Guide To Business Collaborative Contracting

Major Projects Ready
A Guide to Business
Collaborative
Contracting
INFORMED / CONNECTED / COMPETITIVE / SUSTAINABLE

MAJOR PROJECTS READY – A GUIDE TO BUSINESS COLLABORATIVE CONTRACTING FOR SERVICES INDUSTRIES AND SMALL BUSINESS
Contents
01 Introduction P3
What is a Business Collaboration? P3
02 Forming a Business Collaboration P4
Step 1 – Identify the Opportunity P5
Step 2 – Analyse Capabilities to Meet the Opportunity P6
Step 3 – Identify Suitable Collaboration Partners P8
Step 4 – Identifying and Agreeing a Suitable Collaboration Model P 12
Step 5 – Collaboration Governance Design and Management P 13
Step 6 – Formalise the Collaboration P 15
Step 7 – Collaboration Termination P 16
03 Legal Options P 17
04 Appendix A – Sample Memorandum of Understanding P 25
05 Appendix B – Sample Non-Disclosure Agreement P 33
06 Notes P 39
P2 DEPARTMENT FOR MANUFACTURING, INNOVATION, TRADE, RESOURCES AND ENERGY

01 Introduction
The purpose of this workbook is to provide small business owners and operators with the following:
• An understanding of what is involved in a business collaboration and collaborative contracting
• When and why such collaboration is useful to your business
• Steps required to implement collaborative contracting that meets your business needs
This workbook is designed to be read by an individual enterprise or a by a group of business
owner/operators interested in working collaboratively together to win or undertake work.
What is a Business Collaboration?

A Business Collaboration is an agreement between firms to do business together in ways that
go beyond normal company-to-company dealings, but fall short of a merger or a full partnership.
Or, more simply put, collaborations are agreements to work together in some fashion toward a
common goal, project and organisational objectives. These collaborations range from informal
“handshake” agreements to formal agreements with lengthy contracts in which the parties may
also exchange equity, or contribute capital to form a joint venture.
A business collaboration is a way for small businesses to expand their client base and tap into new
markets by partnering with other organisations to address skill or resource gaps, allowing them to
bid for a wider range of work or for larger projects.
For many small businesses, collaborations are a way to stay competitive in today’s technologically
advanced, ever-changing business world. These collaborations allow small businesses to pursue
markets, customers, or ventures they could not do themselves. Many large companies are also
creating business collaborations with those small businesses that can bring some critical
expertise, product or service, technology, and/or market access that is outside the larger
company’s core competencies.
These trends will positively impact those small businesses willing and able to change and work with
other businesses and will negatively impact those who do not understand the rules of the game.
These organisations also need to be adaptable and open to change given that these collaborative
arrangements require a flexible approach to delivering outcomes.
P3
02 Forming a Business Collaboration

The major elements of a Business Collaboration are presented below:
• A Business Collaboration brings two or more individual organisations together.
• A Business Collaboration requires these parties to be interconnected in some way with resource
dependencies with both parties benefiting from sharing these resources.
• The collaboration must share consistent goals, interests, or values.
• There is an assumption that the individual parties maintain at least some level of autonomy and
continue operating their normal business activities alongside the collaborative business activities.
Accordingly, business collaborations represent arrangements that have emerged or have been
purposefully established to leverage the partners’ resources and capabilities so that their strategic
performance can be enhanced and the client is provided additional value due to the parties coming
together. Beyond the partners’ contributions of resources and capabilities, collaborations involve
governance structures and commercial arrangements that facilitate collaborative interaction
among partners.
Below is a typical process a group of parties would undertake when forming a business collaboration:
1 Identify the opportunity
2 Analyse capabilities to meet the opportunity
3 Identify suitable collaboration partners
4 Identifying a suitable collaboration model
Establish relevant collaboration governance

5 and management requirements
6 Formalise the collaboration (if required)
7 Collaboration assessment and termination

Step 1 – Identify the Opportunity
Businesses may enter into a collaborative arrangement for a number of different reasons which
may include:
• Gaining entry to specific or new markets;
• Delivering innovative new technologies or processes;
• Reducing financial risk of research & development;
• An identified client need for partners to come together to deliver a project;
• Allowing pursuit of broader or larger scopes of work;
• Achieving competitive advantage.
Entering New Markets

Partnering with a company can make the expansion into unfamiliar territory a lot easier and less
stressful for a company. Research has identified growth strategies and entering new markets
as among the top reason for forming strategic collaborations. Therefore, forming a Business
Collaboration with a company already in a target marketplace is a very appealing strategy to enter
in to a new supply chain, major project or market.
Delivering Innovative New Technologies or Processes

Not all companies can provide the level of innovation or technology that they need to effectively
compete on their own. By pooling resources to jointly deliver innovative technologies, all partners
receive benefit from the collaboration.
Another reason for forming strategic collaborations is to outsource business functions to a company
which can do it better and lower costs. This can include: marketing, production, accounting, sales,
or virtually any other process. Indeed, many companies are forming collaborations looking for the
best quality or technology, or the cheapest labour or production costs.
Reducing Financial Risk of Research & Development

To help maintain innovation, some companies may find that the financial risk involved in developing
a new product or production method is too great to undertake alone. In such cases, two or more
companies may agree to spread the risk between all of them.
An Identified Client Need for Partners to Come Together

There may be instances where companies are requested by a client to work together in a collaborative
contract. For example, a design and construct project in which the client tenders for the package may
involve a design firm finding a construction firm they can partner with to deliver the works.
Allowing Pursuit of Broader Scopes of Work

Partnering with another organisation may allow businesses the opportunity to pursue larger or more
complex projects. In particular, it allows specific skills or resource shortages of one business to be
filled by collaborating with another business.
P5

Achieving Competitive Advantage
Small businesses can compete against larger firms by creating collaborations with other companies,
both large and small, on a project-by-project basis. This can be strategic in both removing some of the
competition and bolstering skills and capabilities.
In any event, the first step is in identifying whether an opportunity exists in which a Business
Collaboration may ultimately lead to increasing chances of a successful outcome.
Step 2 – Analyse Capabilities to Meet the Opportunity

In most sectors of procurement, competitive bidding is the norm for all except small, low-value and
low-risk assignments.
Identifying Strengths and Weaknesses

An analysis of your business’s strengths and weaknesses allows you to identify what gaps you have in
meeting the requirements of the opportunity. This gap analysis will also give you the search criteria for
identifying one or more strategic partners for the immediate and long term opportunities identified.
Match the bid to the opportunity

It is important that businesses look at the bidding process from the client’s perspective. The Client
sees the purpose of the bidding process as a way identify accurately and reliably the contractor
most likely to deliver the best value and achieve the best results. A bid from a business that clearly
understands this perspective is more likely to succeed than one presenting only the contractor’s
point of view.
The bid response has to show that the bidding business:
• Thought hard about the client’s requirements,
• Interpreted them accurately,
• Developed the bid specifically for that opportunity, and
• Exercised care in its preparation, and that it was not just patched together using copy and
paste commands.
There is little point in submitting a bid unless it has distinctive benefits to offer the client. The bid must
demonstrate that it is competitive as possible in terms of both technical quality and value for money.

Determining Spare Capacity
After careful analysis of the opportunity, you should be able to determine if you have “spare capacity”
in your existing operation to meet the new opportunity. If don’t have this capability or capacity, do you
need to obtain capacity from outside your business? It is important that you don’t over extend your
capacity so that you cannot supply to your existing customers. It is no use going through all the effort
of undertaking new opportunities at the cost of servicing existing customers.
Identifying your businesses gaps both in terms of skills and resource capacity will allow you to:
• Determine whether you should pursue this opportunity
• Determine whether this opportunity lends itself to partnering, and if so, what skills/capacity you
need in a potential partner
EXISTING
Majority of Capacity CUSTOMERS
PRODUCTION
NEW
Spare Capacity CUSTOMER
P7

Step 3 – Identify Suitable Collaboration Partners
The search criteria for partners should include businesses with compatible cultures, shared values
and long term interests. The time spent searching for compatible parties reduces possible future
conflict within the collaboration. Collaboration partners are likely to be competitor(s) or suppliers
who are interested in expanding into this new market or sector which you could jointly bid for the
immediate and long term opportunities identified. Partners should bring knowledge, patents,
proprietary knowledge, process, capital, workforce skills or other expertise that you do not have.
Are all the partners of a similar size and capability?

Collaborations between firms of different sizes are often justifiable as the smaller firm may share
its innovative technology with a larger firm that is offering finance, marketing, distribution etc. Care
should be taken however in ensuring that the larger partner does not dominate the collaboration
to the detriment of the smaller collaboration partner. The smaller collaboration partner must also
consider the risk of over commitment to one project. It should also be noted that business size does
not necessarily dictate the lead party for a particular assignment. Dependent on the job and skills
required, it could be a smaller company leading a business collaboration with a larger firm.
Risks when Forming a Business Collaboration

A suitable collaboration model will depend greatly on the degree of risk which the partners are
prepared to undertake. This acceptance of risk will also depend on the rewards on offer from the
identified opportunity.
Preliminary discussions should explain in detail each partner’s commitment in terms of resources,
time, and energy. Each partner should know exactly what it needs to do. A good idea may be that the
partners working together on small projects first to learn more about each other before committing
too many resources (time and money).
Also, think about the benefits and attributes you bring to a relationship and then consider what
characteristics and strengths you’d like in an ally. Seek out candidates that match or come close
to that desired profile. Identify what’s in it for your partner before you try to develop a collaboration.
If you help your partner get what they need, they’ll help you get what you need.
A values and culture fit is critical for a Business Collaboration partner. Even if you have gaps in
capability, if there is not a similar approach to undertaking business, shared values in how you work
and a one team approach, even the best intentioned collaborative arrangements will not be effective.
This focus on values and culture is critical as part of the selection of any collaboration partner.
Disclosure
There is a natural tendency to be guarded about what resources, information and processes
prospective collaboration partners are prepared to share. Partners must decide at the very beginning
what that are prepared to share and what they will not share. Prospective partners may need to
be prepared to share financial information, market knowledge, production processes, supplier
information, existing and future intellectual property etc.
If the parties are concerned about the disclosure of confidential information it is recommended that
a Non-Disclosure Agreement is entered into. A sample Non-Disclosure Agreement can be found in
Appendix B.

Research has shown that between 50% and 70% of all business collaborations fail. The following is
short list in order of importance of the reasons why business collaborations have failed and possible
ways of preventing these failures:
Reason for Failure Possible Solution
Clash of cultures and Spend time before setting up the collaboration with leaders from the
“incompatible personal prospective partner business. Understand what their drivers are, what
chemistry”. is important to them and what their vision is. This will give a good idea
upfront as to whether this is a good prospective collaboration partner
Note: Cultural problems
or not.
can consist of language
differences, clash of egos
Identify what united leadership looks like for the collaborative
and different attitudes
arrangement. Spend time identifying where there are differences
to business.
in your approach to clients, projects and pursuits.
Being clear upfront about who is responsible for what and how the
collaboration intends to operate will also help to reduce likelihood
of potential clashes.
Once in a Business Collaboration, if these issues arise, try to empathise

with prospective partners. Empathy means directly identifying with
another’s situation, feelings and motives. Empathy can be a powerful
ally when trying to sway someone toward your way of thinking.
To deepen your level of empathy and increase the likelihood of creating

a great strategic collaboration, start by learning all you can about the
collaboration firms and their current challenges.
Lack of trust Building trust is the most important and yet most difficult aspect
of a successful collaboration.
Ensure that the collaboration is fair on all parties of the collaboration.
Work through the risk allocation up front between the two parties.
Where risks are to be shared, ensure this is clear and also ensure
those risks that are allocated to each party are documented and
appropriately managed
Be transparent about your work in regards to the particular job you are
collaborating on.
Spend time upfront to get to know each other and agree on how things
will be undertaken.
Continued ...
P9

... Continued
Reason for Failure Possible Solution
Lack of clear goals The collaboration partners must know what they want to achieve
and objectives and be clear about their involvement in a business collaboration.
Clearly document and sign-off on client and project objectives

and outcomes.
Ensure objectives of the collaboration are compatible with those

of the collaboration partner’s strategies and objectives.
Lack of coordination Collaboration partners must not undertake activities that would
between management damage the collaboration. For example, a partner that continues to
teams market products or services to the detriment of the collaboration
partners where this has been explicitly agreed.
Differences in operating There must be clear alignment of procedures and systems to ensure
procedures and attitudes that milestones and deliverables are meet. For example, a partner that
among partners delivers late due to a procedural hic-up can build mistrust and severely
damage the collaboration.
P 10 DEPARTMENT FOR MANUFACTURING, INNOVATION, TRADE, RESOURCES AND ENERGY

Collaboration Partner Checklist
Below are some key questions when selecting a collaboration partner:
QUESTION Y N
Are my business goals aligned with the prospective collaboration partner’s
strategic goals?
Does the collaboration partner have complementary skills and resources?
Are all the partners of a similar size and capability?
Is there values alignment between the two parties?
Is the objective of the collaboration clearly identified by all parties?
Does the prospective collaboration partner have a similar operating culture?
Does the collaboration partner have sufficient financial resources to maintain

the venture’s efforts?
Does the partner have identifiable systems, processes and procedures to support
the collaboration?
Does the partner have aligned management teams?
Is there an appropriate governance structure in place for the collaborative arrangement?
Is there a good level of mutual dependency?
Is there a good level of communication between the partners?
Is there a plan to ensure regular communication is happening through the works?
Will partnering with this business increase our chances of winning this work?
Are we clear on the terms of this collaboration, who will provide what and how
we will work together?
P 11

Step 4 – Identifying and agreeing a Suitable
Collaboration Model
Collaborations can take various forms, from long-term R&D joint ventures with equity stakes to
loosely agreed short-term marketing partnerships. Two broad classes of collaborations can be
differentiated: non-equity and equity collaborations.
a) Non-equity collaborations: these collaborations are generally based on contractual agreements
or memorandums of understanding and entail any form of cooperative relationship between two or
more firms. These agreements are based on the informal interactions of two or more firms or are
the result of purposefully establishing a collaborative organisational relationship. Examples include
long-term supply relationships, licensing arrangements and distribution agreements.
b) Equity collaborations: these types of collaborations involve the creation of a separate new entity
(i.e., the joint venture). Joint venture partners provide financial capital and other resources to the
newly created firm, which typically has its own management team reporting to a board composed
of representatives from the joint venture partners.
Example of Collaborations
Collaborations can between occur between two or more companies, for instance:
• A
sales collaboration occurs when two companies agree to go to market together to sell
complementary products and services.
• A
manufacturing collaboration may occur when one or more manufacturers agree to build
different components based on the relative manufacturing strengths and production scale.
For example, Company A furniture company has high speed machines to output parts while
Company B provides hand-carved embellished components and Company C assembles,
markets and dispatches the furniture.
• A
solution-specific collaboration occurs when two companies decide to jointly develop and sell
a specific marketplace solution.
• A
geographic-specific collaboration is developed when two companies come together to jointly
market or cobrand their products and services in a specific geographic region. With a strategic
aim focused on selling solution-specific products to a particular region, for example, there can
be overlap with respect to the type classifying collaborations.
• A
service collaboration occurs when two or more service based companies agree to join
together to identify market opportunities, bid for and secure work in a particular target market.
Take Your Time

Once you have gone through the collaboration partner selection process, it is not always advisable to
enter into an collaboration immediately. An initial period could be used for firms to cooperate in some
informal activity before formalising agreements. This can be documented through a informal teaming
agreement. Such cooperation may then lead to a more enduring partnership or collaboration. This
incremental approach enables managers to keep adding to the complexity of things that they trust
a partner to do on the basis of previous experience. Such an approach keeps the expectations of a
partner lower, and enables managers to be more analytical in assessing why a particular venture did
not work out.

Step 5 – Collaboration Governance Design and Management
The organisation and functioning of collaborations is affected by the contractual agreements that
have been put in place, and the resulting governance structures and leadership behaviours of the
collaboration partners. While the contract is concerned with the allocation of risks and trading
gains resulting from exchanges between cooperating partners, governance refers to the chosen
institutional context in which the collaboration takes place. Although governance and contractual
form are related, they are uniquely different. Collaboration governance is concerned about the
following aspects of the collaboration:
a) The patterns of authority and influence that determine the use of collaboration resources and the
integration of collaboration partner interests.
b) Organisational structures of the collaboration (if joint venture is created).
c) The management of collaboration coordination and relevant procurement costs.
d) Management of and assignment of intellectual property developed as part of the collaboration
(see below).
e) The determination of collaboration task-scope, division of labour, task complexity and
inter-partner diversity.
Collaboration Leadership
Leadership influences the process that facilitates the performance of the collaboration team and is
shared among the partnering firms. A characteristic of leadership in the collaboration is the practice
of informal leadership. An informal collaboration team leader is one who, without authority, exerts
influence over team members by interpreting events, setting goals, and giving feedback. Formal
and informal leadership can significantly affect the performance of collaborations both positively
and negatively.
Monitor Collaboration Progress

The collaboration must establish the appropriate performance measures that are linked to the
collaboration’s strategic goals. Then, systems must be in place at the collaboration level and at
the partner level to collect information and evaluate those measures. Partners should generally
receive the following information regarding the business collaboration:
1. Financial contributions by all parties
2. Revenues received
3. Achievement of Critical Success Factors and key result areas
4. Report on any governance and management issues affecting the collaboration
Someone senior within each partner’s organization should be assigned the responsibility for receiving,
studying and evaluating the information received from the collaboration partners.
P 13

Managing Intellectual Property
Careful consideration should be given to any intellectual property (IP) as part of the collaboration.
There are three development stages of the collaboration where IP issues could arise:
1. Pre-contractual stage (before the parties sign the legal documentation establishing the
JV or collaboration);
2. Operational stage (on signing of the legal documentation);
3. Termination stage (on termination of the key obligations between the parties under the legal
documentation).
Pre-Contractual Stage
This stage relates to the protection of existing IP, including confidential information. Parties must
be careful to protect any information that they may need to share during negotiations, particularly
where the other party is an actual or potential competitor and there is a risk of misuse by the other
party or a third party. Before sharing confidential or otherwise sensitive or valuable information it
is usually advisable to enter into a written confidentiality agreement or non-disclosure agreement.
This agreement will typically require both that information (i) is not shared with third parties and
(ii) is only used for the purposes of negotiating the formation of the JV or collaboration. Partners
should also define what IP they will not be contributing to the collaboration. This is referred to as
‘background rights’, which were not created in the course of, or for the purpose of, conducting
the collaboration.
Operational Stage
This covers the protection of existing (declared) IP and that IP which may be developed as part of
the collaboration. Ownership of IP rights developed in the course of the JV or collaboration must
be determined. Future rights that have been developed in the course of the collaboration or by
either or both partners, or which are directly relevant to it, are referred to as ‘foreground rights’.
The parties must also consider who will be permitted to exploit those foreground rights, making
proper arrangements for their management and maintenance.
Termination Stage
Collaborations almost always come to an end, often sooner than expected. This being so, the parties
should consider (i) how to deal with foreground rights assigned or licensed to or by the collaboration,
or between them; (ii) what to do with background rights; and (iii) whether and how the circumstances
of termination could affect the agreed allocation of rights.

Step 6 – Formalise the Collaboration
Once you’ve selected your potential collaboration partner(s), you can then agree on who gives and
gets what, when, where, and how. It is now time for identifying, understanding and putting together
the possibilities for the collaboration. Mutual performance measure can now also be identified and
developed. Internal and external personnel (lawyers, experts etc) may be involved in developing not
only your collaboration structure, but also your road map.
Some parties may choose not to formalise their collaboration, dependent on the nature of the
relationship and the extent of work involved. For example, some parties may be satisfied with a
memorandum of understanding (MOU) outlining how they intend to work together. Parties need to
weigh up the risk and specifics of the particular work in determining whether or not to formalise
their agreement. A template MOU is attached to Appendix A.
In some instances, parties may also choose not to formalise their agreement until work has been
secured.
Experts advise coming up with a contract or letter of agreement that outlines the terms of the
collaboration, including how each organization will share in the revenue and expenses, as well as
a strategic plan that defines how the collaboration will work and be implemented. It is recommended
to clearly identify the pathway for achieving your common goal(s). The collaboration agreement
should include:
1. The roles and responsibilities of each party
2. The allocation of decision rights
3. The ownership structure (if joint venture)
4. The arrangements for different unforeseen events
5. The policies and procedures for communication and determination of conflicts or issues that arise
6. Exit strategies
7. A mechanism to handle price increase
8. Any regulations on various legal matters, e.g. confidentiality and nondisclosure agreements,
ownership and licensing of intellectual property rights and indemnity provisions.
For example, a proposal could be that Company A provides the equipment for a tender and Company
B implements and manages the service delivery i.e. installation, maintenance and ongoing support.
This value added service, by Company B gives both parties a competitive advantage for the tender.
P 15

Step 7 – Collaboration Termination
Partner should plan their termination strategy from the very beginning by specifying in the initial
agreement what happens to assets, customers and existing contracts at the end of the life of the
collaboration. Collaborations may terminate for any number of reasons:
• The collaborative relationship may break down
• Failure to achieve objectives
• Expiration of term of the collaboration
• Change in control of any collaboration partner
• The collaboration may accomplish its mission and therefore outlive its purpose
• Adverse action by regulatory authorities
• Partner strategies may change thus eliminating the need for the collaboration.
The terms on which a JV or collaboration may terminate, or on which one party’s involvement might
cease, should usually be agreed in as much detail as possible at the outset. There is a great deal
of value in knowing that there is a clear way out of the collaboration if need be, and in knowing how
shared assets will be distributed or disposed of if a partner exits.
Given that a collaboration may have ended its purpose and all parties obtained the desired outcome,
there may still be a number of obligations created during the formation and operation of the
collaboration. Below is a list of some of these obligations which may need attention:
• Insurance: Product liability, professional indemnity, public liability insurance and other forms
of insurance, can be required to be maintained for a number of years. Depending on the nature
of the collaboration, one or all the parties will require to maintain their insurance commitments.
• Intellectual Property: As discussed above, any IP created as a result of the collaboration
or background IP will need to be managed and royalties assigned for a number of years.
• Maintenance: Ongoing maintenance and support of some elements of the contract may need
to be managed by one or all the collaboration partners.
• Joint & several liability: Where two or more persons are liable in respect of the same liability,
they may either be: jointly liable, or severally liable, or jointly and severally liable. If the
collaboration collapses and has outstanding liabilities then creditors under joint and several
liability clauses may pursue an obligation against any one party as if they were jointly liable.
It then becomes the responsibility of the collaboration partners to sort out their respective
proportions of liability and payment.
Finally, keep in mind that collaborations end, and endings are not necessarily failures. The only
thing that counts is whether a collaboration fulfilled its strategic purpose before termination.

03 Legal Options
There are a number of legal options that can be used to implement collaborative contracting.
The main legal options available are given below:
• Lead Contractor
• Strategic Business Alliances
• Co-operatives
• Unit Trusts
• Joint Venture (Unincorporated)
• Limited Liability Company (Incorporated Joint Venture)
The above legal options range from a simple lead contractor to the more complex creation of an
incorporated joint venture using a limited liability company. We have provided the relative advantages,
disadvantages and examples or how the different collaboration options can be used. We have also
provided indicative costs and time implications for establishing these collaborations. Note that
costs are estimates only and will depend on a number of factors relating to the number of possible
collaborative partners, the level of legal complexity the partners may wish to undertake etc.
Lead Contractor Model
Description
The traditional model for two or more parties coming together to deliver a job. On organisation
(the Lead Contractor) will project manage the delivery of the project and engage other specialist
companies as subcontractors. The appointment of the lead and subcontractors will depend on the
skills and experience of the parties in undertaking a project of that nature.
When to Use
As a subcontractor it is best to utilise this model when you want to win a particular job or work in a
particular market but don’t have the established market share to bid for work on your own. Working
with a larger company means you can leverage their reputation to get a foot in the door to working
with new companies and in new markets.
Advantages
• Access to big name clients
• Negotiations with the client are generally done for you by the Lead Contractor
• Allows for specialisation – you can focus on core capabilities
• Opportunity to obtain complementary capabilities through on the job experience
• Securing the work is handled by the Lead Contractor – minimises business development expenses
• Less administrative burden – these are borne by the Lead Contractor
P 17
03 Legal Options
Disadvantages
• The Lead Contractor will take a portion of your pay from the client
• Lack of exposure to the client
• Risk transfer from the Lead Contractor
• Difference in bargaining power between Lead Contractor and Subcontractor
• Can be a more adversarial type relationship than other models
• Potential for scope creep if not managed properly which can reduce profit margins
Cost Implications
Minimal upfront costs.
As a subcontractor the only costs you would incur would be in having a lawyer review the
subcontracting document (if necessary).
Strategic Business Alliances
Description
A strategic business alliance is basically an agreement between two or more organisations that
they will work together to explore opportunities and bid for work on a project by project basis.
When to Use
There are a group of companies that are not in direct competition, but offer similar products and
services or appeal to the same target audience who wish to work together over a longer period
of time on the delivery of a number of different projects.
This type of agreement can be informal through a memorandum of understanding or formalised
through the creation of a legally binding document such as a business alliance agreement.
Advantages
• Gain competitive advantage through access to a partner’s resources, including markets,
technology, capital and personnel
• Fills gaps in technical expertise or knowledge
• Direct combined competitive energies towards defeating mutual rivals
• Can reduce the cost and make it more efficient to penetrate markets through joint efforts
in areas like research, technology sharing, marketing and promotion
• Economies of scale
• Sharing of complimentary resources and capabilities, enabling participants to grow and expand
more quickly and efficiently

03 Legal Options
Disadvantages
• Can be time consuming to establish communication mechanisms, building trust and
co-ordination costs
• Potential for a clash of egos and company cultures
• Dealing with conflicting objectives, strategies, corporate values and ethical standards
• Can result in becoming too dependent on other firms for essential expertise over the long term
• Liability levels will depend on the contractual relationships for the delivery of the project
• The relationship may not be ‘win-win’, one member may benefit more than the others
• Reduce future opportunities to be able to work with your alliance partners competitors
Cost Implications
Documentation should be developed between the parties to govern the relationship but this is relatively
inexpensive process. There will however be ongoing costs in negotiating lead and subcontractor
agreements on a project by project basis.
Approximate Fee: $1500 to $2500 to draft a Memorandum of Understanding or Business
Alliance Agreement.
Co-operatives
Description
A business cooperative is a registered organisation with a minimum of five individuals or businesses
that pool their resources in order to compete with larger corporations who have larger resources,
market power and budgets. All members have equal voting rights when making decisions about the
operation of the cooperative.
There are two types of cooperatives – trading cooperatives which are formed to establish a business
that makes a profit for its members and non trading cooperatives which is a ‘not for profit’ organisation.
Cooperatives allow members to pool resources to achieve greater benefits than they could as
individuals. Cooperatives belong to, and are operated for, the benefit of members who generally share
investment and operational risks, benefits and losses. Generally all members are expected
to participate and share the responsibility for running the cooperative.
When to Use
Cooperatives should be considered if there are at least 5 organisations in a similar field who have
a clear and common objective to work together to deliver service driven outcomes for its members.
P 19
03 Legal Options
Advantages
• it is generally cheaper to register a cooperative than a company
• all shareholders have an equal vote at general meetings regardless of their shareholding
or involvement in the cooperative
• shareholders, directors, managers and employees have no responsibility for debts of
the cooperative unless those debts are caused recklessly, negligently or fraudulently
• a cooperative is member owned and controlled, rather than controlled by investors
• all members and shareholders have to be active in the co-operative
Disadvantages
• possibility of conflict between members;
• longer decision-making process;
• there must be a minimum of five members
• there is a usually a limited distribution of surplus (profits) to members/shareholders and some
cooperatives may prohibit the distribution of any surplus to members/shareholders
• as cooperatives are formed to provide a service to their members rather than a return on
investment, it may be difficult to attract potential members/shareholders whose primary interest
is a financial return
• even though some shareholders may have a greater involvement or investment than others,
they still only get one vote
• members/shareholders have to be actively involved in the cooperative
Cost Implications
Medium cost involved in the establishment. Specialist help will be required through the various stages
of the cooperative process.
Approximate Fee: $1500.
Unit Trusts
Description
A unit trust is where the unit holders, who are all predominantly un-related members of two or more
separate businesses get together to run a business together. The trustee has no discretion on which
unit holder gets which distribution portion of income or capital of the trust. All income and capital is
distributed according to unit holding.
Trusts are created by a legal document called a trust deed which outlines the purpose of the trust,
the rights and obligations of the trustees and unit holders, powers of the trustee, and identifies
various parties such as initial unit holders & Trustee(s).

03 Legal Options
When to Use
Use when there are a number of unrelated investors coming together to pursue a common purpose.
Is a good option to consider when investors are contributing different amounts of capital.
Advantages
• Cheaper and more flexible than incorporation
• Relatively easy to establish and not subject to government controls on their formation or operation
(except where a company acts as a trustee)
• Some tax advantages exist (income tax and capital gains)
• Enables protection of assets
• Provides flexibility in determining the recipients of income distribution
• Liability of trustee can be limited if it is a company
• The beneficiaries may control the activities of the trust if they are also directors of the
trust company
Disadvantages
• Cannot distribute capital or revenue losses to unit holders
• Must be strict adherence to the terms of the trust deed
• If the trustee is a company, there are strict financial and legal considerations under the
Corporations Act 2001
• Management disputes may arise with a unit trust where it is under the control of more than
one person
Cost Implications
Medium level of cost associated with preparation of trust deed. Recommended that lawyers or your
accountant be engaged to assist in drafting of this documentation.
Costs will be more expensive if a company is used as the trustee.
Approximate Fee: $1500 to $2500.
Joint Venture (Unincorporated)
Description
An unincorporated joint venture is an association of investors which lacks both corporate form
and equity capital. It is sometimes called a contractual joint venture which is brought into existence
by a contract under the ambit of which investors undertake a joint commercial activity.
P 21
03 Legal Options
When to Use
Usually used when you are looking to carry out a specific business enterprise that has a defined end
date or is not likely to be long term.
If the degree of risk in the new venture is high consider using an incorporated joint venture to protect
the parent companies from the risk of failure.
Advantages
• Not regulated by specific statutes as are companies and partnerships
• Tax advantages, not required to file taxes as a business entity and partners can pass joint venture
losses and profits directly to their person income tax return
• Allow companies to enter related businesses or new geographic markets or gain new technological
knowledge relatively cheaply
• Provides access to greater resources, including specialised staff and technology
• Enables sharing of risks with a venture partner
• Joint ventures can be flexible. For example, a joint venture can have a limited life span and only
cover part of what you do, thus limiting both your commitment and the business’ exposure
Disadvantages
• Have unlimited liability for company debts and obligations. The joint venture is not a separate legal
entity from the participants
• It takes time and effort to build the right relationship and partnering with another business can
be challenging
• Joint venture does not give the management of the company complete control because the
decisions are taken by both the companies and this can create problems if both companies do not
agree on some issues
• It is difficult to integrate resources of companies entering into joint venture because both the
companies have different policies, cultures and objectives
• There is potential for conflicts and disputes on how to manage the business affairs of the
joint venture
• There are risks of an unincorporated joint venture being classified as a partnership which has tax
and operational implications. Careful drafting of the JV agreement is required to avoid this scenario
Cost Implications
Can be expensive to set up initially as the negotiation of the joint venture agreement can be time
consuming. Recommended that lawyers be engaged to assist in drafting of this documentation.
Approximate Fee: $2500 to $10,000 depending on complexity and number of participants.

03 Legal Options
Limited Liability Company (Incorporated Joint Venture)
Description
Is a form of joint venture but creates a separate company to establish this relationship. Generally it
will be established as a company limited by shares with means the liability of its members is limited
to the amount unpaid on shares held by them.
A limited liability company may be incorporated as a proprietary (private) or public company.
When to Use
Use when you are looking to carry out a specific business enterprise that is likely to be longer
term and when you want to shield the parent companies from the risk of the new venture failing.
Advantages
• Limited liability protection to shareholders
• A company has separate legal status which means third parties can generally only sue the
company, not the shareholders
• Continuity is preserved and is independent of members in that a company will last forever unless
liquidated by due process under the Corporations Act 2001
• A company is flexible in that its Constitution may be altered
• Shareholders usually have limited liability although directors nowadays are often asked
for personal guarantees
• There is greater flexibility in introducing new members and in settling the affairs
of deceased members
• Larger amounts of capital can be raised, both as debt and equity
• Small proprietary companies do not have to file annual financial statements or appoint auditors
Disadvantages
• The legal fees and registration fees for a company are such that most people do not incorporate
companies until their business grows to a reasonable size
• Members have less control and need not be part of management structure
• Onerous regulatory responsibilities including keeping proper books of account
Cost Implications
Set up costs will differ depending on size and complexity. If setting up a small proprietary company
this can be done relatively inexpensively through ASIC. The bigger cost implications are generally
related to meeting operational requirements imposed by the Corporations Act.
Approximate Fee: $500 to $1000 for registration only. Additional establishment costs will be incurred
in engaging accountants and lawyers to assist in the process and could be in excess of $10,000.
P 23
03 Legal Options
SETUP COSTS, LEGAL AND ACCOUNTING FEES
Limited
Lead
Unit Trust Liability
Contractor
(Approx $1500 Company
(Approx $0
– $2500) (In excess of
– $1000)
$10,000)
$0 $10,000+
Strategic
Business Joint Venture
Cooperatives
Alliance (Approx $2500
(Approx $1500)
(Approx $1500 – $10000)
– $2500)
Length of Time to Establish
Limited
Lead
Unit Trust Liability
Contractor
Company
SIMPLE (2–4 WEEKS) COMPLEX (6 MONTHS+)
Strategic
Business Joint Venture Cooperatives
Alliance

04 Appendix A – Sample
Memorandum of Understanding
The usual purpose of a Memorandum of Understanding (MOU) is to provide a brief record of the terms
of a transaction as agreed by the parties during a negotiation process. It expresses a convergence of
will between the parties, indicating an intended common line of action. It is often used in cases where
parties do not want to enter into a formal legal commitment but want to capture the essence of what
the parties have agreed to.
A Memorandum of Understanding can be a useful way to document and verify the key terms
of a transaction before entering into a final contract.
The following basic form of a Memorandum of Understanding (MOU) is between a Lead Partner
collaborating with a Supporting Partner for the purposes of identifying, bidding and securing business
opportunities to provide collaborative services to third parties.
Attached to this Appendix is a draft MOU for a Collaborative business arrangement.
Choosing between a Memorandum of Understanding and a Contract

• Consider whether you want to enter into a binding agreement at this stage, or whether you
do not wish to be contractually bound until a later stage in the negotiations.
• If you do not wish to be bound by the document until a formal contract comes into place then
you should use the Memorandum of Understanding. If you wish to be bound the document,
it is recommended that you enter into a contract.
• If you are unsure or concerned about any of your rights or obligations under this agreement,
you should seek independent legal advice.
P 25
MEMORANDUM OF UNDERSTANDING
This non-binding Memorandum of Understanding (“MOU“) is entered into between:
[Insert name of Lead Partner] of [Insert Registered Address of Lead Partner] [Insert ABN of Lead Partner]
and
[Insert name of Supporting Partner] of [Insert Registered Address of Supporting Partner]
[Insert ABN of Supporting Partner] (hereinafter referred to collectively as the Parties).
WHEREAS the parties have formed a business collaboration in order to perform certain
complimentary services and identify opportunities to bid for and secure the provision of the these
services in the area of [insert details of target markets and opportunities] to third parties on a project
by project basis [amend as appropriate to reflect the true intent of the partnership] (“Services”).
WHEREAS as a business partnership, the Parties have agreed to develop, deliver, operate, administer
and manage the Services on the terms set out in this MOU.
NOW, THEREFORE, in consideration of the mutual interests described above, the Parties agree
to work together in the following manner.
1. Purpose
1.1. The Parties agree to collaborate with each other, on the principles, terms and conditions set
out in this MOU, for the development and identification of opportunities to provide the Services
to third parties and where opportunities are secured the parties will collaborate on the delivery,
operation, administration and management of the Services to third parties (the “Project”).
1.2. The Parties agree to work together in good faith on the Project.
1.3. [insert any additional purposes as required]
2. Key Principles to Collaborate

2.1. The Parties acknowledge the following statement of principles to guide their partnership
under this agreement in relation to the Project.
2.1.1. Integrated service delivery will be client and outcome focussed;
2.1.2. The Parties will demonstrate, through their action, a willingness to make the
partnership succeed;
2.1.3. The Parties to the agreement share a common vision, values, and understanding
of the scope of their individual obligations under this MOU; and
2.1.4. The Parties will adhere to acceptable levels of privacy and confidentiality protection.
2.2. The Parties agree that in their interactions with each other they will adhere
to following behaviours
2.2.1. demonstrate and maintain transparency and trust
2.2.2. demonstrate and maintain responsiveness to timelines and communications
2.2.3. create and maintain mutual value
2.2.4. proactively work to develop mutual capability
2.2.5. demonstrate and maintain a willingness to work together to deliver the Project
2.2.6. [Insert any other relevant behaviours as appropriate]

3. Term and Operation
3.1. Term of Agreement
3.1.1. The term of this MOU is for a period of [insert length of MOU, usually 1-3 years] from the
effective date of this agreement and may be extended upon written mutual agreement.
3.1.2. It shall be reviewed at least [insert review period, at least annually] to ensure that
it is fulfilling its purpose and make any necessary revisions.
3.1.3. Either party may terminate this MOU upon thirty (30) days written notice without
penalties or liabilities.
3.2. Non-Binding Memorandum of Understanding
This Memorandum of understanding merely constitutes a statement of the mutual intention
of the parties with respect to its contents. It is not a formal undertaking and implies that
the signatories will strive to reach, to the best of their ability, the objectives stated in this
Memorandum of Understanding.
3.3. Nature of the Relationship
3.3.1. Subject to the terms of this MOU, the implementation and pursuit of the goals, objectives,
conditions and terms of this collaboration will be carried out in accordance with the
policies and procedures of each party.
3.3.2. This MOU will in no way alter the terms of employment or compensation of employees
of either organisation that is a party to this MOU.
3.3.3. The relationship between the parties created by this MOU is that of independent
contractors. Nothing contained in this document will be construed as constituting
any other relationship between the parties.
3.3.4. Each party is responsible for its own obligations arising under this agreement and
neither party shall have the right power, or authority to obligate or bind the other
in any manner whatsoever, except as otherwise agreed to in writing.
3.4. Liability
Each party will be responsible to the other party for the Services that it performs in respect
of the Project. This reflects that each party is separately liable to persons not a party to this
agreement for any actions, costs, claims, damages and charges in respect of injury, loss or
damage resulting from the negligent acts or omissions of its agents and employees. Each
party agrees that it will be responsible for any actions, costs, claims, damages and charges
in respect of injury, loss or damage resulting from the negligent acts or omissions of its agents
and employees.
4. Structure of Partnership
4.1. Management Structure
The Project will be managed using a structure made of the following features:
4.1.1. Lead Partner: [Name the Lead Partner]
4.1.2. Supporting Partner: [Name the Supporting Partner]
P 27
4.2. Management
Each party shall designate a senior partner, director or other senior representative to be
responsible for the overall administration of the Agreement (a “Responsible Officer”).
4.2.1. For the Lead Partner: [insert name, title and contact details of responsible officer]
4.2.2. For the Supporting Partner: [insert name, title and contact details of the responsible officer]
4.3. Roles of Partnership Members
Within the management structure outlined in clause 4.2 the parties will play different roles in the
Project as follows:
4.3.1. Role of the Lead Partner
[insert details of the roles and responsibilities of the Lead Partner in relation to the Project,
this may include bid management, project management, organising and chairing meetings,
report writing, client management, managing the finances and invoicing, providing resources
and equipment where necessary, making applications for government funding, removing
obstacles to the project’s success etc]

4.3.2. Role of the Supporting Partner
[insert details of the roles and responsibilities of the Supporting Partner in relation to the
Project, this may include attending meetings, project administration, writing bid proposals,
researching opportunities for collaboration, etc]

4.3.3. Joint Responsibilities
[insert details of any joint responsibilities of the parties, this may include preparing agreed
deliverables, meeting project milestones and deadlines, providing a responsible officer to
manage the administration of the project, etc]
5. Opportunity Identification and Bidding Process

5.1.1. The parties will jointly pursue opportunities to provide the Services together.
5.1.2. If either of the parties wishes to prepare a submission or tender in relation to the
provision of the Services, the parties will first consult with each other, prior to a
submission or tender to confirm whether the parties will or will not jointly pursue
the opportunity and obtain sign off from the respective Responsible Officers.
5.1.3. If either party elects not to participate in the preparation of a joint submission or tender
after preliminary joint analysis of the opportunity, either party may continue to finalise
a submission or tender, and perform the work to which it relates, either on its own or
in association with third parties.
5.1.4. In the spirit of the MOU and the development of a mutually beneficial relationship it is
intended that the parties should openly communicate reasons in deciding not to partner
on particular opportunities. This will enable a better understanding of each organisations
perspective, on a best for business opportunity basis, and will enable each business to
proactively strength each other’s support to the relationship for future opportunities.
6. Financial Arrangements
6.1. Payments for Services
6.1.1. Either party may at their election, invoice the client directly for the Services they have
provided in relation to the Project.
6.1.2. The Lead Agency may also, at its election, invoice the client directly for all services
related to the Project, including services provided by the Supporting Partner to the client.
In that event the Supporting Partner shall invoice the Lead Partner for their proportion of
the invoiced services provided to the client which shall be paid by the Lead Agency within
7 days of receipt of invoice.
P 29
6.2. Payments to Third Parties
The parties may make payments to a third party for services rendered or goods supplied
in relation to the Project in the ordinary and usual course of business as contemplated by
this Agreement.
6.3. Expenses
A party may not commit the other to any cost, expense or obligation without the written consent
of that party.
6.4. No Profit Sharing
Nothing in the agreement shall be construed as providing for the sharing of profits or losses
arising out of the efforts of any other party.
7. Confidentiality
7.1. The parties agree that in the course of the performance of the Services associated with the
Project, that each may be given access to, or come into possession of, confidential information
of the other party which information may contain trade secrets, proprietary data, or other
confidential material of that party.
7.2. Therefore the parties agree to execute a binding Non Disclosure Agreement to govern
the manner in which the parties may exchange, utilise and disclose where necessary
any confidential information associated with the Project.
8. Intellectual Property
8.1. Joint Intellectual Property
Where Services has been performed jointly by the Lead and Supporting Partner pursuant to the
Project, any intellectual property developed as a result including but not limited to information,
materials, products and deliverables, will be jointly owned by the parties.
8.2. Intellectual Property of the Parties
8.2.1. Where Services has been performed individually by the Lead Partner and the Supporting
Partner pursuant to the Project, any intellectual property developed as a result including
but not limited to information, materials, products and deliverables, shall be the property
of the respective parties performing the work.
8.2.2. All underlying methodology utilised by the Lead Partner and Supporting Partner
respectively which was created and/or developed by either before the date of this
Agreement and utilised in the course of performing engagements pursuant to this
Agreement shall not become the property of the other.
8.3. Trademarks, Trade Names and Copyrights
Except as otherwise expressly provided herein, this MOU does not give either party any
ownership rights or interest in the other parties trade name, trademarks or copyrights.
9. Dispute Resolution
9.1. Dispute
Where a disagreement or dispute arises out of or in connection with this MOU, the aggrieved
party may give written notice of the dispute to the other party.

9.2. Attempt to Settle Dispute
9.2.1. In the event that an aggrieved party gives notice of a dispute to the other party under
clause 8.1, the Parties must use their best endeavours to resolve the dispute in good faith
through negotiation.
9.2.2. Where the Parties are unable to settle a dispute within 7 days of the aggrieved party
giving notice to the other that a dispute exists, the parties must make representatives
with authority to settle the dispute available for the purpose of meeting in an effort to
resolve the dispute. At least one meeting of the authorised representatives must take
place within 21 business days of service of the referral of the dispute to them.
9.3. Mediation
If the dispute is not resolved in accordance with clause 8.2 above, the parties may refer to dispute
to mediation under the mediation rules of the Law Society of South Australia [amend jurisdiction
as appropriate] to:
9.3.1. a mediator agreed by the Parties; or
9.3.2. if the Parties are unable to agree a mediator within 10 business days, a mediator
nominated by the President of the Law Society or the President’s nominee.
9.4. Cost of Mediation
Each party must bear its own mediation costs. The parties must bear equally the costs
of any mediator.
9.5. Termination of Mediation
The mediation process within terminate within 30 days of the appointment of the mediator,
upon which any Party will be entitled to commence court proceedings in relation to this dispute.
10. General Provisions

10.1. Assignment
Neither party will assign or otherwise transfer its rights or delegate its obligations under this
Agreement without both parties prior written consent. Any attempted assignment, transfer
or delegation without such consent is void.
10.2. Variation
This agreement can be modified or amended only in writing signed by all parties.
10.3. Conflict of Interest
Each party warrants that no conflict of interest exists or is anticipated relevant to its role in this
agreement or the Project. If a conflict of interest arises, the party affected will notify the other
party immediately and the parties will seek to resolve the conflict to ensure the successful
performance of the Project is not jeopardised.
10.4. Insurance
Where required by law, the parties will maintain insurance policies with respect to performance
of their obligations under this MOU.
10.5. Governing Law
The laws in force in the State of South Australia shall apply to the Agreement and the Parties
shall submit to the jurisdiction of the courts of South Australia.
P 31
10.6. Assignment and Delegation
Neither party shall assign or delegate this MOU or any rights, duties, or obligations hereunder
to any other person and/or entity without prior express written approval of the other party.
10.7. Notices
Any notice required or permitted to be given under this MOU shall be in writing, by hand delivery,
commercial overnight courier, or registered or certified mail, to the address stated below for
Small or to the address stated below for Large, and shall be deemed duly given upon receipt,
or if by registered or certified mail three (3) business days following deposit in the mail. The
parties hereto may from time to time designate in writing other addresses expressly for the
purpose of receipt of notice hereunder.
10.7.1. If to Lead Partner: [Insert address]
10.7.2. if to Supporting Partner: [Insert address]
10.8. Publicity
A party may make press or other announcements or releases relating to this MOU or the Project
without the approval of the other party as to the form and manner of the announcement or
release, except and to the extent that the announcement or release is required to be made by
the party by law.
10.9. Entire Agreement
This MOU constitutes the entire agreement of the Parties about its subject matter and
supersedes all previous agreements, understandings and negotiations on that subject matter.
EXECUTED as a Memorandum of Understanding
DATED this day of 201X
SIGNED for and on behalf of SIGNED for and on behalf of

[Insert Lead Partner] [Insert Supporting Partner]
By: By:

05 Appendix B – Sample
Non-Disclosure Agreement
Non Disclosure Agreement Template
THIS AGREEMENT is made the day of

BETWEEN [Insert Lead Partner Name] of [Insert Registered Address] [Insert ABN] (“Lead Partner”)
AND [Insert Supporting Partner Name] of [Insert Registered Address] [Insert ABN]
(“Supporting Partner”)
RECITALS:
A. The Lead Partner and Supporting Partner have an interest in forming a business collaboration
wherein one party (“the Disclosing Party”) might share information with the other party
(“the Receiving Party”) that the Disclosing Party considers to be proprietary and confidential
(“Confidential Information”) for the purposes of undertaking activities related to such
business collaboration.
B. The Parties agree that in consideration of the Disclosing Party disclosing Confidential
Information to the Receiving Party, the Receiving Party agrees to keep the Confidential
Information of the Disclosing Party confidential, and to only use and disclose that
Confidential Information pursuant to the terms of this Agreement.
OPERATIVE PART
1. General Matters
1.1. Definitions
In this Agreement including the Recitals unless the Contrary Intention appears:
1.1.1. “Confidential Information” means any means any information provided to the Receiving
Party from the Disclosing Party, in any Form or Storage medium (and includes
information disclosed orally) which is:
(a) is by its nature confidential;
(b) is designated by the Disclosing Party as confidential; or
(c) the Receiving Party knows or ought to know is confidential;
but does not include information which:
(d) was known to the Receiving Party as at the date of this Agreement otherwise than
as a result of disclosure by the Disclosing Party;
(e) was in or becomes part of the public domain otherwise than as a result of a breach
by the Receiving Party of its obligations under this Agreement;
(f) is disclosed to the Receiving Party by any third party which does not owe any
obligation to the Disclosing Party (directly or indirectly); or
(g) is required by law to be disclosed by the Receiving Party provided that the Receiving
Party will immediately notify the Disclosing Party of any such requirement
– if possible before making the disclosure.
(h) The onus of proof of the matters referred to in clauses (d) – (g) inclusive is on the
Receiving Party.
P 33
1.1.2. “Corporations Act” means the Corporations Act 2001 (Cth).
1.1.3. “Disclosing Party” means the party that discloses or provides Confidential Information
to the other party and in the case of this Agreement may be either party.
1.1.4. “Form” in relation to Confidential Information means the way in which Confidential
Information is written or stored, including whether it is visible or invisible, machine,
electronically or digitally encoded, embodied or otherwise.
1.1.5. “Parties” means [Insert Lead Partner Name] and [Insert Supporting Partner Name]
and Party means either of the Parties
1.1.6. “Receiving Party” means the party that receives Confidential Information from the
Disclosing Party or any Related Entity of the Disclosing Party and in the case of this
Agreement may be either party.
1.1.7. “Related Entity” has the same meaning that it has in the Corporation’s Act.
1.1.8. “Representative” in relation to the Receiving Party includes employees, agents,
contractors (including subcontractors), consultants, officers, directors, partners
or joint venturers of the Receiving Party or a Related Entity of that party.
1.1.9. “Storage Medium” means in relation to Confidential Information, any method of storing
or holding the Confidential Information and from which the Confidential Information can
be observed, read, deciphered or reproduced.
1.1.10. “Specified Purpose” means the purpose for which the Confidential Information was
provided to the Receiving Party.
1.2. Construction of Terms
In this Agreement including the Recitals unless the contrary intention appears:
1.2.1. the clause headings are for convenient reference only and have no effect in limiting
or extending the language of the provisions to which they refer;
1.2.2. words in the singular number include the plural and vice versa;
1.2.3. a reference to a person includes an individual, partnership and a body whether corporate
or otherwise;
1.2.4. where a word or phrase is given a particular meaning, other parts of speech
and grammatical forms of that word or phrase have corresponding meanings;
1.2.5. a reference to any document (including this Agreement) includes a reference to that
document as amended, rectified or replaced from time to time and to any document
so amending, rectifying or replacing the document;
1.2.6. a statute, ordinance, code or other law includes regulations and other instruments under
it and consolidations, amendments, re-enactments or replacements of any of them;
1.2.7. where a term is assigned to a particular meaning, other grammatical forms of that term
have a corresponding meaning;
1.2.8. a reference to a person in a document includes that person, its legal representatives,
successors and permitted assigns;
1.2.9. an agreement, representation or warranty in favour of two or more persons (including
the Receiving Party) is for the benefit of them jointly and each of them individually;

1.2.10. an agreement, representation or warranty by two or more persons
(including the Receiving Party) binds them jointly and each of them individually;
1.2.11. the meaning of general words is not limited by specific examples introduced by including,
for example and similar expressions.
1.3. Interpretation
1.3.1. No Waiver
None of the provision hereof shall be taken either at law or in equity to have been varied
waived discharged or released by either party unless by its express consent in writing.
No waiver by either Party of one breach of any provision of this Agreement shall operate
as a waiver of any breach, or of any other provision of this Agreement.
1.3.2. Cumulative Remedies
The rights and remedies provided under this Agreement are cumulative and not exclusive
of any rights or remedies provided by law and are in addition to and not in derogation of
any other right or obligation under any other deed or agreement between the parties.
1.3.3. Governing Law
(a) The law of the State of South Australia governs this Agreement and any legal
proceedings or arbitration under this Agreement. Any legal action in relation to this
Agreement against any Party may be brought in any court of competent jurisdiction
in the State of South Australia.
(b) Each Party by execution of this Agreement irrevocably, generally and unconditionally
submits to the non exclusive jurisdiction of any court specified in this provision in
relation to both itself and its property.
1.3.4. No exclusion of laws
This Agreement shall not be construed to exclude the operation of any principle of law or
equity intended to protect and preserve the confidentiality of the Confidential Information.
1.3.5. Contract Interpretation
No rule of contract interpretation will be applied in the interpretation of this Agreement to
the disadvantage of one Party on the basis that it prepared or put forward any document
comprising part of this Agreement.
1.3.6. Severability
If any part of this Agreement is or becomes illegal, invalid or unenforceable in a relevant
jurisdiction, the legality, validity or enforceability of the remainder of this Agreement will
not be affected and this Agreement will be read as if that part had been deleted.
1.3.7. Entire Agreement
This Agreement constitutes the whole understanding between the Parties, and embodies
all terms and conditions of the transaction.
2. Use and Dealing with Confidential Information

2.1. The Receiving Party
2.1.1. must keep confidential all Confidential Information;
2.1.2. may use the Confidential Information solely and exclusively for the Specified Purpose
P 35
2.1.3. will not cause, allow, suffer or permit the Confidential Information to be disclosed by the
Receiving Party or any Representative of the Receiving Party, to any person including any
Related Entity except as provided by clause 2.2
2.1.4. must not copy to, store or save the Confidential Information on any computer, database
or other electronic means of data or information storage or exchange (“Computer
System”), unless such Computer System is controlled solely and exclusively by the
Receiving Party.
2.2. A Receiving Party may only disclose Confidential Information:
2.2.1. to an employee of the Receiving Party and only then if that employee requires to know
that information for the Specified Purpose
2.2.2. where it is required by statute, rule, regulation, judicial process or in connection to any
litigation to which it is a party in connection with this Agreement, provided that before
such disclosure the Receiving Party notifies the Disclosing Party in writing,
2.2.3. to a Representative (not being a direct employee) of the Receiving Party, and only if before
such disclosure the Receiving Party has:
(a) received written consent from the Disclosing Party to do so; and
(b) obtain a written undertaking (“Undertaking”) from that Representative to maintain
and respect the confidentiality of the Confidential Information on the same terms
as required by this Agreement as if the Representative were a Receiving Party
under this Agreement.
2.3. The Receiving Party must, to the best of its ability
2.3.1. ensure that each employee to whom it discloses Confidential Information pursuant to
clause (2.2.1) maintains and respects the confidentiality of the Confidential Information
on the same terms as required by this Agreement as if the employee were a Receiving
Party under this Agreement;
2.3.2. ensure that each person to whom it discloses Confidential Information pursuant
to clause 2.2.3 complies with its Undertaking; and
2.3.3. take all steps to prevent or stop a suspected or actual breach of an Undertaking
2.4. The Provisions of clauses 2.1 to 2.4 inclusive survive the expiration or termination of this
Agreement until all of the Confidential Information comes into the public domain otherwise
than by disclosure in breach of this Agreement or a similar agreement between the parties.

3. Breach of Confidentiality
3.1. The Receiving Party agrees to indemnify and keep the Disclosing Party fully indemnified
against all damage, loss and expenses arising from or in relation to any obligation contained
in this Agreement.
3.2. The Receiving Party acknowledges that damages may not be an adequate remedy for a breach
of the provisions of this Agreement and that the Disclosing Party shall be entitled to injunctive
or other equitable relief for any threatened or actual breach of the Receiving Parties obligations
under this Agreement.
4. No Representations Or Warranties
4.1. The Receiving Party acknowledges and agrees that the Disclosing Party:
4.1.1. has not made or makes any representation, warranty or undertaking of any kind in
respect of the accuracy, completeness, veracity, content or otherwise in relation to the
Confidential Information; or
4.1.2. is not under any obligation to the Receiving Party to notify it, or provide any further
information if the Disclosing Party becomes aware of any of the matters referred to in
clause 4.1.1 or any change in circumstances or information that may affect such matters.
4.2. The Receiving Party acknowledges and agrees that it must make its own assessment of
all information disclosed by the Disclosing Party and must satisfy itself of the accuracy,
completeness, veracity, content or otherwise in relation to the Confidential Information.
5. Return of Confidential Information
5.1. The Receiving Party shall within 7 business days return and redeliver to the Disclosing Party all
Confidential Information provided pursuant to this Agreement, in whatever form of storage or
retrieval which is in the possession, custody or control of the Receiving Party upon the earlier of:
5.1.1. The completion of termination of dealings between the parties as contemplated
by this Agreement;
5.1.2. The termination of this Agreement; or
5.1.3. At such time as the Disclosing Party may request provided however that the Receiving
Party may retain such of its documents as are necessary to enable it to comply with its
document retention policies.
5.2. Alternatively the Receiving Party may with the written consent of the Disclosing Party
immediately destroy the Confidential Information and upon request certify in writing such
destruction to the Disclosing Party.
6. Term
6.1. This Agreement shall remain in effect for a two year term from the date of execution.
Notwithstanding the foregoing the Receiving Parties duty to hold in confidence Confidential
Information disclosed during the term shall remain in effect indefinitely.
P 37
EXECUTED as an Agreement
Date of Agreement:
SIGNED for and on behalf of [Insert Lead Partner]

by its duly authorised representative in the presence of:
Signature
Print name
Witness
SIGNED for and on behalf of [Insert Supporting Partner]

by its duly authorised representative in the presence of:
Signature
Print name
Witness

06 Notes
P 39
Department for Manufacturing,
Innovation, Trade, Resources and Energy
Level 9, The Conservatory
131–139 Grenfell Street, Adelaide SA 5000
GPO Box 1264, Adelaide SA 5001
T +61 8 8303 2400
F +61 8 8303 2509
E dmitresbs@sa.gov.au
www.dmitre.sa.gov.au/sbs
DISCLAIMER
The Government of South Australia gives no
warranty and makes no representation, whether
express or implied, as to the accuracy of information
contained within this publication or the suitability
of the information for any purpose. Any use of the
information contained in this publication (whether
authorised or not) is at the users’ sole risk and
the Government of South Australia disclaims
responsibility for any loss or damage incurred
as a result of such use. The information is provided
solely on the basis that users of the information
will make their own assessment of the accuracy
of the information and users are advised to verify
all information contained within this document.
Content correct at time of printing.
COPYRIGHT
Produced by the South Australian Department
for Manufacturing, Innovation, Trade,
Resources and Energy © November 2012

Guide To Business Collaborative Contracting

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Guide To Business Collaborative Contracting

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INFORMED / CONNECTED / COMPETITIVE / SUSTAINABLE

What is a Business Collaboration? P3

02 Forming a Business Collaboration P4

Step 1 – Identify the Opportunity P5

Step 2 – Analyse Capabilities to Meet the Opportunity P6

Step 3 – Identify Suitable Collaboration Partners P8

Step 4 – Identifying and Agreeing a Suitable Collaboration Model P 12

Step 5 – Collaboration Governance Design and Management P 13

Step 6 – Formalise the Collaboration P 15

Step 7 – Collaboration Termination P 16

04 Appendix A – Sample Memorandum of Understanding P 25

05 Appendix B – Sample Non-Disclosure Agreement P 33

P2 DEPARTMENT FOR MANUFACTURING, INNOVATION, TRADE, RESOURCES AND ENERGY

What is a Business Collaboration?

02 Forming a Business Collaboration

1 Identify the opportunity

2 Analyse capabilities to meet the opportunity

3 Identify suitable collaboration partners

4 Identifying a suitable collaboration model

Establish relevant collaboration governance

6 Formalise the collaboration (if required)

7 Collaboration assessment and termination

P4 DEPARTMENT FOR MANUFACTURING, INNOVATION, TRADE, RESOURCES AND ENERGY

Entering New Markets

Delivering Innovative New Technologies or Processes

Reducing Financial Risk of Research & Development

An Identified Client Need for Partners to Come Together

Allowing Pursuit of Broader Scopes of Work

02 Forming a Business Collaboration

Step 2 – Analyse Capabilities to Meet the Opportunity

Identifying Strengths and Weaknesses

Match the bid to the opportunity

P6 DEPARTMENT FOR MANUFACTURING, INNOVATION, TRADE, RESOURCES AND ENERGY

02 Forming a Business Collaboration

Are all the partners of a similar size and capability?

Risks when Forming a Business Collaboration

P8 DEPARTMENT FOR MANUFACTURING, INNOVATION, TRADE, RESOURCES AND ENERGY

Reason for Failure Possible Solution

Once in a Business Collaboration, if these issues arise, try to empathise

To deepen your level of empathy and increase the likelihood of creating

Ensure that the collaboration is fair on all parties of the collaboration.

02 Forming a Business Collaboration

Reason for Failure Possible Solution

Clearly document and sign-off on client and project objectives

Ensure objectives of the collaboration are compatible with those

P 10 DEPARTMENT FOR MANUFACTURING, INNOVATION, TRADE, RESOURCES AND ENERGY

Does the collaboration partner have complementary skills and resources?

Are all the partners of a similar size and capability?

Is there values alignment between the two parties?

Is the objective of the collaboration clearly identified by all parties?

Does the prospective collaboration partner have a similar operating culture?

Does the collaboration partner have sufficient financial resources to maintain

Does the partner have aligned management teams?

Is there an appropriate governance structure in place for the collaborative arrangement?

Is there a good level of mutual dependency?

Is there a good level of communication between the partners?

Is there a plan to ensure regular communication is happening through the works?

02 Forming a Business Collaboration

Take Your Time

P 12 DEPARTMENT FOR MANUFACTURING, INNOVATION, TRADE, RESOURCES AND ENERGY

Monitor Collaboration Progress

02 Forming a Business Collaboration