What Is a Joint Bond?

Consortium bidding means that two or more legal persons or other organizations can form a consortium and jointly bid as one bidder. In practice, large and complex projects have relatively high capital and technical requirements, which cannot be successfully completed by the strength of one bidder alone, and can join several companies to concentrate their respective advantages to participate in the bidding as one bidder. The members of the consortium are relatively loose and independent units. If the legal or bidding documents require qualifications of bidders, all parties in the consortium should have the corresponding qualifications and cannot replace each other. ^[1]

Consortium bid

The so-called consortium bidding refers to the act of forming a consortium by two or more legal persons or other organizations and jointly bidding as one bidder. For the consortium bidding can be understood as follows:

1. The parties contracted by the consortium are legal persons or organizations other than legal persons. The form can be a combination of two or more legal persons, a combination of two or more unincorporated organizations, or a combination of legal persons and other organizations.

2. The consortium is a temporary organization and does not have legal personality. The purpose of forming a consortium is to enhance the competitiveness of bidding, reduce the financial burden on all parties in the consortium due to the payment of huge performance bonds, disperse the bidding risks of the parties in the consortium, make up for the relative insufficiency of the technical strength of the parties involved, and improve the joint commitment Reliability of project completion. If it is a legal entity such as a "joint venture company" that is jointly registered and carries out long-term business activities, it does not belong to the legal entity referred to in the Tendering and Bidding Law.

3. The composition of the consortium is "may be formed" or not. Whether to form a consortium is up to the parties to the consortium themselves. There are corresponding provisions in Article 31, paragraph 4, of the Tendering and Bidding Law. This shows that the formation of the consortium is a common and consistent legal act of the parties.

4. The consortium "joints bidding as a bidder". In other words, although the consortium is not a legal person organization, external bidding should be conducted in the common name of all parties forming the consortium, and not in the name of one or two entities (in the case of multiple entities). That is, "all parties in the Commonwealth" "jointly sign a contract with the tenderer". What needs to be explained here is that the issues of rights, obligations, and responsibilities within the consortium need to be based on contracts entered into by the parties to the consortium.

5. The parties to the consortium who jointly bid for the consortium shall have certain conditions. For example, according to the "Tendering and Bidding Law", all parties to the consortium should have the corresponding ability to undertake the bidding project; if the relevant state regulations or bidding documents have stipulated the qualifications of bidders, all parties to the consortium should have the required corresponding Eligibility conditions.

6. The joint bidding of the consortium is generally applicable to large-scale construction projects and construction projects with complex structures. There are similar provisions in Article 27 of the Building Law.

All parties to the consortium shall have the qualifications required by this law or the state and the corresponding ability to undertake bidding projects. This is a requirement for the qualifications of the bidders. (1) All parties in the consortium shall have the necessary conditions to undertake the bidding project, such as corresponding human, material and financial resources. (2) If the state or bidding documents have special requirements for the qualifications of bidders, each member of the consortium shall have the corresponding qualifications. (3) For a consortium composed of units of the same specialty, the qualification level of the consortium shall be determined according to the unit with a lower qualification level. For example, in a consortium composed of three bidders, two of which are Grade A qualifications and one is Grade B, the consortium can only be designated as Grade B. The reason for this provision is to promote the formation of a consortium of highly qualified bidders, to prevent the completion of the goods or contractors, and to ensure the quality of bidding.

At present, the globalization of the market economy is getting higher and higher, and the scale of government procurement is getting larger and larger, especially the scale of government procurement engineering construction projects is getting larger and larger, and the requirements for professional and technical levels are getting higher and higher. , Participating in government procurement tenders in the name of the consortium, becoming a way to fill gaps in corporate resources and technology, improve corporate competitiveness, and decentralize and reduce

Consortium Tender Agreement

Company A (full name):

full name of company):

Ding Company (full name):

The parties to this agreement follow the principles of equality, willingness, fairness, and good faith, and are willing to form a consortium to implement and complete the contents of the contract. This agreement is concluded with regard to the following related matters.

1. (name of company A) is the sponsor of the consortium, (... company name), (name of the company) are members of the consortium;

2. The relevant matters within the Commonwealth are as follows:

2.1 The consortium is responsible for communicating with the contractor;

2.2 All work of the contract project is organized by the organizer of the consortium, and the parties of the consortium will implement it according to the internal division ratio;

2.3 The consortium will strictly implement all contract documents in strict accordance with the requirements of the bidding documents, jointly assume all the obligations and responsibilities agreed in the contract, and at the same time bear its own responsibilities and risks according to the internally divided duties;

2.4 The consortium is responsible for the survey and design of this project according to the following divisions of labor:

Where the host (name of company A) undertakes the project, members of the consortium (... company name), (name of company D) each undertake this project, ...,;

2.5 The related costs of the consortium during the implementation of the contract are allocated according to their respective workload.

3. The consortium sponsor shall send each of this agreement to the contractor;

4. This agreement takes effect from the date of signing until the parties have performed

The complexity of the bidding project is the realistic basis for forming a bidding consortium. In modern socio-economic life, some engineering construction projects are huge in scale and involve a wide range of science and technology and their applications. The successful completion of the construction of such projects often requires close cooperation and complementary advantages of multiple strong legal persons or other organizations with their respective strengths. Modern social division of labor is becoming more and more sophisticated. Although some group companies have a very wide business scope, they often have comparative advantages only in a certain field. For large and complex engineering construction projects, these group companies are generally unable to complete successfully. Therefore, the formation of a bidding consortium by several legal persons or other organizations with different competitive advantages in different fields is not only an inevitable choice for their successful bidding for large and complex engineering construction projects, but also a realistic need to successfully complete such projects.

In the bidding for large-scale construction projects in China, many bidders are bidding consortia. For example, Guangxi Laibin B Power Plant BOT project with investment and financing scale of hundreds of millions of dollars, 5 of the 6 bidders are bidding consortiums. They are: China Electric Power Consortium, which is composed of Hong Kong China Power Corporation and Germany's Siemens; Cotton consortium, which is a combination of the Tohmu Corporation of Japan, Singapore Energy International, and the Thai Enterprise Alliance Energy Corporation; the British Electricity Consortium, which is composed of the British Electric Power Corporation and Japan's Mitsui & Co.

The actual needs have promoted the relevant provisions of the law. The legal basis for joint bidding in China to form a bidding consortium is "

The bidding consortium established for the bidding and tendering of large and complex engineering construction projects has distinctive characteristics in terms of existence. First, its establishment has a clear purpose. After learning about large-scale engineering construction projects,

Become the lead unit (also called the responsible unit) of the bidding consortium may be: 1. Compared with other members of the bidding consortium, the legal person or other organization that has obvious advantages in financial strength, technical equipment and other aspects. Generally, This lead unit undertakes the main part or key part of the bidding project; 2. In the case where the human, material and financial resources of the members of the bidding consortium are similar, the lead unit may be a legal person or other person who undertakes a larger part of the bidding project. Organization; 3. The lead unit is the sponsor or convener.

No matter what kind of legal person or other organization becomes the lead unit, it is the key to clarify its rights and obligations. However, the specific rights and obligations of the lead unit cannot be uniformly stipulated by law because of the wide differences between the bidding projects and the parties to the bidding union. The determination of its content depends on the autonomy, equality and mutual benefit between the parties to the bidding union Negotiation and negotiation on the basis of specific bidding projects. However, under normal circumstances, the lead unit may enjoy the following rights: First, the main organization and management rights. Such rights may be exercised in several ways, such as the direct exercise of the organization and management rights of other members by the lead unit on the bidding project, or through the establishment of a specialized organization and management organization based on the provisions of the joint bidding agreement (Such as the project leadership team). Communication and coordination rights. This includes both communication and coordination with the tenderer, as well as communication and coordination with members within the bidding consortium. Third, the right to income. This means that the lead unit is inferior to other organizations due to its organization, management, communication, and coordination.

The following issues should be noted:

1) The consortium jointly bids as a bidder. If the consortium wins the bid, the parties to the consortium shall jointly sign a contract with the bidder and assume joint and several liability to the bidder for the winning project.

2) Forming a consortium bid is a voluntary act of the parties to the consortium.

3) After the parties to the consortium sign a joint bidding agreement, they may no longer bid separately in their own name, nor may they form a new consortium or participate in other consortia to bid on the same project. ^[2]

As the consortium is a temporary loose combination, the members of the consortium may change during the bidding process. Generally, the change of the members of the consortium must be agreed by the tenderer before the deadline for bidding. If the change of the members of the consortium occurs after passing the pre-qualification, the qualifications of the changed consortium need to be reviewed.

(1) Project construction bidding project

(2) Project tenders for construction goods

(3) Project survey and design bidding project

(4) Other types of bidding projects ^[3]