Building a Consortia

Stephanie DuerdenMarch 2014

What do we mean by consortia?

Definition

A. An association or a combination, as of businesses, financial institutions or investors for the purpose of engaging in a joint venture

B. A co-operative arrangement among groups or institutions

Why do we form consortia?Some examples include:

- Better position ourselves for funding / tender opportunities that require a wider set of skills or expertise

- To gain strength and offer greater stability by teaming up with partners that may be more established and/or have better connections

Benefits of consortiaBeing part of a consortia can offer the following benefits:• Offering services on a scale a

commissioner wants to purchase• Credibility• Shared expertise and experience• Financial security• Business development and expansion• A sustainable role for infrastructure

organisations as the hub of the consortia

Potential pitfalls• Lack of clarity of the purpose, structure and

management arrangements for the consortium

• It’s like a marriage … if your consortium wins the contract, you will be entering into contractual arrangements not just with the other consortium members but also with the public agency that is purchasing service – this means that all of the contractual terms will be enforceable in the courts

Initial things to do to form a consortia …

• Find suitable partners• Identify and agree who will co-ordinate –

there is often only room for one co-ordinator!• Undertake some due diligence on your

partners• Agree aims and ambitions• Develop your relationship with

commissioners to identify what the consortia needs to offer

• Build your consortium strategically rather than for short term / one off goals

Areas to consider when developing consortia

• Are the values of all partners shared, is there a clear purpose?

• Value vs expense – is the effort and expense of instigating and supporting a consortium going to result in real additional value for all those supporting it?

• Technical issues around general governance – which type of model might be most suitable?

• Legal structures – what is the most appropriate structure based on what is wanting to be achieved? (e.g. LLPs, unincorporated associations, shareholding/guarantee companies)

Areas to consider when developing consortia

• Insurance and liability – this needs to be clear!• Culture and ethos• Dynamics – the range, geography of partners – do

they clash, compete or compliment – how will governing documents allow/disallow membership?

• Risk and sensitivity – is the proposed partnership in a field where a high level of confidentiality is required and how is this dealt with?

• How will the development and running of the consortium be financed initially?

Perspective - partners

• Scope – clarity of purpose / vision• Relationship between partners and SPV• Governance arrangements• Non compete clause• Economic model and benefits• Communication

Perspective - commissioners

(Mis)perceptions with consortia that need to be considered and addressed:

• It’s a start up• Limited ability to manage quality• Too many cooks• Who is liable / who do I deal with?

Over to you …..

In groups – consider an opportunity where you may want to form a consortia :

• What benefits would you want to see?• What minimum eligibility should there be for joining

the consortium?• Should there be different levels of membership

e.g. full and associate?• What should organisations reasonably expect from

their membership of the consortium?• How activity involved should consortium members be

in the governance of the consortium?• How will the consortium be co-ordinated?

Feedback• Findings

• Things you will take away and consider

• Things you want to understand more?

• Is it for your organisation to consider?

Contact details

Stephanie DuerdenService Manager - Commissioning (Trusts) & Third Sector Partnership, Warrington Borough Council

Tel: 01925 444263Mob: 07827232579Email: sduerden@warrington.gov.uk