A joint venture may be awarded an 8(a) set-aside contract so long as the SBA approves the joint venture before award.
In a recent GAO bid protest decision, a procuring agency rejected a joint venture’s proposal for an 8(a) set-aside contract because the joint venture had not been approved by the SBA as of the date of proposal submission. The GAO–relying in part on input from the SBA–held that the rejection was improper.
The GAO’s decision in BGI-Fiore JV, LLC, B-409520 (May 29, 2014) involved a NASA solicitation for facility services at NASA’s Langley Research Center. The solicitation was issued as an 8(a) set-aside.
Banda Group International, LLC, an 8(a) participant, formed a joint venture with Fiore Industries, a non-8(a) small business. The parties submitted their joint venture agreement to the SBA for approval on December 10, 2013. However, when the joint venture submitted its proposal in January 2014, the SBA had not yet approved the joint venture.
After reviewing the joint venture’s initial proposal submission, NASA notified the joint venture that it had been excluded from the competition. NASA stated that the solicitation was limited to certified 8(a) participants, and that the joint venture had not been certified by the SBA.
The joint venture filed a GAO bid protest. The joint venture acknowledged that the SBA had not yet approved the joint venture agreement. However, the joint venture argued that the relevant SBA regulations governing 8(a) joint ventures do not require the joint venture to be approved prior to submission of the proposal. Rather, the joint venture argued, the relevant regulations merely require that the 8(a) member of the joint venture be a certified 8(a) participant at the time of proposal submission and that the joint venture be approved by the SBA prior to the time of award.
The GAO requested comments from the SBA, which weighed in on the protester’s side. The SBA pointed out that it “does not ‘certify’ joint ventures for admission to the 8(a) program.” Rather, “only the 8(a) participant to the joint venture is certified into the program.” The joint venture then relies on the certification of its 8(a) member to qualify for 8(a) set-aside contracts. More importantly, the SBA confirmed that the 8(a) joint venture regulation, 13 C.F.R. 124.513, “contemplate[s] approval ‘prior to the award of an 8(a) contract on behalf of the joint venture.'”
The GAO agreed with the SBA’s interpretation of the regulations. The GAO wrote:
In this case, the record shows that Banda Group International, LLC was a previously certified 8(a) participant, satisfying the requirements of FAR provision 52.219-18, and that BGI-Fiore submitted its 8(a) joint venture agreement to SBA by December 10, 2013–well in advance of the January 27 submission of its proposal–thereby satisfying the requirements of 13 C.F.R. 124.513(e) concerning the submission of a proposal. Where BGI-Fiore met the eligibility requirements for submission of a proposal set forth by both regulations applicable in this case, NASA erred in rejecting BGI-Fiore as an ineligible offeror.
The GAO sustained the joint venture’s protest, and recommended that NASA reinsert the joint venture into the competition. The GAO also recommended that the joint venture be reimbursed its costs of filing and pursuing its protest.
The GAO’s decision in BGI-Fiore JV confirms that 8(a) joint ventures need not be approved by the date of proposal submission. Instead, the SBA’s approval of an 8(a) joint venture need only occur prior to award.