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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SBA OHA: On Second Thought, Managing Venturer Must Still be in Charge of JV
A few months back, we discussed a case at SBA’s Office of Hearings and Appeals that took a closer look at the actions that a Non-Managing Venturer in a small business joint venture is permitted to have negative control over—that is, those actions which the Non-Managing Venturer’s disapproval can block from happening. It also addressed what happens when a joint venture agreement does not include all of the provisions that the SBA rules require for a mentor-protégé joint venture agreement under the SBA’s Mentor-Protégé Program to avoid affiliation. Following that decision, the matter was brought to the Court of Federal Claims. Below, we discuss Multimedia Environmental Compliance Group JV v. United States, 178 Fed. Cl. 129 (2025) which covers the COFC’s review of the OHA decision.
That case reaffirmed that just having required control language in a JV isn’t enough, other provisions in the JVA cannot give inordinate control to the Non-Managing Venturer.
Continue readingOHA: JV Violates Two-Year Rule, Loses Award
The joint venture two-year rule always generates a lot of questions. But it’s an important one for small business joint venture members to understand and comply with. A recent decision from the Small Business Administration Office of Hearings and Appeals (OHA) shows why. In the case, a joint venture lost an award because it violated the two-year rule.
Continue readingJoint Venture Agreement Fails for Lack of Detail–And Too Much Detail on Venturer Control
A joint venture agreement must closely follow Small Business Administration rules to be compliant for a small business set-aside. And SBA interprets those rules strictly. If they are not followed, a joint venture that was up for award, can see that award go up in smoke. Here, SBA said that a joint venture involving a Service-Disabled Veteran-Owned Small Business (SDVOSB) was not compliant because it was both (a) not specific enough and (b) too detailed in providing for oversight of actions of the JV partners.
Continue readingSBA Proposed Rule Relaxes Change of 8(a) Program Ownership, Allows Limited Populated Joint Ventures
The SBA has issued new proposed rules relating to the 8(a) Program. The rules clarify some aspects of ownership and control requirements for the 8(a) Program, including making change of ownership a little easier and cleaning up some 8(a) set-aside processes. The rule would also allow for populated joint ventures between similarly situated joint venture members.
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