Issue Date: 
Wednesday, October 14, 2020

When to choose a Joint Venture, Consortium or Sub-contracting

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

Many people ask us: how do you decide between using a Joint Venture, a Consortium or Sub-contractor in responding to a tender?

In choosing which business type to use (Joint Venture, Consortium or Sub-contracting) in responding to a bid depends on how many partners (if any) is needed to comply with the specific bid specifications.

The best option is to respond to a bid on your own. This is not always possible. There are many reasons, i.e. Sub-contracting criteria (30% Regulations), minimum B-BBEE levels, minimum Financial requirements, and the most common reason – Purchasing Authorities that combine goods and/or services that they think is one supply or product. Some bids specify that only Consortia may respond due to the complexity of the contract. All these factors will play a role in deciding which business type/tender vehicle bidders will use in responding to a specific bid.

Joint Ventures and Consortia are partnerships that is established to execute a tender. Both type of partnerships has their advantages and dis-advantages. You can find our articles describing the advantages and dis-advantages of both these business types here: https://howtotender.co.za/hints-and-tips/

The next question is: how many partners in Joint Venture or consortium? The general guideline is that Joint Ventures do not have more than 3 partners. Any number of partners above three will be better suited by forming a Consortium.

Sub-contracting is always a better option in complying with bid specifications than restricting yourself to one or more Joint Venture/Consortium partner/s. With sub-contracting the main contractor stays in control of the contract execution. It is easier to replace a sub-contractor than getting rid of a partner.

In some cases, bidders will find it necessary to establish a Joint Venture/Consortium and sub-contract a portion of the contract.

The answer to the question: When to choose a Joint Venture, Consortium or Sub-contracting will thus depend on all these factors mentioned above. Read the bid specifications carefully and make an informed decision in choosing partners and/or sub-contractors.

To learn more about this and many other tender conditions attend our “Become a Tender Expert” 2-Day workshops/webinars 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  estelle@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.
Appointment of a service provider for the provision of Sharepoint implementation and migration of current EPPF intranet onto Sharepoint 2020-11-20 12:00 No reference number
Provision of Secretarial Services 2020-11-16 12:00 NCT 4/3/2/38
Public Relations Agency 2020-11-16 12:00 SAT UK 001/20
Provision of auto-electrical repairs inclusive of supply and fitment of batteries for 6 areas 2020-11-23 10:00 149G/2020/21
Consulting engineering services for the administration and construction monitoring of the upgrade on National Route 2 from Kwamashu interchange, section 25 (km 28.6) to Umdloti River Bridge, section 26 (km 14.0) 2020-11-20 11:00 SANRAL N002-260-2018/9S-B
Provision of Panel for Business Separation Programme IT Work Stream 2020-11-25 10:00 CORP5201
Electrification of Mthatha West Phase 4 2020-11-24 12:00 SCM: 028/2020/21
Cape Mail: 3 months cleaning and hygiene services 2020-11-04 11:00 RFQ 20/21/013 I Cape
Appointment of a service provider to provide firefighting assessment for insurability 2020-10-28 12:00 RFQ/TIM/001/2020
Procurement of an Audit management Software Tool for Armscor 2020-11-09 11:00 EICT/2020/12
Appointment of the service provider for the supply, installation and maintenance of Dell Core Switch for Public Protector South Africa (PPSA) 2020-11-13 11:00 PPSA 009/2020
Appointment of a Panel of Service Providers for Municipal Vehicles for a period of 3 Yrs 2020-11-27 12:00 PS 013 OF 2020
Supply and delivery of ready mix concrete and sand 2020-10-27 10:00 CRAC-ELF-34080
Supply and delivery of road works materials 2020-10-30 12:00 SRVM-RFQ 05/2021
Supply and delivery of plumbing accessories and fittings 2020-11-02 12:00 SRVM-RFQ 08/2021
The provision of physical guarding services in the KZN OU and east grid (distribution, transmission and telecoms) 2020-11-17 10:00 KZN0088/DG
Disposal of scrap ferrous metal 2020-11-11 10:00 MP020-06
The provision of C&I maintenance at Komati PO 2020-11-11 10:00 MPGXC006244R1
Appointment of a transaction advisor for the KZN Growth Fund Trust 2020-11-03 12:00 KGFT RFP 2020/017
Provision of proof reading and editing services of sector skills plan (SSP) and marketing related publication as and when required for the period until 31 March 2021. 2020-10-26 11:00 RFQ/2020/21/38

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