Forming a joint venture is an important tool to help small businesses increase their competitiveness under federal acquisitions. But for all the benefits, some headaches remain.

One common issue arises when a solicitation requires the prime contractor to hold a facility security clearance. Because a joint venture is an unpopulated legal entity formed for the purpose of bidding on a specific opportunity, the joint venture itself (as the prime contractor) often lacks the needed clearance—even though the joint venture’s members might both hold it. In these situations, a form-over-substance evaluation may leave the joint venture ineligible for award.

Fortunately, the SBA has recognized the silliness of such an exclusion and has invited feedback on a potential solution.