Better Roads Staff
• How will the costs of preparing the bid be allocated between the joint-venture partners? Will each party bear its own costs or will it be allocated based upon participation percentages?
• Who will be the joint-venture manager who is responsible for the day-to-day management of the joint venture?
• Who will be the project manager who is responsible for day-to-day construction of the project?
• How will the project be insured? (i.e., each party with separate liability insurance policies) How will Builders Risk Insurance be purchased? Whose insurance agency will be used?
• What are the financial arrangements?
• How will profits and losses be allocated?
• How will initial contributions be determined?
• How will additional capital contributions be handled? (For example, is a unanimous vote required?)
• What if a party fails to make additional contributions?
• How will reimbursements be handled?
• How will cash disbursements be made?
• How will disputes be handled?
Brian Moore is a principal with construction industry management consultants FMI Corporation, focusing on strategic, organizational and operational issues. Contact at (919)785-9269 or email@example.com.
Go to our digital edition at betterroads.com to read (page 33a) about a contractor (actually Equipment World magazine’s Contractor of the Year) who started a new business to get through the recession.