Issue Date: 
Monday, August 1, 2016

Sub-contractors versus Consortiums and Joint Ventures

The Preferential Procurement Regulations, 2017 states that 30% of all Government Contracts above R30 million must be sub-contracted to specific categories of SMME's. These SMME's include, but are not limited to, black female owned and black youth owned businesses.

In order to help with the confusion that arises from whether or not one must form a Joint Venture, Consortium or sub-contractor/contractor relationship when responding to a tender it is always good to understand the definition of these types of business relationships:

  • A sub-contractor/contractor relationship arises when a main contractor hires or employs additional businesses or persons outside of the main contractors own business to do work or to deliver services as part of a larger project. The important thing to remember is that the main contractor is in charge and must ensure that the project is executed and completed as stipulated in the contract.
  • A consortium is an association of two or more individuals, companies or organisations with the objective of participating in a common activity, such as responding to a tender, or pooling their resources to achieve a common goal. Within the consortium, each participant retains their separate legal status and the consortium's control over each participant is generally limited to activities involving the joint endeavour, particularly the division of profits. A consortium is formed by contract.
  • A Joint Venture can be described as a business enterprise where two or more participants come together to share their expertise in order to win a specific contract for a set period of time. A Joint Venture is a separate entity and is not part of the individual participant's own enterprise. Therefor a Joint Venture must have its own set of rules by which it is managed and this is called a Joint Venture Agreement.

In order to become a sub-contractor you will have to have a running business. Main contractors will only use dependable sub-contractors with a proven track record.
 
To learn more about this and many other tender conditions please attend one of our How-to-Tender workshops. For more information on the tender courses please email Werner at werner@how2tender.com.

This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd. which specializes in tender consulting and tender training.

Title Closing Date Tender No.
DNA sequencing reactions........x400; Post-PCR Clean-up...................x400 2019-11-01 11:00 RFQ000363
Oreochromis mossambicus fingerlings (4-6 cm)........x3000 Clarias gariepinus (7-10cm) fingerlings....................x3000 2019-11-01 11:00 RFQ000365
Appointment of a Service Provider to Further Develop,Provide Technical Application Support and Maintanance to the National Disaster Management Centre (NDMC) for a Duration of Twenty Four (24) Months. 2019-11-20 11:00 COGTA (T/ 06/ 2019
The appointment of a service provider for the supply, delivery, commissioning and warranty of one (1) inductively coupled plasma with mass spectrometer detector (ICP-MS) hyphenated to high performance liquid chromatograph with photodiode array detector and refractive index detector (HPLC-PDA/RID) for the Analytical Services North Laboratory in Pretoria 2019-11-07 11:00 4.4.12.2/ 27/ 19
Appointment of a preferred list of experts in Geoscience Mapping at the Council for Geoscience for a period of three years 2019-11-26 11:00 CGS- 2019- 42F
The appointment of a service provider for the supply, delivery and commissioning of a gas chromatograph with triple quadrupole detector (gc-msms) for the analytical services north laboratory in Pretoria. 2019-11-07 11:00 4.4.12.2/ 28/ 19
Appointment of a Training Provider For Letsema National Certificate in Banking Learnership Programme 2019-11-19 11:00 BS/ 2019/ RFB424
Appointment of a Training Provider for Kuyasa Management Development Learnership Programme. 2019-11-18 11:00 BS/ 2019/ RFB425
Appointment of a Personal Protection and Tactical Security Service Provider For Site Visits and Investigations of Derelict Holings 2019-11-15 12:00 MTK 15/ 2019
Appointment of the service provider to render cleaning and hygiene services for the Department of Rural Development and Land Reform: Bloemfontein Deeds Registry for a period of 24 months 2019-11-11 11:00 DRDLR (CRD- 04) 2019/ 20
Department of Justice:Johannesburg: Tsakane Magistrate Court: Rendering of cleaning services for a period of 24 months (EPWP) 2019-11-15 11:00 JHB.19/ 38
Department of Justice & CD: Newlands Magistrate Court, 186 Main Road: Rendering of cleaning services for a period of 24 months (EPWP). 2019-11-12 11:00 JHB.19/ 37
Consultancy services for revision of African Peer Review Mechanism (APRM) questionnaire and standardization of the national program of action 2019-11-04 11:00 EOI No.: APRM/QNPOA/001/2019
Department of Justice: Kwa-Thema, No.1 Hadebe Street, Rendering of cleaning services for a period of 24 months (EPWP) 2019-11-15 11:00 JHB.19/ 39
Department of Justice: Meyerton Magistrate Court, Senton & Boet Kruger: Rendering of cleaning services for a period of 24 months (EPWP) 2019-11-15 11:00 JHB.19/ 40
Department of Justice & CD: Randburg Magistrate Court, 18 Sherpard Avenue, Kengsington B: Rendering of cleaning services for a period of 24 months (EPWP) 2019-11-12 11:00 JHB.19/ 36
Department of Justice & CD: Office of the Chief Justice, 188 4th Street, Noordwyk: Rendering of cleaning services for a period of 24 months (EPWP) 2019-11-19 11:00 JHB.19/ 35
Justice: Melmoth Magistrate Court: Provision of Cleaning and Hygiene Services for the period of 36 Months 2019-10-25 11:00 DBN117/ 2019
Justice: Nquthu Magistrate Court: 36 Months Cleaning and Hygiene Services 2019-11-13 11:00 DBN144/ 2019
Request for Expressions of Interest (Recruitment of Firm to Support the Operationalisation of Pan African University Innovation Centers of Excellence) QCBS 2019-11-08 12:00 No reference number

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8 things you must know about Joint Ventures

By Werner van Rooyen

31 January 2019

One of the most popular types of business arrangements that are being used by South Africans, in the Tender environment, is Joint Ventures.

There are eight things that you must know about Joint Ventures:

  1. Definition

A Joint Venture is a strategic cooperation where two or... Read More

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