Bidding Together for Public IT Contracts: Consortium, Subcontractor, Partnership

Every year, public authorities award numerous IT contracts: software development, operations, consulting, staffing and infrastructure. For many small and medium-sized IT companies, these contracts would be a good professional fit. Yet they rarely take part. The reasons are well known: high effort for documents and evidence, suitability criteria that a single company cannot fully meet, and the concern of coming away empty-handed after weeks of preparation.The good news: nobody has to tackle public IT contracts alone. Procurement law provides for various forms of cooperation. This article gives an overview of the common models and shows what matters when choosing between them. It is not legal advice: the specific tender documents and the Austrian Federal Procurement Act 2018 always prevail.

Created by Oleksandra Razek

Why joint bids make sense

Public tenders often require a combination of skills, capacity and evidence that a single company can hardly cover. A specialised software provider may have the technical know-how but lack references of the required size. Another company has enough staff but no experience in the public sector.

Together, these gaps can be closed. Partners pool references, expertise and personnel and can therefore take part in procedures that would be out of reach for each of them individually. At the same time, the effort of preparing the bid is shared.

Model 1: Bidding consortium

In a bidding consortium, several companies join forces and submit a joint bid. Towards the contracting authority, they act as a single bidder. If awarded the contract, they perform it together, often in the form of a joint venture.

Key features:

  • All members are bidders and share responsibility towards the contracting authority, usually jointly and severally.
  • Suitability can be demonstrated jointly, although each member must be authorised and reliable for its part of the service.
  • A clear internal agreement on tasks, liability, remuneration and representation is required.

A bidding consortium fits when several partners deliver a substantial part of the service and want to appear jointly.

Model 2: Subcontracting

In the subcontracting model, one company submits the bid and remains the sole contractual partner of the contracting authority. Individual parts of the service are passed on to subcontractors. Depending on the tender, subcontractors must already be named in the bid, and under certain conditions the bidder can rely on their capacities to demonstrate suitability.

Key features:

  • The main contractor bears responsibility towards the contracting authority.
  • Subcontractors must be suitable for their part of the service; commitment declarations are often required.
  • Changing subcontractors later usually requires the consent of the contracting authority.

This model fits when one company wants to take overall responsibility and involves partners specifically for individual parts.

Model 3: Partnership with a specialised service provider

There are also forms of cooperation in which a partner not only contributes services but supports the entire process: from finding suitable tenders through preparation and submission to ongoing support after the award. Legally, this cooperation is also structured via one of the two basic models, but in practice it adds experience with procedures, documents and deadlines.

For companies that are new to the public sector, this can make the entry considerably easier.

Which model fits when?

The choice depends on several factors:

  1. Share of the service: if the partner delivers a substantial part of the service, a bidding consortium is often the better fit. For clearly defined partial services, subcontracting is usually simpler.
  2. Responsibility: who should be accountable to the contracting authority? Do all partners want to be jointly liable, or does one take overall responsibility?
  3. Suitability gap: which criteria are missing, and how can they best be covered?
  4. Requirements of the documents: some tenders restrict subcontracting or set specific requirements for consortia.
  5. Long-term collaboration: should the partnership extend beyond a single procedure?

What makes a good partner bid

Regardless of the model, a few principles apply:

  • Early alignment: partnerships need lead time. Clarify roles, tasks and evidence before the bid deadline gets tight.
  • Clear agreements: liability, remuneration, communication with the contracting authority and conflict resolution should be set out in writing.
  • One point of contact: even with several partners, there should be one clear contact person for the contracting authority.
  • Joint quality assurance: the bid must read as one coherent document, not as a collection of individual contributions.
  • Trust and transparency: especially in consortia, open communication about capacity and risks is crucial.

Common mistakes

  • Looking for partners at the last minute when the deadline is already pressing
  • An unclear division of services that appears contradictory in the bid
  • Missing commitment declarations or evidence from partners
  • No arrangement for what happens if a partner drops out during the contract term

How Suppliance works with partners

For IT tenders, Suppliance works with independent partner companies and their networks: from preparation and submission to ongoing support. We contribute experience with public procedures, access to IT specialists and support with documents and evidence. Our partners contribute their professional expertise and references.

The goal is a collaboration in which each partner contributes what they do best, and nobody carries the effort alone.

An example from practice

A specialised software company with 25 employees wants to bid for a tender for the further development of a line-of-business application. Professionally, the contract is a perfect fit. However, the tender requires a minimum turnover that the company cannot reach alone, as well as capacity for a team of eight people over three years.

Together with a partner, the gap is closed: the software company contributes expertise and references, while the partner adds turnover, experience with public procedures and additional developers. Before submission, roles, shares of the service and responsibilities are agreed in writing. The result is a bid that appears coherent to the contracting authority and is economically viable for both partners, regardless of whether the contract is won on the first attempt.

Frequently asked questions

Do partners have to be named in the bid?

In many procedures, yes, especially if the bidder relies on the partners' capacities or passes on substantial parts of the service. Check the requirements of the documents early so that all declarations are available in time.

Who is liable in a bidding consortium?

As a rule, all members are jointly liable towards the contracting authority. Internally, it should therefore be clearly agreed who delivers which service and how risks and defects are handled.

Is a partnership worthwhile for smaller contracts too?

Yes, especially if it continues across several procedures. The more often partners bid together, the smoother processes, documents and roles become, and the lower the effort per bid.

Conclusion

Public IT contracts are within reach for smaller companies too, provided they choose the right form of cooperation. Bidding consortium, subcontracting or a supported partnership: what matters is an early start, clear agreements and partners who complement each other professionally.

Introduce your expertise to us or send us a specific tender. Together we will check whether and how a joint bid makes sense.

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