Consortia, subcontractors and borrowed capacity: bidding for what you cannot deliver alone

The selection criteria in a tender are minimums, not preferences: three references of a certain size, a turnover of twice the contract value, a certification you do not hold. Miss one and your bid is not read. EU procurement law gives you three ways to clear a bar you cannot clear alone, and most bidders use none of them.

This guide explains the three routes, what they cost, and how buyers check them.

Route one: rely on another company's capacity

Article 63 of Directive 2014/24/EU lets a bidder rely on the capacities of other entities to meet economic, financial, technical or professional selection criteria, "regardless of the legal nature of the links" between them. In plain terms: a parent company's turnover, a partner's references or a specialist's staff can count as yours.

Two conditions:

• You must prove the resources will actually be available. A written commitment from the other company is the usual evidence. Buyers often provide a form; if not, a signed letter naming the contract, the resources and the duration works.
• The other company must itself pass the exclusion test. It fills in its own ESPD. If it fails a mandatory exclusion ground, the buyer must require you to replace it; for a discretionary ground, the buyer may.

Two limits:

• For educational and professional qualifications or professional experience, you may rely on another entity only if that entity will actually perform the work the qualification is for. You cannot borrow an engineer's CV and then have someone else do the engineering.
• For financial standing, the buyer may require the two of you to be jointly liable for performance. Read the documents: this turns a reference letter into a real commitment.

Reliance is the cheapest route. Nothing changes in your legal structure; you bid, you sign, you deliver, and the supporting company stands behind a specific gap.

Route two: bid as a consortium

Article 19(2) says buyers may not require a group of economic operators to take a particular legal form in order to bid. Two or more companies can submit one tender together, as a consortium, joint venture or temporary association, without founding anything first. The buyer may require a specific legal form only after the award, and only if it is necessary to perform the contract.

What a consortium changes:

• Capacity is pooled. The group's turnover, references and staff are assessed together, under rules the buyer must state (some require each member to meet part of a criterion; some accept any combination).
• Every member fills in an ESPD ESPD The European Single Procurement Document: a self-declaration that replaces certificates at the bidding stage. Full entry and passes the exclusion test.
• Liability is usually joint and several. Each member can be held for the whole contract. Choose partners you would trust with your own signature, because legally you are.
• A lead member represents the group. Buyers want one counterpart; the consortium agreement names it.

The consortium agreement is a private contract among the members. Before you bid, agree in writing on the split of work, the split of money, who leads, who signs, what happens if a member fails, and how disputes are settled. Groups that skip this step at bid stage renegotiate it under pressure at award stage, which is when partnerships break.

Consortia suit contracts that genuinely need two skill sets, works that need two trades, and cross-border bids where a local partner knows the national rules and the buyer. They do not suit a bid where one company does 90 percent of the work; that is subcontracting with extra liability.

Route three: subcontract

You bid alone, sign alone and deliver part of the work through subcontractors. Article 71 sets the frame:

• The buyer may ask you to state in your tender which share you intend to subcontract and to name the proposed subcontractors. Many do, and the answer becomes part of the contract.
• The buyer may verify whether subcontractors fall under an exclusion ground; it then must have one replaced on a mandatory ground and may on a discretionary one.
• National law may allow or require direct payment to subcontractors by the buyer, and may limit the share that can be subcontracted for some contract types.
• The main contractor remains fully responsible for performance, whatever the subcontractors do.

Subcontracting keeps you in control and keeps the reference in your name. Its cost is that subcontractor capacity cannot be used to meet your selection criteria unless you also invoke Article 63 for that subcontractor, with its commitment letter. Bidders are often surprised that naming a subcontractor is not the same as relying on its references; it takes both.

Choosing the route

Your gap	Cheapest route
Turnover or insurance level	Reliance on a parent or partner
One specialist reference	Reliance, with the specialist performing that part
A trade or skill you do not have	Subcontract, with reliance if the criteria need it
Half the work is outside your field	Consortium
A country you do not know	Consortium with a local partner

Whatever the route, the evaluation committee reads one thing above all: does this team hold together? Commitment letters that name the contract, a consortium agreement that exists before the bid, subcontractors who are identified rather than "to be confirmed". Vagueness here is the most common reason a technically strong bid loses points on the delivery plan.

What the consortium agreement must settle

Write it before the bid, sign it before the bid, and cover at least these points:

1. The lead member and the powers it holds: to sign the tender, to correspond with the buyer, to receive payment, to sign the contract.
2. The split of work, by lot or task, in enough detail that the buyer's delivery plan and the internal agreement say the same thing.
3. The split of money, including how the buyer's payments are passed through, within how many days, and who carries retention or performance bonds.
4. Liability between members. The buyer will hold you jointly and severally liable; the agreement decides how a claim is shared internally, and whether one member's failure can be charged back to it.
5. Bid costs, shared or borne by the lead.
6. Exclusivity: whether a member may also bid for the same contract in another team. Most agreements forbid it.
7. Exit and replacement: what happens if a member becomes insolvent, withdraws or is excluded, and whether the others may find a substitute.
8. Confidentiality of each member's prices and methods, during the bid and after.
9. Decision-making and disputes: who decides on a change request from the buyer, and which court or arbitration settles a disagreement.

An agreement of two pages that answers these questions beats a twenty-page template that does not.

Two traps

The disappearing partner. A relied-upon company or consortium member that withdraws between bid and award puts the whole tender at risk. Buyers may allow replacement in limited cases; many do not. Get commitments in writing from people with authority to give them, and keep them informed of the timeline.

Hidden incumbency. A subcontractor that is also bidding for the same contract, alone or with someone else, creates a conflict that buyers may treat as collusion. Ask before you sign them up.

Using the public record

Consortium and subcontracting arrangements leave traces. Award notices name every member of a winning group and often state the subcontracted share. Reading a year of awards in your sector tells you who teams with whom, which is the fastest way to find a partner who already knows how to win.