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.
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
Appointment of a Panel Of Contractors for the Supply of Hot Mix Asphalt 2021-05-25 12:00 31 OF 2021 – SECTION 1
Traffic control on rural provincial roads for the period ending 30 June 2024 2021-05-26 11:00 T 2021/070
Calling Of Tenders for the Provision And Maintenance Of Fuel Management System For Msunduzi Municipal Owned Vehicles 2021-05-17 12:00 SS 5 OF 2021 SECTION 3
Unblocking and cleaning of drainage pipe structures in rural provincial public sector reserves for the period ending 30 June 2024 2021-05-26 11:00 T 2021/069
Medical certificates of fitness for affected road maintenance, road construction and workshop employees at the Cape Winelands District Municipality for the period ending to 30 June 2024 2021-05-19 11:00 T 2021/064
Provision and maintenance of chemical toilets at Sandhills for the period 01 July 2021 to 30 June 2024 2021-05-19 11:00 T 2021/013
Construction of a New Wearing Course and Associated Works for Bitou Waste Transfer Station 2021-05-10 12:00 SCM/2021/63/COMM
Security, patrol and access control services at 46 Alexander Street, 29 Du Toit Street and c/o Langenhoven Street and Bird Street, as well as at Papegaairand Street [fire services], Stellenbosch for the period ending 30 June 2024 2021-05-19 11:00 T 2021/007
Security, patrol and access control services at 194 Main Street, Paarl for the period ending 30 June 2024 2021-05-19 11:00 T 2021/006
Security, patrol and access control services at 51 Trappes Street, Worcester for the period ending 30 June 2024 2021-05-19 11:00 T 2021/005
Paarl Arboretum Container Classroom and Entrance Forecourt Upgrade 2021-05-27 10:00 COM P1/2021
Supply and Delivery of Beverages on as and when required basis at Duvha Power Station for a period of 5 (Five) years 2021-06-14 10:00 MPGXC006633
The provision of procurement services for Kriel Power Station for a period of 36 months 2021-05-12 10:00 GEN3364
The provision of materials management services for Kriel Power Station for a period of 36 months 2021-05-13 10:00 GEN3363
Disaster recovery solution 2021-05-21 11:00 WDM/2020/21-07
Printing, Sorting and Posting of Municipal Consumer Account Statements for a period of 24 months 2021-05-17 12:00 EPMLM/8/3/389
Appointment of a Panel of Audit Firms for Co-sourcing of the Internal Audit Functions on a need basis for a period of 36 months 2021-05-18 12:00 EPMLM/8/3/386
Appointment of a service provider for the Provision of Traffic Contravention Management System for a period of 36 months (Re-advert) 2021-05-17 12:00 EPMLM/8/3/369
Fixed Term Contract For The Repairs; Maintenance & Refurbishment Of Water & Waste Water Infrastructure (36 months contract) 2021-05-25 11:00 INF-O&M54/2020/2021

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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