A joint bid agreement spells out the terms and conditions by which two companies team up to offer products or services to a single customer.
- Businesses want to pool resources to submit a more competitive bid for a product or service.
- Spelling out the terms and conditions of future work to be performed by two companies jointly.
Many types of businesses involve competitive bidding. Most goods and services purchased by the government must first be subjected to a competitive bidding process to ensure that taxpayer dollars are spent prudently, and many companies request bids from prospective sellers before making large supply or equipment purchases. Construction projects are often bid, as are home repair services.
Bidding is great for the buyer of a product or service, but it can also price small businesses out of the market. In order to pool resources and submit a more competitive bid, businesses who would otherwise be competitors often decide to work together. When this happens, the parties should execute a joint bid agreement to formalize the working relationship and define each business’ respective role in the project.
A joint bid agreement should address the scope of the project, the roles and responsibilities of each partner in the bid, how and in what amount payment will be made, and terms regarding dispute resolution and termination of the agreement in the event the parties find they cannot work together. If you are considering submitting an offer for a project jointly with another company, use this interactive joint bid agreement to create the framework for this limited partnership.