AboutChristopher Flett Expertise I can answer all questions regarding negotiation with clients, vendors, partnership deals, co-
venture opportunities, and the like. I can also comment on negotiating salaries, contract
prices, and other financial considerations regarding business.
Experience I have started 11 companies, have negotiated 100's of contracts, from commercial premises to book deals. I work with a clientele on the West Coast that is in negotiations on a weekly basis.
Publications "What Men Don't Tell Women About Business"
Business Week
Entrepreneur Magazine
The New York Times
Chatelaine Magazine
The New York Post
The Washington Post
The Toronto Star
USA Today
The Vancouver Sun
Pink Magazine
Forbes Magazine
The Globe & Mail
The National Post
The Guardian (UK)
CIO Magazine
BC Business Magazine
Education/Credentials Bachelor of Arts (History & Philosophy)
Advanced Marketing Diploma
Provincial Instructors Diploma
Certified International Trade Professional
Past/Present Clients Bank of America
BC Hydro
Key Bank
Deloitte
KPMG
Duke Energy
RBC Dominion Securities
HSBC
TD CanadaTrust
Government of Canada
We have a small construction company and most of our work is with the Federal government. Since we’re certified as a service disabled veteran-owned small business (SDVOSB) we can negotiate directly with the government for set-aside contracts as a prime contractor. Since we have this status; and we’re also minority controlled (51%) we’ve been approached by a another much larger contractor (mechanical) to work together on a Federal project since the GC is looking for minority and veteran participation. This project will be competitively bid to a large GC.
Since we are a small company with limited bonding (performance/payment) capacity we wouldn’t be able to bond this specific project, which is in the $3-$4M range. The contractor who wants to partner with our company said they would provide the bond for the project to help us secure the project, and in doing so naturally they get the mechanical work—which is about 85% of the project. Our company has never done a JV so we’re not certain how the profit should be shared. We don’t know if they should share their actual cost (assuming they would) with us then work the percentage spilt from there, or should we give them a small percentage of our profit on the overall cost of the project. They, of course are marking up their part of the project as they would typically do so they are making money on that “side”, however we’re not sure what would be a reasonable split (if any) after we mark their price up and submit to the GC.
Any advice or suggestion of the type of agreement (we’re thinking JV) or which would be the best win-win for both companies would be greatly appreciated.
Thank you in advance for your help.
Mike
Answer Hi Mike,
You should run this by your company lawyer, but if I were you, I would take my share of the project (15%) and have them put a little something into their side for you as well (5%). Remember that they aren't able to access this project on their own without you and your specific status (minority & veteran). Why not throw it in their court first and ask them to propose an arrangement and see if it fits for you. Remember, you hold the passes to this type of contract. You should get a bit more than you normally would in a straight joint venture. Sorry I can't give you a more concrete answer, but without knowing the scope of work and partner responsibilies for this project, I'm generalizing a bit.
