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SA’s leading service provider in tender training and assistance

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 and webinars. You can book online at https://howtotender.co.za/workshops/. Contact us at info@howtotender.co.za should you require more information. 

Remember:  We have various manuals and guides to assist you in the process of completing your tender documents.

  • The Tender Manual is a comprehensive, step by step guide how to respond to a South African Tender. It includes examples of completed SBD forms.
  • The Local Content Instruction Manual – completing Standard Bidding Document (SBD) 6.2 and Annexures C, D & E
  • The SBD Manual: Examples of completed Standard Bidding Documents.
  • Joint Venture (JV) agreement template
  • Tender 101: A beginner’s guide to tenders.
  • Tender Example: Cleaning Services.
  • Tender example: Once-off supply (with NO Functionality requirements)
  • Tender example: Once-off supply (WITH Functionality requirements)
  • Tender Example: NEC3 term contract

….. More info