Joint venture bids are now common in competitive procurement, in both the public and the private sector. More and more, buyers ask bidders to join forces so they can pool skills, show stronger balance sheets, and meet set ownership rules, such as minimum local ownership or participation by minority or SME partners. Getting the structure right early helps teams deliver the bid and manage risk, and to protect themselves if the bid does not succeed.

A key decision is when to set up the bidding entity. Some RFPs allow a consortium to bid based on a binding consortium agreement, with incorporation of the joint venture entity required only once bidder achieves preferred bidder status. Others require the joint venture company and its shareholding to be in place at bid submission, sometimes with a signed shareholders agreement.

If it is permissible to bid on the basis of a consortium agreement, the bidding consortium can save upfront costs and keep flexibility while the solution, pricing, and risk allocation evolve. This is especially useful where the technical scope may change during dialogue. If the structure must be in place at submission, exact shareholder terms must be settled earlier. This can be inconvenient and costly if the bid is unsuccessful, as teams may have formed an entity and negotiated detailed documents fruitlessly for a single project.

Regardless of timing, strong pre-bid documentation is essential. A clear consortium agreement should cover at least participation percentages, exclusivity, roles and responsibilities, decision-making, bid cost sharing, confidentiality, liability caps, and dispute resolution. It should set out when the team will incorporate a special purpose vehicle if the process advances and capture the key terms for the future shareholders agreement, including board composition, reserved matters, transfer restrictions, funding mechanics, deadlock resolution, and exit rights.

The pre-bid agreement should cater for the situation where the bid is not successful. Breakup terms for jointly developed IP and bid materials should be considered, as well as the treatment of third-party relationships, and a fair reconciliation of costs.

Ownership and control rules deserve careful attention. Where the buyer requires local, minority, or sector-specific ownership, the structure should take into account the equity split and also governance and economics. Voting rights, reserved matters, profit distributions, and management appointments should be aligned with the policy intent. Financing and back-to-back subcontracting should be scrutinised so as not to undermine those goals.

Good structuring will not guarantee a win, but it protects the parties, builds credibility with the buyer, and preserves value whether the bid advances or not. As more procurements require collaboration and specific ownership composition, getting the corporate structure right is as important as getting the technical solution right.