GAO Sides with VA, Joint Venture Must Be SDVOSB Eligible at Time of Award

Here at SmallGovCon, we spend a lot of time studying (and talking about) the various small business federal set-aside programs. As a result, a lot of our focus is dedicated to SBA’s regulations governing these programs—after all, it is the agency that was created by the Small Business Act to issue and implement precisely these regulations. So, it may be tempting for small business federal contractors to focus on those SBA rules and think, so long as they have complied with all the nuances they contain, their business is eligible for these sorts of set-aside contracts.

As one joint venture recently found out the hard way, however, other agencies have their own unique sets of regulations that can impact set-aside contracts as well. One such agency is the Department of Veterans Affairs (VA), which has its own body of rules governing VA procurements—the Veterans Affairs Acquisition Regulation (“VAAR”). One of the programs that the VA implements is the Veterans First Contracting Program (“Vets First”), which interacts quite a bit with SBA’s SDVOSB program. As a result of the overlap, potential offerors on VA contracts set aside for SDVOSBs must ensure they comply with both VA and SDVOSB regulations, and this is where the protester in Potomac Valor Healthcare-2, LLC, B-423195.2 (Aug. 12, 2026) ran into trouble. GAO’s decision in the case sheds some light on the way VA’s specific requirements create additional obligations for SDVOSB joint ventures, and serves as a cautionary tale to other prospective offerors who may find themselves in a similar situation. In short, the protester was SDVOSB compliant and registered in VetCert at the time of offer, but erroneously believed that it did not have to maintain that same level of compliance at the time of award. GAO found that, as the SDVOSB partner of the joint venture was no longer small at the time of award (a fact reflected in VetCert), the JV could not receive the award.

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GAO: Forgotten Certification Dooms JV Award

Forming a small business joint venture and utilizing it for federal contracts can at times be quite tedious. Often businesses can feel intimidated by the various required joint venture agreement terms in the SBA’s joint venture regulations and the reporting requirements placed on joint ventures. But complying with the SBA’s joint venture regulations can make or break a contract award, especially if the regulations are made a material requirement of a solicitation. The GAO recently issued an opinion which should serve as a warning to all small business joint ventures to make sure to follow all SBA joint venture regulations when bidding on a contract award or potentially risk the award itself.

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GovConFAQ: How Do I Count My Joint Venture’s Receipts When Determining My Size?

Joint ventures are an increasingly common teaming structure in small business federal government contracting. They offer small businesses (and even some SBA-approved large business mentors) the opportunity to perform set-aside contracts as part of a team allowed to leverage the size and status(es) of its managing venturer. But with their growing popularity and obvious appeal amongst the small business community comes the often-asked question of how to calculate a joint venture’s receipts towards its venturers’ sizes. This GovConFAQ provides the answer.

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Important Exception to “Size at Initial Offer” Rule Dooms Award to Mentor-Protégé JV

As a general rule, when it comes to compliance with a solicitation’s size standard, what matters is the size of the entity at the time it submits its initial offer per 13 C.F.R. § 121.404(a). This is something we’ve seen several times before in other cases. However, that is just the general rule, and there are several exceptions that can change things greatly. Indeed, when it comes to compliance with SBA’s joint venture requirements, we noted earlier this year (in a decision that preceded the one we discuss in this post) and before that such is determined at the time of final proposal revisions as opposed to the initial bid. Recently, a mentor-protégé joint venture learned the hard way via a decision from the Court of Federal Claims (COFC) that the initial offer size rule doesn’t change this requirement. Today, we’ll explore that decision.

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Webinar Announcement: Joint Ventures & Teaming, April 23, 2026 hosted by El Paso Texas APEX Accelerators

Please join, government contracts attorneys, Nicole Pottroff and John Holtz from Koprince McCall Pottroff, as they explain how to develop, negotiate and administer agreements that are both compliant and effective. The presentations will cover both the key rules (such as flow-downs and ostensible subcontractor affiliation) and best practices for agreements that go beyond the bare minimum legal requirements. 

Hope you can join us! Registration link here.

Back to Basics: The Two-Year Rule

Something we get asked about a lot with regards to joint ventures is the two-year rule (not to be confused with the “Rule of Two,” which concerns contract set-asides).  We have explored this rule in the past on a few occasions, however, it has been a little while since the last such post and it’s been a perennial issue for contractors that we talk to. As such, it would be helpful to have a refresher on this rule, which may help clear up some of those questions.

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Webinar Announcement: Teaming Agreements & Joint Ventures, April 14, 2026 hosted by UT San Antonio APEX Accelerators

For large and small contractors alike, teaming agreements and joint venture agreements can be essential to winning and successfully performing federal government contracts. In this presentation, government contracts attorneys, Shane McCall and Annie Birney from Koprince McCall Pottroff, will explain how to develop, negotiate and administer agreements that are both compliant and effective. The presentations will cover both the key rules (such as flow-downs and ostensible subcontractor affiliation) and best practices for agreements that go beyond the bare minimum legal requirements. 

Hope you can join us! Registration link here.