Issue Date: 
Thursday, October 31, 2019

Types of Joint Ventures    

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

The structure of the joint venture should set out the nature of your partnership.  There are two main types of agreements:

  1. If the joint venture is a business, it will be an incorporated joint venture.  This type is not recommended when one wants to respond to a competitive bid or a request for quotation.
  2. A co-operative arrangement between two existing parties that keep their separate identities is called a contractual joint venture.  This type of joint venture is the safest option to use in responding ton tenders.

In both types mentioned above a Joint Venture Agreement (JVA) is crucial in managing the joint venture.

The joint venture agreement should include:

  • Objectives: keep it simple and try to have no more than five objectives.
  • Funding: both parties need to specify how much funding they will put into the venture, and for how long.
  • Assets: list any assets or employees that will be transferred throughout the duration of the joint venture.
  • Intellectual property: state who owns any intellectual property created during the joint venture and how any financial benefits will be distributed.
  • Roles: clearly indicate who has responsibility for the processes involved during the joint venture.  If you are setting up a new company, the composition of the Board – e.g. Chief Executive and Chief Financial Officer - should be identified and voting rights agreed.
  • Agreement: incorporated joint venture agreements may also need to include a shareholders’ agreement, covering issues such as dividend policy and how the management accounts will be produced and made available.
  • Third parties: any consents or approvals needed from third parties should be explained in the agreement.
  • Finances: state how any profits or losses will be divided between parties.  Liabilities must also be clearly listed.
  • Disputes: specify a mechanism by which any disputes can be resolved, such as arbitration by an agreed third party.
  • Duration: specify how long the joint venture would last.  If it is open-ended the agreement should state the period of notice that each party should give if they want to withdraw.
  • Confidentiality: you may wish to consider a confidentiality or non-disclosure agreement.
  • Principles: include a statement that is not legally binding on the two parties.  Instead it should be a statement of principles – enabling the parties to negotiate a final, legally definitive agreement in good faith.

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.
Department of Health: Dundee Regional: Upgrades and renovations to Dundee regional laundry. Only bidders who are 6GB and above will legible to bid. 2020-08-03 11:00 ZNTL 02400W: WIMS 055041
Goodwood: Correctional Centre: Intergrated Security Systems (ISS) Appointment of Electrical Engineer: 36 Months: Only BBBEE Level 1 & 2 2020-07-31 11:00 CPT1003 / 20
Cape Town: Parliamentary Villages: Appointment of a specialised deep cleaning contractor for a period of 24 mnoths: Only BBBEE Level 1 & 2 2020-07-31 11:00 CPT1004 / 20
Malmesbury : Correctional Centre : Intergrated Security Systems (ISS) Appointment of Electrical Engineer : 36 Months : Only BBBEE Level 1 & 2 2020-07-31 11:00 CPT1002 / 20
RFB 2190-2020: Provision of hygiene services to SITA Erasmuskloof, Centurion, Numerus and Beta buildings for a period of 36 months. 2020-07-31 11:00 RFB 2190- 2020
RFB 2147-2020: Provide Maintenance and Support of Video Conferencing Equipment and related Software to Department of Correctional Services (DCS) for a period of twelve (12) months. 2020-07-31 11:00 RFB 2147- 2020
Appointment of a service provider to deliver cleaning services to SITA Mpumalanga buildings (Nelspruit and Middelburg) for a period of 36 months. 2020-07-31 11:00 RFB 2173/ 2020
Request to place and advertisement of the Bid: RTMC BID 04/2020/21 for appointment of a service provider to provide security services at RTMC Colleges (Boekenhoutkloof and Denel Campus) and Head Office (Eco Park, Centurion) for a period of two (2) years 2020-08-05 11:00 RTMC BID 04/ 2020/ 21
Request to place and advertisement of the Bid: RTMC BID 02/2020/21 for appointment of a panel for Information Technology and related services for a period of five (5) years 2020-08-04 11:00 RTMC BID 02/ 2020/ 21
Appointment of a service provider to intergrate gender based violence (GBV) system and victims empowerment (VEP) system to enable the information exchange between the intergrated justice system (IJS) cluster departments 2020-07-31 11:00 SD04/ 2020
Appointment of a service provider to develop an alternative care management system 2020-07-31 11:00 SD05/ 2020
Department of Public Works: Harry Gwala District Office, 2 Margaret Street: Ixopo: Provision of Security Service for the period of 36 months 2020-08-13 11:00 ZNT 2955W
Appointment of a service provider for facility management services at a detention facility for illegal immigrants pending deportation to their countries of origin by the Department of Home Affairs for a period of sixty (60) months. 2020-08-07 11:00 DHA10- 2020
To supply and fitting of Steel Cabinets for Five (5) Hospitality Kitchens. 2020-08-03 11:00 EEC/ T02/ 2020
The provisioning of optometric services and optometric consumables for a period of three (3) years with an option to extend for an additional two (2) years based on performance for Red Cross War Memorial Children’s Hospital (RCWMCH) 2020-08-07 11:00 RCCH07/ 2020
TBH 504/2020: For the installation of waste compacting unit and rendering of a waste compacting and removal service at Tygerberg Hospital for a period of three (3) years 01 September 2020 until 30 August 2023, thereafter on a month-to-month basis not exceeding four (4) months 2020-08-07 11:00 TBH 504/ 2020
Request for proposal for the appointment of strategic investor for the operationalization of Bhambanana abattoir on “operate, train & transfer” principles prequalification criteria 2020-07-30 11:00 DARD11/ 20A
Supply, deliver and offload new tractors and implements at Ethekwini and Ilembe District Offices 2020-07-30 11:00 DARD10/ 20A
Appointment of service provider to oversee the implementation of four (04) Agri-hubs in KwaZulu Natal Province. 2020-07-30 11:00 DARD09/ 20A
For the supply and delivery of frozen vegetable products for the Food Services Department at Tygerberg Hospital for a twelve (12) month period, effective 1 September 2020 until 31 August 2021 with the option to extend on a month to month basis not exceeding four (4) months 2020-08-07 11:00 TBH 306/ 2020

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