When two or more companies decide to team up to pursue a government contract, they're entering into a joint venture—a formal partnership that allows them to bid and perform as a single entity. According to the Supply Manual Section 4.10, this is "an association of two or more parties who combine their money, property, knowledge, expertise or other resources in a single undertaking or enterprise." This structure is particularly common when companies need to combine complementary capabilities or when one party brings certification under set-aside programs like the Procurement Strategy for Aboriginal Business.
How It Works
Here's the thing: when you bid as a joint venture, the government treats you as a single supplier. That means you submit one joint bid, and if successful, you enter into one contract together. Each member of the venture is jointly and severally liable for performance—so if one partner fails to deliver their piece, the others are still on the hook for the entire contract.
This isn't a casual arrangement.
The structure requires careful documentation. You'll need a formal joint venture agreement that outlines each party's responsibilities, profit-sharing arrangements, and decision-making authority. PSPC and other departments will want to see this agreement, and it needs to be crystal clear about who's doing what. In practice, one member often takes the lead as the prime contractor while others contribute specific expertise or meet particular requirements.
Employment equity obligations add another layer of complexity. Under the Federal Contractors Program, any joint venture bidding on contracts worth $1 million or more (including taxes) triggers FCP requirements. But here's where it gets interesting: each member of the venture assesses their FCP obligations independently. If a member has 100 or more permanent employees, they need their own Agreement to Implement Employment Equity. If any member appears on the FCP's 'Limited Eligibility to Bid' list, your entire bid becomes non-responsive—no exceptions.
Key Considerations
- Joint and several liability means total exposure. You're not just responsible for your portion—you're accountable for the entire contract if your partners can't perform. Choose your partners carefully and ensure you have the resources to backstop their obligations if necessary.
- Set-aside eligibility flows through the venture structure. If you're pursuing an Indigenous procurement opportunity, verify that the qualifying partner meets the ownership and control requirements. Some agencies require the Indigenous partner to hold a minimum percentage of the venture or perform a minimum share of the work.
- Each FCP obligation is assessed at the member level, not the venture level. A 50-employee company partnering with a 500-employee firm doesn't suddenly face FCP obligations—but the larger partner does, and their compliance status affects the whole bid.
- Documentation requirements go beyond the contract itself. Expect to provide corporate resolutions, authority to bind letters, and detailed breakdowns of work allocation. Treasury Board policies require transparency about who's actually doing the work.
Related Terms
Subcontractor, Prime Contractor, Procurement Strategy for Aboriginal Business (PSAB), Federal Contractors Program (FCP), Set-Aside Contract
Sources
- Supply Manual - Section 4.10: Joint Ventures
- Federal Contractors Program – Joint Venture Suppliers (IPG-086)
- Buyandsell.gc.ca - Bidding as a Joint Venture
Bottom line: joint ventures can open doors to opportunities you couldn't pursue alone, but they require careful partner selection and thorough documentation. The liability exposure is real, so treat the arrangement with the seriousness it deserves.