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.
The Compilation of an Invasive species control plan for ERF 11827 of The Afrikaans Language Monument, Paarl 2021-05-25 14:00 ATM001-2020/2021
General cleaning, garden maintenance at various facilities incl. supply of containers for the City of Cape Town 2021-05-25 10:00 325S/2020/21
Consultancy service for provision of mortality surveillance training for Africa Centres for Disease Control and Prevention (AFRICA CDC) 2021-05-11 15:00 No reference number
Consultancy services on security sector reform (SSR) in the Kingdom of Lesotho 2021-05-12 15:00 AUC/PAPS/C/028
Consultancy service Research to Develop a Capacity Building Program on Operationalization of Postal e-Commerce Platforms. 2021-05-12 15:00 AUC/IED/C/001
Construction Of The Decommissioning Works For The Uniondale Landfill 2021-05-28 12:00 COM012 OF 2021
Call For Proposal: Supply and Delivery of Various Software Licenses for a Period of 3 Years 2021-05-13 12:00 SCM 64 OF 20/21
Appointment Of Service Provider To Manage The Operational and Strategic Support Services For The Expanded Public Works Programme(Epwp) 2021-05-14 12:00 SCM 63 OF 20/21
Supply And Maintenance Of Mimecast Email Security, Email Continuity/Email Disaster Recovery, Email Archiving And Targeted Threat Protection 2021-05-11 12:00 SCM 58 OF 20/21
Supply and Delivery of Virgin Transformer Oil and Regenerated Transformer Oil 2021-05-12 12:00 E13 OF 2021
The Provision of Rma.Net Software Licence & Service Level Agreement for a Period of Thirty-Six (36) Months 2021-05-21 12:00 UGU-05-1574-2021
Provision Of Support Services and a Service Level Agreement Of The Existing Unify Communication System and Proteus Telephone Management System for a Period Of Thirty-Six (36) Months Including Rates for Propriety Devices 2021-05-28 12:00 UGU-05-1580-2021
Provision Of Short-Term Insurance And Risk Management Services To Ugu District Municipality For A Period Of Thirty-Six (36) Months 2021-05-28 12:00 UGU-06-1579-2021
Appointment of a Service Provider To Provide Cleaning Services at Mkondeni Market, Tourism and Pietermaritzburg Airport. 2021-05-13 12:00 6 OF 2021 SECTION 6
Appointment of a Service Provider to Provide Grass Cutting and Clearing Services at Pietermaritburg Airport 2021-05-18 12:00 SCM 62 OF 2020/2021
Appointment of a Service Provider For Support And Maintenance Of The Current Network Infrastructure, Information Technology Security Management Services and the Supply, Installation And Commissioning Of New Software And Hardware 2021-05-25 12:00 SCM 68 OF 20/21
Appointment of Electrical Consulants For Infrastructure Services 2021-05-25 12:00 SCM 67 OF 20/21
Proposal Call For The Support And Maintenance of The Current Enterprise Vmware Servers, Backup and Storage Hardware Infrastructure and For The Supply, Installation and Commissioning Of New Software and Hardware for a Period of Three Years 2021-05-19 12:00 SCM 65 OF 20/21
Appointment of a Service Provider To Provide Cleaning Services At Mkondeni Market, Tourism And Pietermaritzburg Airport. 2021-05-13 12:00 6 OF 2021 SECTION 6
Supply and Delivery Of One New Landfill Compactor to the Msunduzi Municipality 2021-05-25 12:00 SCM 69 OF 2020/2021

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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