestimate the power of Joint Ventures.

Joint Ventures can bring you the success you always wanted without being trapped in a never-ending partnership or shareholding scenario.

Countless tenders have been awarded to Joint Ventures and many more tenders will be awarded to Joint Ventures. 

We foresee that Joint Ventures will become an integral part of South Africa’s business sphere.

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.
For the hire of a crewed 41.5 x 10m barge and a tug boat with a 10ton bollard pull capacity at seawall, berth 9 pier 1, Durban harbour 2020-07-21 10:00 CRAC DNR 32500
Printing services - AU diary and calendar 2021 - Framework Contract 2020-08-06 15:00 AUC/DIC/G/005
Supply and delivery of 18 x (xqty) hydroulic lifting trolleys for Forensic Pathology Services for 14 hospitals 2020-08-05 12:00 HEAL/208/20/MP Re-advertisement
Supply and delivery of 8 x dialysis machines with RO plant for Rob Ferreira and Witbank Hospital 2020-08-05 12:00 HEAL/209/20/MP Re-advertisement
Provision of Ambulance Services and Outsourcing ERT Services at Matla Power Station for a period of five (5) years. 2020-09-03 10:00 MPGXC006225
Occupational health and safety consultant for a period of three (3) years 2020-07-16 16:00 RFQ/002/2020
Invitation to tender for Farm Rietfontein Portion 47 395 JR 2020-07-28 10:00 IRP265
OHS Agent_Upgrade of Hornlee Sewer_T06 of 2019/2020 2020-07-14 12:00 12/2020/21
OHS Agent_Hornlee_Replacement & Rehabilitation of Existing Water Network_T21 of 2019/2020 2020-07-14 12:00 13/2020/21
Supply and delivery of hand sanitizer, gloves and masks 2020-07-14 12:00 14/2020/2021
Supply and Delivery of Laptops 2020-07-16 12:00 15/2020/21
Provision of loan finance 2020-08-05 12:00 T 01 OF 2020/21
Appointment of a suitable qualified and experienced service provider as auctioneer for a period of three (3) years to conduct the auctions of municipal owned fixed assets, moveable property and impounded vehicles on behalf of the municipality 2020-08-05 12:00 T 02 of 2020/21
Erratum: Extension of validity period for additional: 120 days for electrical database and mechanical database 2020-07-10 11:00 ZNB 5731/ 2019- H/ ZNB 5730/ 2019- H
Erratum: Provide a fully managed enterprise picture archiving and communications system for the Gauteng Department of Health (GDOH) with maintenance and support for a five (5) year period 2020-07-24 11:00 RFB 2186/ 2020
Erratum: Supply & install a hosted internet protocol telephone system & IP phones for the Dep of Higher Education & Training 2020-07-17 11:00 RFB 2158/ 2020
Erratum: Request for Proposals: Appointment of a panel of suitable service providers to supply and deliver office stationery to the NHBRC for a period of three (03) years. 2020-07-10 11:00 NHBRC 41/ 2019
Erratum: Supply maintenance of network cabling for saps for a period of three (03) years 2020-07-24 11:00 RFB 2126 - 2019
Request for Proposal: Establishment of a frame agreement for provision of translation and interpretation services for UNHCR offices in regional bureau of Southern Africa. 2020-08-07 16:00 RFP/020/HCR/RBSA/SUP/019
Request for Proposal: Establishment of a frame agreement for provision of maintenance services for canon multifunction printers for UNHCR offices in South Africa 2020-08-07 16:00 RFP/020/HCR/RBSA/SUP/017

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