It’s been a year of big changes in the government’s SDVOSB programs. First came the Kingdomware Supreme Court decision, which was soon followed by the SBA’s final rule adopting a new “universal” mentor-protege program–and imposing many new requirements on SDVOSB joint ventures.
On Thursday, August 4, 2016 at 1:00 p.m. Central, I will host a free webinar to discuss these important changes. To register, just follow this link and complete the brief electronic form, or call Jen Catloth of Koprince Law LLC at (785) 200-8919.
SDVOSB joint venture agreements will be required to look quite different after August 24, 2016. That’s when a new SBA regulation takes effect–and the new regulation overhauls (and expands upon) the required provisions for SDVOSB joint venture agreements.
The changes made by this proposed rule will affect joint ventures’ eligibility for SDVOSB contracts. It will be imperative that SDVOSBs understand that their old “template” JV agreements will be non-compliant after August 24, and that SDVOSBs and their joint venture partners carefully ensure that their subsequent joint venture agreements comply with all of the new requirements.
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 has proposed to establish a government-wide mentor-protege program available to all small businesses.
In a proposed rule released yesterday, the SBA proposed to establish a single, “universal” mentor-protege program, open to all small businesses, not just those with certain socioeconomic designations. And critically, the SBA’s proposed mentor-protege program would allow SBA-approved mentor-protege joint ventures to qualify as “small” for any federal government prime contract or subcontract–a benefit currently available only to 8(a) companies.
The SBA will “make it a priority” to adopt regulations establishing mentor-protege programs for SDVOSBs, HUBZones, and WOSBs in the next 12 months, according to the SBA’s most recent semiannual regulatory agenda.
The regulatory agenda states that the three new mentor-protege programs are expected to be “similar” to the 8(a) mentor-protege program, which suggests that the special joint venturing benefits currently available only to 8(a)s may become available to SDVOSBs, HUBZones and WOSBs, as well.