CIDB joint ventures: what to know before you tender together

What the CIDB says about joint-venture grading

The CIDB publishes a joint venture grading designation calculator on its register site. According to the CIDB’s page, the calculator sums the capacity of all the joint venture partners to produce a grading for the joint venture.

Two further points from the same page are worth noting:

Lead partner

The lead partner must hold a registration not lower than one level below the advertised grade, in the relevant class of work. The CIDB’s example is that for an advertised 7GB, the lead partner must be registered at 6GB or higher.

Deemed-to-satisfy combinations

The page includes a table of partner combinations that are treated as meeting a grade, even if the summed capacity calculation falls short. The combinations vary by grade and by which partners hold the relevant class of work.

CIDB guidance generally expects each joint-venture partner to be registered in its own right. Confirm the current position in the CIDB’s guidance before you rely on it for a tender.

Practical points before tendering as a joint venture

• Read the tender notice to see whether joint ventures are allowed, how they must be documented and what evidence of each partner’s registration is required.
• Agree the lead partner early. It affects eligibility and which partner’s details appear first on the documents.
• Check each partner’s class of works, not only the grade.
• Agree who signs, who is responsible for what, and how profit, losses and liabilities are shared.
• Prepare the joint venture agreement and any documents the tender asks for at the time of tender, not after the award.

Insurance questions for joint ventures

A joint venture is a way of sharing a contract, and it also shares insurance questions that a single contractor does not face. These are issues to discuss with an insurer and your own legal adviser.

Who is the insured?

The policy may need to name the joint venture and each of its partners, so that each is covered for the project.

Liability between partners

Joint-venture partners may be jointly and severally liable under the contract or the agreement. Understand how that interacts with each partner’s own policies.

Existing policies

Each partner’s annual policies may not extend to the joint venture project. Check before assuming they do.

Sums insured and limits

Contract works and liability limits are set by reference to the whole project, not by a partner’s share.

Who arranges what

Agree in the joint venture agreement who places insurance and who bears the cost.

Guarantees for joint ventures

If the tender requires a bid bond or the contract requires a performance guarantee, the guarantee provider will normally assess each partner’s financial position, and may require security or indemnities from each of them. Joint ventures can involve more parties and more documents, so start early. A guarantee is never assured and is subject to the provider’s assessment.

Joint venture checklist