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.
Request for Proposal for appointment of service provider to source bulk media buying (space and airtime) for promotion and marketing of the Free State as a Destination. 2021-02-04 11:00 FSGLTA:01/2020/2021
Supply & delivery of protective clothing for public works staff 2021-01-21 12:00 PWBS-Q035/20/21
Supply and delivery of roads materials, equipment and tools 2021-02-02 12:00 T10/2020-2021
Supply and delivery of water and sewer materials, equipment and tools 2021-02-02 12:00 T11/2020-2021
Supply and delivery of electrical materials, equipment and tools 2021-02-02 12:00 T12/2020-2021
Training of 15 municipal employees 2021-02-02 12:00 T13/2020-2021
The replacement of the 120m MET tower cat ladders and landings 2021-01-28 10:00 KBG2013
Zoom Meetings Biz Host 1 year prepay 2021-01-18 11:00 RFQ20/21/104
Asset disposal: Subsea equipment in Port of Cape Town 2021-01-27 12:00 AD0058
Request for quotation: for the supply and delivery of food supplies for UNHCR’s Osire Refugee Settlement in Namibia 2021-01-20 23:45 RSA-2021-001
Supply and delivery of construction material 2021-01-20 12:00 SCM26/11/2020
Supply, delivery, install and service air conditioners 2021-01-20 12:00 SCM27/11/2020
Supply and delivery of the renewal of software licenses 2021-01-29 14:00 27/2021
Sale of vacant business zone I Erf: Erven 232 and 233: Merweville 2021-02-05 14:00 02/2021
Upgrading and Refurbishment of Electrical Networks (132/22/11/0.4KV) for the greater Beaufort West Municipality for the period ending June 2023. 2021-02-19 14:00 SCM 21/2021
Supply of licences for handhelds and meter reading software (re-advertisement) 2021-01-20 12:00 08/2/18/50
Supply and delivery of 3 layer fabric face masks 2021-01-27 12:00 BID 08/2/18/57
Notification of personal protective equipment (PPE) tender 2021-01-29 17:00 PH05012021- Notification of Panel PPE
Sale of scrap transformer oil at Phillipi SS - Western Cape 2021-01-19 10:00 OLT1238511
Provision of Estate Management Services 2021-01-28 12:00 NLM/EMS/2020/2021

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