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If you are interested in construction or tendering contractors, you will most likely hear of consortium contractors or consortium of contractors in bidding. In bidding, there is a concept of a consortium of contractors participating, so how should we understand the nature of the partnership? The following article will help readers reference!
What is a consortium contractor?
In a tender, there must be the main contractor. The main contractor is responsible for participating in the bid under the name of the request and directly signing and performing the contract if selected. The main contractor can be an independent contractor or a consortium member. So what is a consortium contractor?
According to the provisions of the law on bidding, a contractor consortium is two or more enterprises under their names to jointly bid and execute a bidding package. The bidding package can be a part of the whole project according to the bidding documents. Contractors must form a joint venture if only one contractor cannot perform that bidding package.
The members of the joint venture contractor shall perform the workload according to the bidding documents. The duties of each joint venture member, the partnership’s leading member, are specified in the partnership contract.
A contractor consortium is a form of cooperation in which the consortium members do not have to establish a new legal entity. The joint venture contractor will be dissolved when the work of the bidding package under the contract with the investor is completed.
What is the reason for making a joint venture?
Contractors usually have to form a joint venture to form a consortium because if only one of them participates, it may not be able to carry out the bidding package. Therefore, contractors must include a partnership to be qualified to participate in the bidding for the above box.
Another reason individual contractors join a joint venture is that the bidding package is too large. The consortium members want to optimize the work in the bidding documents to suit their capabilities without signing additional contracts with subcontractors.
Can joint venture contractors participate in bidding?
A contractor joining one or more bidders to bid in a bid unit is called a consortium. The members must have a written agreement if the contractor wants to join a joint venture. The document clearly defines the responsibilities of the standing members and each member in the consortium. Thus, a joint venture contract is a form of bidding, and a joint venture contractor is entitled to bid.
It is appropriate to call a joint venture between contractors a joint venture agreement or a joint venture contract because the nature of this partnership is an agreement between two or more parties when bidding under a common name and must be made in writing.
Bidders and investors can participate in the bid as an independent or joint venture but must have valid status as prescribed.
+ The contractor has an operation registration license issued by a competent authority;
+ The contractor has independent financial accounting;
+ The contractor is not in the process of dissolution; not be concluded to be in bankruptcy or insolvent debt as prescribed by law;
+ Bidders registered on the national bidding network system;
+ Ensure fair competition in bidding.
+ The contractor is not in the period of being banned from bidding;
+ The contractor is on the shortlist in case the shortlist has been selected;
+ If it is a foreign contractor, it must enter into a partnership with a domestic contract or use a domestic sub-contractor. If the domestic contractor cannot participate in any part of the bidding package, it may be considered for a joint venture with another foreign contractor.
Thus, a qualified contractor can participate in the bidding as an independent or a joint venture. The members must have a written agreement if contractors want to form a joint venture. This document clearly defines the responsibilities of the head member and each federation member.
What are the responsibilities of the consortium contractor?
Each member of the joint venture contractor must be jointly and severally responsible to the investor for the work they undertake and for the overall result of the bidding package. In the case of a joint venture contractor, each joint venture member is responsible for making a complete drawing of the work performed by them and may not authorize another member of the partnership to achieve it.
The capacity and experience of each member of the joint venture contractor must meet the ability to complete the work that that member undertakes in the joint venture. If any consortium member does not meet the requirements in terms of power and experience, the consortium contractor is assessed as not meeting the needs.
Joint venture contractors are not a type of business but a form of cooperation in bidding. However, each member contractor in the consortium has rights and obligations clearly defined by law. Each member must fulfill its responsibilities as it will affect other member contractors. Thus, we have introduced a type of contractor in the bidding: a joint venture contractor.
Hopefully, the article we bring will help you understand more about contractors in general and joint venture contractors in particular. Follow our website, Indianapolis Contractors, for more information about construction contractors.