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Consortium Agreement in South Africa

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Companies form a Consortium Agreement with each other to undertake a large tender / contract. This is an agreement only, not a new entity as with Joint Ventures. Here the role and responsibilities of each party is spelled out in terms of which resources (human, financial, technology) are committed to the project. The ‘Consortium’ is formed, then applies for the tender / contract and execute it together. After the tender / contract is done, the Consortium Agreement is done as well. If you want to apply for a short-term tender in which applicants are required to have a variety of skills which you don’t have – but a partnering company may have – a Consortium is the way to go. 

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Our Consortium Agreement Service will:

Allow you to apply for big tenders and contracts.

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What is a Consortium Agreement in South Africa?

Companies form a Consortium Agreement with each other to undertake a large tender / contract. This is an agreement only, not a new entity as with Joint Ventures. Here the role and responsibilities of each party is spelled out in terms of which resources (human, financial, technology) are committed to the project.

  1. Win Big Tenders / Contracts. You might try to apply for a big tender, but not have all the resources required for execution. This is a waste of time. With a Consortium you can join hands with another Company which will give you more capacity, expertise, resources, markets and technology which big tenders will require.
  2. Simplicity. In comparison to a Joint Venture, a Consortium is very simple. It’s not an entity, just an agreement like an SLA. It can quickly be amended during the tender and expire after the contract / tender without additional costs and paperwork.

A Consortium is a group made up of two or more individuals, companies, or governments that work together to achieving a common objective. Entities that participate in a Consortium pool resources but are otherwise only responsible for the obligations that are set out in the Consortium’s Agreement.

A Joint Venture is a separate entity that is formed where two or more participants come together to share their expertise to win a specific contract for a set period.

A Consortium Agreement is an agreement only, not a new entity. Here the role and responsibilities of each party is spelled out in terms of which resources (human, financial, technology) are committed to the project. The ‘Consortium’ is formed, then applies for the tender / contract and execute it together.

A Consortium is formed by contract. It 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. 

Our internal attorney, Tsitsi Kinnear has over 6 years’ experience with Consortiums. She also has a Law Degree from the University of South Africa.

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