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.
Appointment of a panel of radio stations 2021-05-21 11:00 GRDM/25/20-21
Appointment of service provider(s) to develop land use schemes for a period of (12) twelve months for Great Kei Local Municipality in Eastern Cape Province. 2021-05-27 11:00 5/2/2/1 DALRRD-0002 (2021/2022)
Appointment of service provider(s) to develop land use schemes for a period of (12) twelve months for Enoch Mgijima Local Municipality in Eastern Cape Province. 2021-05-27 11:00 5/2/2/1 DALRRD-0001 (2021/2022)
Request for recruiting a Panel of Legal Firms to deal with various litigations affecting Great Kei Local Municipality .for the period of one (01) year. 2021-05-10 11:00 SCM: 07/2020/21
Supply Installation and Management Of Sts6 Edition 2 Compliant Prepayment Electricity Vending: Period 1 July 2021 To 30 June 2024 2021-05-24 12:00 B/SM 67/21
Supply and Delivery Of Replacement ICT Hardware Equipment as and When Required for the Stellenbosch Municipality for a Period Ending 30 June 2024. 2021-05-31 12:00 BSM 90/21
Supply and Delivery Of Pole Mount Dome Miniature Circuit Breaker Cover Item: 540 2021-05-10 11:00 None
Supply and Delivery of Thermal Imaging Camera 2021-05-10 11:00 None
Supply and Delivery of 20 X Notebook/Laptops 2021-05-19 12:00 GLM033/2021
Supply and delivery of X 4x2 Double Cab bakkie for plumbing 2021-05-19 12:00 GLM032/2021
Supply and Delivery of Double Cab 4 X 4 Diesel Bakkie for electrical 2021-05-19 12:00 GLM031/2021
Supply and Delivery of Kit 3 Partial Discharge Scanner 2021-05-10 11:00 None
Supply and Delivery of Grader (Re-advert) 2021-05-19 12:00 GLM007/2021
Supply and Delivery of a Self Propelled Road Sweeper (Re-advert) 2021-05-19 12:00 GLM006/2021
Supply and Delivery of a 4X4 Single Cab Bakkie for Workshop (Re-advert) 2021-05-19 12:00 GLM005/2021
Service provider to design, compile and print the Dannhauser Council Exit Report Booklet. 2021-06-03 12:00 04/05/2021
Expression of Interest for Designs and Project Management of Durnacol sports centre in ward 2. 2021-06-02 12:00 03/05/2021
Installation of alarm system, cctv carameras and armed response services for the period of 36 months. 2021-06-15 12:00 05/05/2021
The compilation of the general valuation and supplementary valuation rolls for the period 01 July 2022 – 30 June 2027 2021-06-01 12:00 CED 19/2020-2021
Supply of pre-payment vending system and services 2021-05-28 14:00 SCM 39/2021

Pages

Who is the bidder or his or her representative?

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

In Organ of State tenders, the Standard Bidding Document 4 – Declaration of Inters – ask in paragraph 2.1 the following: “Full name of bidder or his or her representative... Read More

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