For the most part, the rules on joint ventures under SBA are very similar. the various regulations for small business, 8(a), SDVOSB, WOSB, and HUBzone joint ventures are so similar in fact that they are almost identical. But they are not perfectly identical. There are a few quirks that distinguish the regulations from the others, and one such quirk can cost contractors dearly if they are not careful. In today’s post, we will review an SBA Office of Hearings and Appeals (OHA) case in which one SDVOSB nearly fell victim to this quirk to show what this quirk is, and how you can avoid the same.

In VSBC Protest of: Gen. Servs. Admin., Protestor Re: Sugarloaf Techs. LLC, SBA No. VSBC-461-P, 2026 (Jan. 15, 2026), the GSA issued the Polaris GWAC procurement on September 15, 2022. Award apparently went to Sugarloaf Technologies, LLC, (Sugarloaf), an SDVOSB/mentor-protégé joint venture, on August 28, 2025. On September 8, 2025, however, GSA itself filed a size protest against Sugarloaf, claiming that Sugarloaf’s joint venture agreement did not comply with the applicable joint venture regulations.

In particular, GSA claimed that the joint venture agreement lacked a statement stating that quarterly financial statements showing cumulative contract receipts and expenditures will be submitted to SBA no later than 45 days after each operating quarter of the joint venture. This language is required for all SDVOSB joint venture agreements under 13 C.F.R. § 128.402(c)(11). SBA’s discussion also suggests that the joint venture agreement excluded the language required by 13 C.F.R. § 128.402(c)(12) “[s]tating that a project-end profit and loss statement, including a statement of final profit distribution, must be submitted to SBA no later than 90 calendar days after completion of the contract.”

Why, then, was this language not in Sugarloaf’s agreement? The case never discusses it, but we note that, as Sugarloaf is a mentor-protégé joint venture, the requirements of 13 C.F.R. § 125.8 also applied to it. Under 13 C.F.R. § 125.8, there is no provision requiring the language discussed in 13 C.F.R. §§ 128.402(c)(11) and (12). Rather, there are two similar requirements. One is that each mentor-protégé joint venture agreement have language “[s]tating that annual performance-of-work statements required by paragraph (h)(1) must be submitted to SBA and the relevant contracting officer not later than 45 days after each operating year of the joint venture.” The other is that each such agreement have language “[s]tating that the project-end performance-of-work required by paragraph (h)(2) must be submitted to SBA and the relevant contracting officer no later than 90 days after completion of the contract.” We suspect that, due to the similarity of the joint venture regulations, whoever prepared this agreement overlooked that the requirements in 13 C.F.R. §§ 128.402 and 125.8 are not completely identical.

Such an error is not a small thing. By failing to comply with 13 C.F.R. § 128.402, Sugarloaf would, seemingly, not be eligible for SDVOSB set asides! However, Sugarloaf was able to survive the protest. Sugarloaf acknowledged that it neglected to include the required language in 13 C.F.R. § 128.402, but noted that its agreement contained a provision stating that any provision conflicting with SBA rules is null and void or interpreted in a manner consistent with SBA rules. It further had provisions stating that the managing member would prepare, provide, and submit financial reports “as may be required by the Contracts or Task Orders to the Joint Venture” and “as required by the terms of this Agreement or applicable regulation.”

OHA looked at these provisions and noted that it was true that the joint venture agreement “did not explicitly contain these provisions requiring certain financial reports.” However, OHA observed that it contained language not just requiring extensive financial reports, but, “more importantly, a provision explicitly incorporating the requirements of SBA’s regulations.” Specifically, it was the language stating that the managing member would submit financial reports as “required by the…applicable regulation” that OHA concluded incorporated the requirements of 13 C.F.R. §§ 128.402(c)(11) and (12). Thus, OHA ruled in Sugarloaf’s favor.

To be certain, Sugarloaf was very fortunate here. One could well argue that the language in 13 C.F.R. §§ 128.402 requires express provisions on statements within certain timeframes, such that simply saying one will submit reports in compliance with applicable regulation will not suffice to meet that requirement. This case demonstrates that OHA will indeed have some flexibility when it comes to JV regulatory requirements. This just goes to show how crucial it is to review these regulations carefully, and why utilizing a federal contracting attorney can save you a lot of heartache. It’s also good reason to have language confirming that the agreement will comply with and provide reports covered by all regulations. Such language may not necessarily always save you, but, as Sugarloaf showed, it sometimes can be the difference between keeping an award and losing it.

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