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Construction Development Board

Joint Venture (JV)

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Posted on 2nd June, 2009

October 4, 2007.

CIRCULAR



The 47th Meeting of the Construction Development Board, in its continued effort to streamline the procurement system and curb fronting/collusion in the construction industry, has approved the following rules/criteria with regard to formation of Joint Venture (JV) among national contractors for procurement of works (RGoB Procurement only):

1.      Formation of Joint Venture (JV) shall be allowed only among construction firms/contractors registered with CDB in the same class. 

2.      Construction firms/contractors shall be deemed eligible to form joint venture for bidding for any contract subject to conditions in terms of number of works permitted to be undertaken simultaneously.  Subject to meeting the bid capacity, Contractor shall be allowed to undertake contract not more than the maximum ceiling prescribed by the CDB, irrespective of whether the contract is executed by the firm independently or on JV basis.

3.      For a joint venture to qualify, each of its partners shall meet at least 25 percent of minimum criteria as individual bidder while the lead partner shall meet at least 40 percent. However, either partner can use full turnover from the joint venture contracts for future biddings.

4.      The resources/figures (turnover, liquid asset, manpower, equipment etc.) for each of the partners of a joint venture shall be taken into account/added to determine the Bidder's fulfillment of qualifying criteria.

5.      The prime contractor or the lead partner must have CDB registration for that particular category of work specified in the tender.

6.      A firm/contractor that has one of its ongoing projects completed up to 90% can participate in tendering for new work beyond the maximum allowable number of works it is permitted to undertake simultaneously.  In such a case, supporting documents such as payment certificates, letter from procuring agencies etc. should be submitted along with the bidding document to prove completion of 90% or more. 

7.      Award of work under circumstances such as above require that the balance 10% work is completed satisfactorily prior to new award.  This is to ensure that contractors do not execute work simultaneously beyond the prescribed ceiling at any given point of time.

Therefore, all the procuring agencies and construction firms/contractors concerned are hereby requested to note the above for strict compliance during the procurement of works with immediate effect.

Kinzang Dorji
Zhabtog Lyonpo & Chairman, CDB