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.
Management of the short-term insurance 2021-06-04 12:00 SCM/2021/64/FIN
Provision of Lifeguard Training Services 2021-05-21 12:00 SCM/2021/56/COMM
The provision and installation of tiling at the public amenity in Laaiplek, Velddrif 2021-05-17 12:00 QUOTATION 8/2/28-2021 / MN94/2021
Request for Quotation: Installation and configuration of internet server 2021-05-12 12:00 No reference number
RE-ADVERT: Installation & Management of Alarm System/Technology for a period of 3 years 2021-05-14 12:00 ALM/SCM/15/2020-21
Request for Proposals: Development of a detailed feasibility study for the procurement of Gautrain Rapid Rail Link post 2026 project in accordance with treasury regulation 16 2021-06-04 11:00 GMA/002/21
Supply and installation of aluminium panels and doors at the Civic Centre, Riversdale 2021-05-13 12:00 RFQ 72804
Provision of secretariat services to assist with the standardisation and formatting of MS Word documents. 2021-05-11 13:00 EWSETA/RFQ/0/2021
Provision of graphic design services 2021-05-11 13:00 EWSETA/RFQ/08/2021
Provision of commercial property valuation services 2021-05-10 13:00 EWSETA/RFQ/07/2021
Provision of Banking Services (5 years) (re-advert) 2021-07-23 12:00 VDM/FIN/13/04/2021/02
Water Services cost recovery (36 Months) 2021-06-09 12:00 VDM/FIN/13/04/2021/01
Actuarial valuation on employee (36 months) 2021-06-09 12:00 VDM/FIN/30/03/2021/01
Preparation of GRAP compliant AFS (12 months) 2021-06-09 12:00 VDM/FIN/08/04/2021/01
Advertisement of Land Audit as part of IDP sector plan 2021-05-18 12:00 VDM/PLAN/23/03/2021/01
Review process Audit at Water and Waste Treatment works 2021-05-18 12:00 VDM/TECH/10/03/2021/02
Supply and Install Chip Dosers Wastewater Treatment 2021-05-18 12:00 VDM/TECH/10/03/2021/01
Supplying of Sanitisers, Gloves, and Face masks 2021-05-18 12:00 VDM/COMM/07/04/2021/01
Provision of Fleet Management System and Maintenance for three years (36 Months period) 2021-06-09 12:00 VDM/CORP/24/03/2021/01
Supply and Installation of High Mass Lights 2021-05-18 12:00 VDM/TECH/25/03/2021/01

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