Sometimes it is in the best interests of an organisation to work with other organisations to reach its goals. Informal arrangements may be adequate for simple projects, but for more complex, long term or funded arrangements a framework for decision making and responsibilities is worth considering.
We work with many organisations who work in a consortium arrangement. Sometimes the organisations come together to make a funding application or bid for a particular project which is then delivered by all of the consortium members.
There are many different structures for a consortia, and we have experience of dealing with:
- Hub and spoke delivery models
- Lead body models; and
- Setting up a special purpose vehicle (SPV) to run the project on behalf of the consortia.
A hub and spoke model assumes a network of providers operating with a single structure, dealing with the management of the relationship between them. They all enter into a partnering or collaboration contract to bind each of the organisations to each other, and every organisation also contracts with the funder or contracting body.
A lead body model assumes that one organisation contracts with the funder or contracting body, and that the lead body then has the relationship with the other organisations. In effect, this creates a number of subcontracts, which help balance the risks and rewards between consortia members.
Sometimes it is more appropriate to create a new entity to contract with the funder or contracting body. A SPV will be a separate legal body that is owned by the consortium members.
Each model has its advantages and disadvantages, depending on the complexity of the arrangements, the level of risk, time constraints etc.
As you would expect, if the consortium is wishing to engage in delivering services to public bodies, then it would also be necessary to consider the Public Contracts Regulations and other relevant legislation.
If you would like to consider consortium frameworks, please contact us.