What’s in a name? A look at the who, what and why of forming a joint venture partnership

"There’s a bit of confusion and misinformation in the tunneling and underground construction industry regarding contractor joint ventures. If it was all so clear I would not have been "asked" to write this article. For those of us on the contractors’ side of the fence, joint venture business relationships have been a part of life for a long time. But even for contractors, there can be a bit of confusion, and it normally begins on bid day.How often have you received bid results and wondered (out loud, usually), "Who the hell are the Lake Mead Intake Constructors"? or the "Regional Connector Constructors"? Once you get past the name, you see that there is nothing behind Oz’s curtain other than a couple of contractors bidding and building work in an attempt to make a profit. So take a few minutes to read the rest of this, and I’ll do my best to dispel a few mythWhat is a joint venture?In some form or fashion, joint ventures are as old as industry itself. In the United States, some of the earliest (and largest) joint ventures involved the railroads and oil companies in the late 1800s. In the United States’ underground construction industry, joint venture names such as, Healy-Greenfield, Green and Winston, Gates & Fox and Walsh, Shea-Ball, Kenny-Paschen and S&M-Traylor bring back memories of successful joint ventures that operated over many projects.There are nearly as many definitions for joint ventures (JVs) as there are attorneys. A short and simple definition is, "an association of two or more companies engaged in a singular, for-profit business enterprise without actual partnership or incorporation." That’s it. Two or more contractors decide to partner up for one or more projects. One benefit of the JV relationship is that the partners typically do not need to file incorporation documents, or articles of organization within the state where they intend to operate. So it is a relatively easy business arrangement to pull together. Other benefits of the JV arrangement include: • Oportunities to gain new expertise and capacity.• The ability for firms to move into new geographic markets.• JV agreements are not long-term commitments.• Sharing of financial support for a project.• Sharing of financial risks within a project. between the partners.• Can complicate dispute resolutions with the owner and between partners"