SBA Clarifies How to Calculate Joint Venture Receipts for Small Business Size Purposes

In many industries, small business status under SBA’s government contracting rules depends on a company’s average annual receipts. But if a company is a member of a joint venture, it can be confusing figuring out which joint venture receipts count toward the company’s small business size.

Fortunately, in its recent new rule, SBA has provided two important clarifications. Let’s take a look.

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Joint Ventures and the Limitations on Subcontracting: SBA Provides Some Clarity

Joint ventures operating under the SBA’s regulations are subject to two work share restrictions: the limitations on subcontracting, which governs work share between the joint venture and its subcontractors) and the so-called “40 percent rule,” which governs work share between the joint venture partners.

It can be easy to get confused about how the rules work together. Fortunately, in a new rule published on October 16, SBA has provided some much-needed clarity.

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