Joint Venture Agreement

A joint venture is, in the words of Immigration, Refugees and Citizenship Canada (IRCC) bid instructions, "an association of two or more parties who combine their money, property, knowledge, expertise or other resources in a single joint business enterprise," sometimes called a consortium. Suppliers form one to bid together on a requirement instead of bidding as a single corporation. The definition appears in the IRCC competitive requirements instructions.

A Joint Venture Agreement is the agreement that governs that association. Canadian procurement documents define the joint venture itself and set out what the bidding group must disclose, sign and accept. Those rules sit in the solicitation's instructions and clauses, and they control what a given bid must contain.

Where joint ventures appear in Canadian procurement documents

The term shows up across several kinds of federal procurement documents. It is found in competitive solicitations, non-competitive requirements, supply arrangements and the contracts that result from them. IRCC uses joint-venture language in both its competitive and non-competitive goods and services requirements. Public Services and Procurement Canada (PSPC) includes joint-venture provisions in its professional-services supply arrangements.

What IRCC requires from a joint-venture bidder

A bidder submitting as a joint venture must say so and identify the group. IRCC's competitive requirements call for the following:

• The name of each member of the joint venture.
• The Procurement Business Number of each member.
• The name of the joint venture, where applicable.
• The representative member, where one has been chosen to act on behalf of the other members.

The same identification requirements appear in the non-competitive requirements instructions.

Signing rules follow from this structure. Under the competitive requirements, the bid and any resulting contract must be signed by all members of the joint venture, unless one member has been appointed to act for all of them.

Joint and several liability for contract performance

When IRCC awards a contract to a joint venture, all members are jointly and severally liable for performance of the resulting contract. The sources also use the term solidarily, which expresses the same obligation. In practice, the Crown can look to any member, and to all members together, for performance. Each member is responsible for the whole contract, not only for its own share of the work. This applies in both the competitive and non-competitive IRCC instructions.

Joint-venture clauses in PSPC supply arrangements

PSPC's solution-based supply arrangement contains a "Joint venture contractor" clause. It requires the contractor to confirm the name of the joint venture and its members.

PSPC's task-based supply arrangement addresses joint-venture eligibility alongside applicable trading-partner requirements. Those provisions cover the place of business of joint-venture members.

What a Joint Venture Agreement means for a supplier bidding on Canadian public contracts

Read the solicitation's instructions and clauses first, because they decide what a joint-venture bid must contain. The sources do not establish a general rule that every Canadian procurement requires a separate Joint Venture Agreement document. They do establish what the bid itself must show.

Before bidding, a joint venture should settle these points:

• Confirm that every member has a Procurement Business Number.
• Agree on the joint venture's name and on whether one member will act as representative.
• Decide who signs the bid and the contract, and whether signing authority has been given to one member.
• Understand that every member carries joint and several liability for the whole contract.
• For supply arrangements, check the joint-venture eligibility and place-of-business provisions.

Settling these points among the members before the closing date keeps the bid compliant and makes each member's obligations clear from the start.