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.
Supply, Delivery and Off-loading and Installation of Perimeter Fence for Tzaneen Correctional Centre: Polokwane Management Area. 2021-01-18 11:00 LMN 04/ 2020
Supply, delivery, installation & commissioning of a new fully automatic 24 point milking machine to Kirkwood Management Area 2021-01-15 11:00 KIRB 1/ 2020
Appointment of a service provider for servicing and repairs of earth moving Plant, Machinery and Municipal Vehicles for a period of Three years 2020-12-21 11:00 PSJLM-BTO-2020/21-33
Provision for the Appointment of an Energy Expert for a period of 6 Months 2020-12-01 13:00 EWSETA/RFQ/72/2020
Provision for the Appointment of a Quality Assurance Specialist Manager 2020-12-03 13:00 EWSETA/RFQ/70/2020
Provision of cleaning services in the EWSETA head office 2020-12-01 13:00 EWSETA/RFQ/66/2020
Request for proposals: Provision of external audit services 2020-12-17 12:00 CS/SCM/FINANCE/R20-21/13
Covid-19 Hygiene Services 2021-01-07 12:00 CO 20/26 O
Disposable Face Masks 2020-12-11 11:00 iThemba LABS – RFQ: iLABS/RFQ 2020/21:106
Supply and Delivery of COVID-19 Rapid Testing Kits 2020-12-11 11:00 iThemba LABS: iLABS/RFQ 2020/21:107
Panel of forensic investigation services 2020-12-23 12:00 MW/9/7/2020/2021
Provide Security services for emails and website at Majuba TVET College 2021-01-11 12:00 IT 19/06 C
Request for Information (RFI) for a Transmission Plant Historian 2021-01-28 10:00 CORP5235
Provision of ICT Platform as a Service including backup, Replication and Disaster recovery 2021-01-11 12:00 IT 19/07 C
Servicing of aircons at SAFCOL Roburnia Plantation 2020-12-02 12:00 RFQ/737/183
Framing of an approved list of suppliers to provide transportation services to Transnet Engineering on an “as and when” required basis for a period of three (3) years 2021-01-19 10:00 TE20-KLP-8GE-13130
Provide Annual Licensing and Support Services for Vidyo Connect at Majuba TVET College 2021-01-07 12:00 IT 21/01 O
Supply and delivery of drums and cartridges. 2020-12-02 10:00 SCM/NB14/2020/2021
Quotation for the appointment of a service provider for the supply, delivery and installation of a public address (PA) system in the auditorium. 2020-12-03 10:00 Q45-2020-21
Supply and delivery of equipment and materials 2020-12-02 10:00 SCM/NB15/2020/2021

Pages

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... Read More

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