Consortium Bids and Subcontracting

Not every contract is within reach of a single organisation. When a public sector tender requires capabilities, capacity, or geographic coverage that your business cannot provide alone, you have two main options: form a consortium (bid jointly with other organisations) or subcontract (bid as the prime contractor and bring in partners to deliver specific elements).

Common reasons to use these approaches include: the contract requires multiple specialisms (e.g. IT and training), the geographic scope exceeds your delivery capability, the contract value is too large for your financial standing alone, or the buyer has asked for diverse supply chain participation.

The Procurement Act 2023 explicitly encourages collaborative approaches and prohibits contracting authorities from unreasonably restricting the use of subcontractors or consortium arrangements.

Consortium (joint bid): Two or more organisations bid together as a single entity. They are jointly responsible for delivering the contract. This usually requires a formal consortium agreement that sets out each partner's responsibilities, liabilities, and share of the contract value. The consortium members may form a special purpose vehicle (SPV) or simply rely on a contractual agreement.

Subcontracting: One organisation bids as the prime contractor and takes full contractual responsibility. They bring in subcontractors to deliver specific elements. The prime is accountable to the buyer for the entire contract, including the subcontracted elements. Subcontractors have a commercial relationship with the prime, not with the buyer.

Key differences: in a consortium, liability is shared; in subcontracting, the prime bears full liability. Consortia require more complex governance but offer more equal partnerships. Subcontracting is simpler to set up but places more risk on the prime contractor.

Whether you choose a consortium or subcontracting approach, the structure should be agreed before you start writing the bid:

• Roles and responsibilities: Define clearly who does what, including delivery, reporting, and quality assurance
• Financial split: Agree how the contract value is divided, including payment terms between partners
• Liability: Determine how liability is shared. In a consortium, this is typically joint and several (each partner is liable for the whole)
• Governance: Agree how decisions are made, how disputes are resolved, and who the buyer's main point of contact is
• Exit provisions: Define what happens if a partner needs to withdraw during the contract

Put the agreement in writing before submitting the bid. A handshake agreement is not sufficient — formal documentation protects all parties and demonstrates professionalism to the buyer.

When submitting a consortium or subcontracted bid, pay attention to these practical requirements:

• Declare the arrangement. Most tenders require you to state upfront whether you are bidding as a consortium or intending to subcontract. Be transparent about the structure.
• Selection criteria. In a consortium, each member may need to meet certain selection criteria. In a subcontracting arrangement, the prime must meet all criteria; the subcontractor's credentials support the overall bid but don't substitute for the prime's.
• Demonstrate collaboration. Show the buyer how the partnership works in practice — shared project management, communication plans, escalation procedures.
• Evidence previous collaboration. If you have worked together on previous contracts, include the evidence. It demonstrates a lower risk for the buyer.
• Address the buyer's concerns. Buyers worry about coordination risk in multi-partner arrangements. Proactively address how you will manage handoffs, quality, and reporting across partners.

Our Bid Compliance Checklist tool includes items specific to consortium and subcontracting arrangements. Use it to verify your submission is complete.