SDVOSB Joint Ventures: JV Agreement Must Name Program Manager

In Romeo and Juliet, the heroine famously muses “What’s in a name?”  Juliet’s point, as your junior high English teacher probably emphasized, is that the young lovers’ family names should not define them.  If Juliet had her way, names would be meaningless.

Tell that to the SBA’s Office of Hearings and Appeals.  (How’s that for a segue?)  SBA OHA has held that when it comes to service-disabled veteran-owned small business joint ventures, the parties must include the specific name of the SDVOSB employee who will serve as the project manager.  Without a name, the SDVOSB joint venture is invalid.

Let’s back up a little.  The SBA’s regulations governing service-disabled veteran-owned small business joint ventures require the joint venturers to include a number of required provisions in the joint venture agreement.   Among the required provisions is that an employee of the SDVOSB member of the joint venture be named as the project manager.  And, as SBA OHA held in SDVOSB Appeal of Rush-Link One Joint Venture, SBA No. VET-228 (2012), the specific name of that project manager must be included in the agreement.

The Rush-Link SDVOSB appeal involved a joint venture between LINK, which held itself out as a service-disabled veteran-owned small business, and RUSH Construction, Inc., which was not a SDVO small business.  The parties executed a joint venture agreement, which stated that “a LINK employee” would serve as the project manager.  However, the joint venture’s proposal named a RUSH employee as the project manager.

After the joint venture was identified as the successful awardee, the SBA sustained a SDVO protest against the joint venture.  On appeal, SBA OHA agreed.  It found two problems with the joint venture agreement.

First, SBA OHA held that the vague statement that “a LINK employee” would serve as the project manager was not enough to meet the regulatory requirement that an employee of the SDVO small business be the project manager.  Rather, SBA OHA stated, the joint venture agreement should have identified a “specific person as the project manager.”

Second, SBA OHA noted that “the joint venture agreement is contradicted by” the proposal, which named a RUSH employee as the project manager. Accordingly, SBA OHA held that the joint venture did not meet the regulatory requirements “because a LINK employee is not actually serving as project manager notwithstanding the statement” in the parties’ joint venture agreement.

Unless you slept through English class, I’m probably not giving anything away by mentioning that Romeo and Juliet does not exactly end well for the young couple.  While I have not yet seen anyone compare SBA OHA judge Kenneth Hyde to Shakespeare, Judge Hyde does write thorough opinions, and the message Judge Hyde delivers in Rush Link is clear: when it comes to SDVOSB joint ventures, a name matters.  Fail to include the project manager’s name in the joint venture agreement, and you could be looking at your own tragedy, in the form of a sustained SDVOSB protest.


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