Tag Archives: joint ventures

8(a) Joint Venture Fraud Allegations Lead to False Claims Act Settlement

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The SBA’s joint venture rules can be strict. Mistakes like failing to update a joint venture agreement, inserting ambiguous provisions in a joint venture agreement, or relying on an expired mentor-protege agreement can be costly.

Good faith mistakes are one thing–the joint venture may lose out on a contract, but probably won’t face other penalties. But when the government believes that a contractor knowingly violated the joint venture rules, the repercussions can be much more serious–as seen in a recent False Claims Act settlement involving allegations of fraud under the 8(a) joint venture regulations.

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Event: Small Business Contracting at Pub K’s Annual Review

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As you make your plans for 2021, be sure to mark down Pub K’s Annual Year In Review. I’m excited to be part of a panel on small business contracting! There are other helpful panels on items ranging from claims to cybersecurity from January 25 through 28, so take a look at the entire schedule.

I’ll be speaking at 3 pm eastern on January 27. The event is free to the public. Check the site for details on how to register.

Check Your Joint Venture Agreements: Under-the-Radar SBA Change Could Cause Problems

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Joint ventures operating under the SBA’s All Small Mentor-Protege Program may need to adjust their joint venture agreements because of a little-noticed change to SBA’s joint venture rules.

In its recent final rule, effective November 16, SBA amended two of the mandatory requirements for mentor-protege joint ventures pursuing small business set-aside contracts. SBA did not make corresponding changes to the joint venture rules for SBA’s four major socioeconomic programs–meaning that a joint venture agreement that complies with the small business set-aside rules may not be valid if the joint venture pursues 8(a), SDVOSB/VOSB, HUBZone or WOSB/EDWOSB contracts (and vice versa).

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Congress Says Small Businesses Without Past Performance Can Submit Joint Venture Experience Instead

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Per the 2021 NDAA that was recently approved by Congress, small business offerors without their own past performance experience can now submit experience earned as part of a joint venture–and the procuring agency must consider it. This change will significantly benefit newer companies that do not yet have the individual experience to successfully compete for government contracts (that is, assuming the President signs the NDAA). It will also add an incentive for start-up companies to take advantage of SBA’s joint venture opportunities.

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SBA Rule Tamps Down Joint Venture Unequivocal Control Requirement

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The SBA’s new rule on Consolidation of Mentor-Protégé Programs contained a lot of updates. One of those concerned the level of control that a lead joint venture member has to have over a joint venture.

In particular, SBA now says that the lead venturer doesn’t have to have unequivocal control as the Office of Hearings and Appeals had suggested in the past. The other joint venture partners can have some say in the joint venture, but how much?

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

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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

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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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