GovCon FAQs: Do I need an SBA MPA for a JV?

We at SmallGovCon are excited to announce this first in a new line of blogs we call GovCon FAQs. Our firm handles a wide variety of federal procurement and contract matters, from bid protests, size protests, joint ventures, socio-economic certifications, to everything in between. Often, when talking to blog readers and contractors we hear the same sort of questions pop up. Of course, we can only provide direct legal advice to our clients. But many of these questions hit on issues that face contractors as a whole, or are items that are commonly misunderstood. So, we decided contractors needed an FAQ page for those common general questions. This blog will kick off that FAQ page for contractors. The first big frequently asked question:

Do I need an SBA Mentor-Protege Agreement to form a joint venture and perform on federal contracts as a joint venture?

Continue reading

Are Mentor-Protégé Joint Ventures Just Too Successful, Asks SBA

SBA recently issued a proposed rule purportedly concerning the HUBZone Program and its regulations–but actually, covering a bevy of other discussions and proposed changes relating to size, SBA’s other small business socioeconomic programs, and even teaming. Specifically, regarding teaming, SBA revealed that it has apparently decided to take a deeper look into the immense success of mentor-protégé joint venture teaming. It is also requesting comments on this concern, as well as potential policy changes for joint venturing in SBA programs, more generally.

Continue reading

SBA Proposed Rule: Joint Venture Past Performance

How agencies evaluate past performance of joint ventures has been a somewhat confusing topic for federal contractors over the past few years. We’ve written about many of the key aspects of the evolution of this rule on SmallGovCon, from the earlier final rule to recent decisions interpreting that rule. The proposed rule would clarify how SBA thinks agencies should review past performance for joint ventures, but it also invites comment from contractors. This is an area where input from the federal contracting community could really have an impact on the final version of SBA’s rule.

Continue reading

GAO Reminder: Joint Ventures Must Register on SAM

SAM.gov is like the home base of federal government contracting. Everything in federal government contracting seems to either start there, or require using SAM in some fashion. As a consequence, contractors are expected to register on SAM to work in federal contracting. However, it can be easy to overlook registering a joint venture entity on SAM, when contractors making up the joint venture are already registered on SAM. GAO recently took the opportunity to remind contractors of the need to register their joint venture separately on SAM through a bid protest decision.

Continue reading

Webinar! Joint Venture and Teaming, July 9, 2024, 10:00-11:30am MDT

Please join John Holtz and me, for this informative webinar hosted by Texas El Paso APEX Accelerators as we discuss joint venture agreements and teaming. 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, we 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. Register here.

Another One Bites the Dust: Incomplete Joint Venture Agreement Fails Once Again

Once again, an initial awardee has had its award revoked because of a noncompliant joint venture agreement addendum. We see it happen regularly at SmallGovCon. And the decision in Colt-Sunbelt Rentals JV, LLC is yet another data point highlighting that SBA requires strict adherence to the joint venture agreement requirements in 13 C.F.R. § 125.8. Here, an incomplete joint venture agreement and its addendum resulted in a finding of affiliation which resulted in Colt-Sunbelt losing its small business status for the contract at issue.

Continue reading

Extraordinary Actions v. Day-to-Day Decisions for Joint Ventures: A Cautionary Tale

Back in 2020, we discussed an SBA Office of Hearings and Appeals (OHA) decision stating that the managing venturer must control every aspect of the joint venture. This position, which we questioned in that article, has changed since that time, and we explored the changes to the regulatory language in question not long thereafter. But this regulatory language was still vague. Since that time, there has been much case law development. The Court of Federal Claims (COFC) held in 2022, “[a] minority owner’s control over “extraordinary” actions, such as actions intended to protect the investment of minority shareholders, will not result in a finding of negative control” and applied this idea to a populated joint venture. Swift & Staley, Inc. v. United States, No. 21-1279, 2022 WL 1231428 (Fed. Cl. Mar. 31, 2022), aff’d, No. 2022-1601, 2022 WL 17576348 (Fed. Cir. Dec. 12, 2022). It now appears, fairly established at this point, that non-managing venturers can have a say in what can best be described as “extraordinary actions.” These are the sorts of decisions that can completely change the trajectory of the joint venture. But contractors must still be very careful in giving the non-managing venturer a say in the joint venture’s decisions. As one firm learned the hard way in a recent COFC case, a joint venture with too many actions controllable by the non-managing venturer may end up ineligible for set-asides. Here, we explore this decision.

Continue reading