8(a) joint ventures are not 8(a) program participants, according to a recent (and commonsense) decision of the SBA Office of Hearings and Appeals.
In its decision, SBA rejected a joint venture’s argument that its 8(a) joint venture agreement was essentially an 8(a) program application, drawing a jurisdictional decision between 8(a) program certification and 8(a) joint venture agreement approval.
SBA 8(a) participants need not obtain the SBA’s prior approval of prime/subcontractor teaming agreements, according to an SBA statement made in a GAO bid protest case.
The SBA’s position makes sense, because the SBA’s regulations only call for prior approval of joint venture agreements. However, one former 8(a) company might be hopping mad over the SBA’s stated position, because that company was terminated from the 8(a) program for–you guessed it–failing to obtain the SBA’s prior approval of a teaming agreement.
A SDVOSB joint venture was not eligible for award of a SDVOB set-aside contract because its joint venture agreement called for certain decisions to be made by supermajority vote.
As explained by the SBA Office of Hearings and Appeals in its decision finding the SDVOSB joint venture ineligible, the supermajority provision undermined the regulatory requirement that a SDVOSB joint venture be managed by an eligible SDVOSB.
The SBA misevaluated a joint venture by basing its ineligibility decision on the joint venture’s revenues, rather than determining whether each joint venturer, individually, qualified as a small business, according to a recent decision of the SBA’s Office of Hearings and Appeals.
SBA OHA’s decision highlights what I like to call the “individual size treatment rule,” a special regulation requiring the SBA to deem a joint venture “small” under certain circumstances, even when the combined sizes of the joint venture’s members exceed the applicable size standard.
Do you want to know more about joint ventures and teaming agreements? Do you want to spend a Friday in November enjoying the warmth of sunny Southern California?
If you answered “yes,” I am pleased to announce that I will be presenting a seminar on “Joint Ventures vs. Teaming Agreements” on November 8, 2013 in Riverside, California. The seminar will offer a “bird’s eye” overview of the key differences between joint ventures and teaming agreements. Attendees will learn “do’s” and “don’ts” when setting up a joint venture or team, common pitfalls, and strategies for success.
The seminar is part of the 10th Annual Veterans Economic and Business Summit. For more information, contact the Riverside Community College District Procurement Assistance Center. Hope to see you there!
Interested in creating compliant and effective joint venture agreements, teaming agreements, and subcontracts? Join me this Friday, March 15, for a free webinar sponsored by Powering Up! Small Business Teams.
The webinar will cover mandatory provisions to include in joint venture agreements under the 8(a), WOSB and SDVOSB programs, required subcontract “flow downs” and other small business teaming requirements. In addition, we will go beyond the minimum legal requirements and discuss best practices for thorough and effective teaming documents–topics such as dispute resolution, termination, exclusivity, non-disclosure of confidential information, and more.
To register for Friday’s free webinar, or find out more information, visit the webinar’s registration page. And if you’re interested in learning more about the ins and outs of small business teaming, mark your calendar for the upcoming teaming webinars in the Powering Up! webinar series.
The SBA 8(a) mentor-protege affiliation “shield” does not prevent a mentor and protege from being affiliated under the so-called ostensible subcontractor rule, according to a recent decision of the SBA Office of Hearings and Appeals.
In Size Appeal of InGenesis, Inc., SBA No. SIZ-5436 (2013), SBA OHA held that the broad exception from affiliation for 8(a) proteges and their mentors does not prevent the SBA from deeming the companies affiliated under the ostensible subcontractor rule.