Building a Consortia Stephanie Duerden March 2014

1. Building a ConsortiaStephanie DuerdenMarch 2014

2. What do we mean by consortia? Definition An association or a combination, as of businesses, financial institutions or investors for the purpose of engaging in a joint venture A co-operative arrangement among groups or institutions

3. 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 partnersthat may be more established and/orhave better connections

4. Benefits of consortia Being 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

5. 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

6. 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

7. 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)

8. 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?

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

10. 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?

11. Over to you …..

12. 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?

13. Feedback • Findings • Things you will take away and consider • Things you want to understand more? • Is it for your organisation to consider?

14. Contact detailsStephanie DuerdenService Manager - Commissioning (Trusts) & Third Sector Partnership, Warrington Borough CouncilTel: 01925 444263Mob: 07827232579Email: sduerden@warrington.gov.uk