Contents
What is bidding consortium?
A bidding consortium is a group of individual bidders who submit a singular joint offer for a contract in a public procurement process. This process can occur with an established consortium or with a new group that has come together for a specific contract.
What are the reasons for companies to form a bid consortium?
Organisations may choose to come together to bid as a consortium when they either feel that they don’t have the capability to fulfill the relevant requirements of the project on their own as a single company but would be able to when combined with another company, or when they feel that the collaboration with another company would be far more beneficial.
What are the advantages of consortium bidding?
A major advantage of consortium bidding lies within the relationships between the companies. Unlike sub-contracting onto projects, those who form a consortium cannot be replaced once the bid is placed together.
The companies also benefit from having a belt of enhanced capabilities that will further provide more value to the project. With that benefit comes with the added capability of entering new markets they would not normally be able to conquer simply because of their joined skills and resources.
How is consortium bidding referred to in the ITT?
In the context of an Invitation to Tender (ITT), consortium bidding is usually addressed in specific sections that define how multiple organizations can jointly submit a bid. The ITT might refer to this type of collaboration using terms like “Consortium,” “Joint Venture,” or “Partnership.” The relevant sections in the ITT often include:
- Instructions to bidders – This section typically provides general guidelines for bid submission, including whether bids from consortiums are permitted and what requirements must be met.
- Eligibility Criteria – Here, the ITT outlines the conditions under which consortiums can participate, detailing any specific qualifications or experience needed from each member of the consortium.
- Submission Requirements – This part specifies the documents required from each consortium member, such as individual financial reports, past performance records, and declarations of joint liability.
- Evaluation Criteria – The evaluation section explains how consortium bids will be judged, including any special considerations for the combined capabilities and strengths of the consortium members.
- Legal and Contractual Provisions – This section addresses the legal structure and responsibilities of the consortium, as well as the nature of the contract between the consortium members. It may include requirements for a consortium agreement or memorandum of understanding (MOU).
- Consortium Agreement – The ITT might provide a template or guidelines for creating a consortium agreement, outlining how the members will collaborate, share risks and rewards, and handle any potential conflicts.
In discussing consortium bidding, the ITT might include statements such as:
- “Consortium bids must clearly define the roles and responsibilities of each member.”
- “Bids from consortiums are accepted, provided that a consortium agreement is included with the submission.”
- “Each member of the consortium must meet the specified eligibility requirements.”
These sections and statements help ensure that all involved parties understand the requirements and expectations for submitting a bid as a consortium.
