Construction consortium
A consortium is a group of companies or other entities that come together to undertake one or more specific construction projects. They collaborate by pooling their resources, expertise, and capabilities, typically to deliver complex or large-scale projects that might be beyond the capacity of a single organisation. A consortium is formed to leverage the strengths of each member and is often used in large infrastructure projects, such as highways, railways, airports, and large public works, where multidisciplinary expertise and substantial resources are required. Forming a consortium allows companies to share resources and expertise, mitigate individual risks, and improve their chances of successfully delivering large and complex projects.
The members of a consortium share both the risks and the rewards associated with the project. This can include sharing costs, liabilities, and profits based on the terms agreed upon in the consortium agreement. Once the project is completed, the consortium may be dissolved, or its members might choose to collaborate on future projects.
A consortium can include a variety of participants such as construction companies, engineering firms, architects, financial institutions, and specialised subcontractors. This diversity allows the consortium to tackle different aspects of the project effectively. The collaboration is governed by a consortium agreement, which outlines the roles, responsibilities, contributions, and shares of each member. It also details how decisions are made, how profits and losses are distributed, and how disputes are resolved.
The legal structure of a consortium can vary. It can be a joint venture, a partnership, or another form of legal entity, depending on the preferences of the members and the requirements of the project.
The Code of Estimating Practice, seventh edition, published by the Chartered Institute of Building (CIOB) in 2009 suggests that a consortium is:
The group of private sector participants who have come together for the purposes of tendering for a private finance initiative (PFI) contract. Also becomes a Special Purpose Company (SPC) or Special Purpose Vehicle (SPV). The generic term is project company, which is established by the preferred tenderer and is the contracting party for the project. |
NB Glossary of procurement terminology, A guide for suppliers, Published by the London Borough of Richmond upon Thames in April 2012, defines a consortium as: ‘An unincorporated group of firms or individuals, often formed to tender for a contract with a view to forming a company or working in some other way in the event of winning.’
[edit] Related articles on Designing Buildings
- Business model.
- Cartel.
- CIOB.
- Collusion.
- Company acquisitions in construction.
- Competition.
- Construction organisation design.
- Construction organisations and strategy.
- Contractor.
- Integrated project delivery (IPD).
- Joint venture.
- Partnering and joint ventures.
- Partnership.
- Private finance initiative
- Procurement.
- Special purpose vehicle.
- Types of construction organisations.
Featured articles and news
Ebenezer Howard: inventor of the garden city. Book review.
The Grenfell Tower fire, eight years on
A time to pause and reflect as Dubai tower block fire reported just before anniversary.
Airtightness Topic Guide BSRIA TG 27/2025
Explaining the basics of airtightness, what it is, why it's important, when it's required and how it's carried out.
Construction contract awards hit lowest point of 2025
Plummeting for second consecutive month, intensifying concerns for housing and infrastructure goals.
Understanding Mental Health in the Built Environment 2025
Examining the state of mental health in construction, shedding light on levels of stress, anxiety and depression.
The benefits of engaging with insulation manufacturers
When considering ground floor constructions.
Lighting Industry endorses Blueprint for Electrification
The Lighting Industry Association fully supports the ECA Blueprint as a timely, urgent call to action.
BSRIA Sentinel Clerk of Works Training Case Study
Strengthening expertise to enhance service delivery with integrated cutting-edge industry knowledge.
Impact report from the Supply Chain Sustainability School
Free sustainability skills, training and support delivered to thousands of UK companies to help cut carbon.
The Building Safety Forum at the Installershow 2025
With speakers confirmed for 24 June as part of Building Safety Week.
The UK’s largest air pollution campaign.
Future Homes Standard, now includes solar, but what else?
Will the new standard, due to in the Autumn, go far enough in terms of performance ?
BSRIA Briefing: Cleaner Air, Better tomorrow
A look back at issues relating to inside and outside air quality, discussed during the BSRIA briefing in 2023.
Restoring Abbotsford's hothouse
Bringing the writer Walter Scott's garden to life.
Reflections on the spending review with CIAT.
Retired firefighter cycles world to raise Grenfell funds
Leaving on 14 June 2025 Stephen will raise money for youth and schools through the Grenfell Foundation.
Key points for construction at a glance with industry reactions.