Small businesses will be able to joint venture with one another more often under a new SBA rule.
As part of a recent major rulemaking, the SBA will allow two or more small businesses to joint venture for any procurement without being affiliated with regard to the performance of that requirement.
An 8(a) joint venture was unable to show that its mentor-protege agreement had been renewed by the SBA for a particular year–and the missing reauthorization caused the joint venture to be ineligible for a small business set-aside contract.
In a recent decision, the SBA’s Office of Hearings and Appeals held that an 8(a) joint venture could not avail itself of the mentor-protege exemption from affiliation when there was no evidence to show that the SBA had renewed the mentor-protege relationship for the year in which the joint venture’s proposal was submitted.
An 8(a) mentor-protege joint venture didn’t qualify for an SDVOSB set-aside because the mentor firm was not a small business.
In a recent decision, the SBA Office of Hearings and Appeals held that a SDVOSB-specific regulation requires all members of an SDVOSB joint venture to be small–notwithstanding language in the SBA’s size regulations and 8(a) Program regulations specifying that an SBA-approved mentor-protege joint venture may bid, as a small business, on any government contractor or subcontract, provided that the protege is small.
The SBA’s Utah District Office has imposed tough new restrictions on the approval of 8(a) mentor-protege agreements and joint ventures.
The Utah SBA obviously hopes that these restrictions will lead to more successful 8(a) mentor-protege and joint venture relationships–but I worry that these District-specific restrictions may backfire, and put Utah 8(a)s at a significant competitive disadvantage against 8(a)s serviced by other SBA District Offices.
I am pleased to announce that I will be presenting three Learning Sessions at the 2015 National Veterans Small Business Engagement in Pittsburgh.
My first session, Joint Venturing and Teaming on SDVOSB Set-Aside Contracts, will take place on November 17 at 11:10 a.m. in Room 333. The second session, The SBA’s Proposed New “Universal” Mentor-Protege Program, will be that same day at 3:10 p.m. in Room 413. The third session, Is My Company a “Non-Manufacturer”–The Ins and Outs of the Non-Manufacturer Rule will be held on November 18 at 11:10 a.m. in Room 413.
If you will be attending NVSBE 2015, I hope you’ll make it to my Learning Sessions. See you at the conference!
An 8(a) mentor-protege joint venture was not entitled to take advantage of the special mentor-protege exception from affiliation because the joint venture agreement lacked adequate detail.
In a recent decision, the U.S. Court of Federal Claims held that the SBA had reasonably determined the joint venture to be a large business because the joint venture agreement did not sufficiently address certain requirements. The Court’s decision should be a warning for all 8(a) mentor-protege joint ventures: details matter.
The SBA has proposed major changes to rules governing joint venturing for set-aside contracts.
As part of a proposed rule released last week, the SBA proposes to eliminate so-called “populated” joint ventures, and proposes additional changes regarding joint venture certifications, performance of work reports, and more.