![]() The new SBA rules have changed allowance for different types of JVs and extinguished allowance for populated JV strategies. No Populated Joint Venture Structure: Having a populated JV government contracts structure means that companies could staff the JV with employees. See more information about affiliation under new rules. Under the guidelines and SBA application process, a small business of two or more businesses can submit an offer as a small business for federal procurement, subcontract or sale so long as each concern is small under the small business size standards corresponding to the NAICS code assigned to the contract. 13 CFR 124 and FAR 9.6 are the fundamental laws that govern SBA JV arrangements. However, the new SBA JV rulesreduce the implication of affiliation. ![]() Previous SBA rules automatically presume the partnering as small businesses to be affiliated. To be qualified, the joint venture agreement must contain all statutory requirements including obligations and performance assignments. For 8(a) certified companies, it is essential that the SBA approves the JV structure and the JV contract. SBA Joint Venture Definition and JV Requirements: Under SBA requirements, all government contractors must have an executed agreement in place. The regulations governing joint ventures formed under SBA MPP are explained in detail in 13 CFR 125.8 and 13 CFR 125.9. Note, the protégé is the responsible party for reporting the evaluation under its DUNS number. Respective, annual reports and project-end reports are due 45 days after each operating year and 90 days after completion of the contract. Annual evaluations are due 30 days from the anniversary date on your welcome letter. The joint venture must submit annual evaluation reports, annual performance-of-work statements, and project-end performance-of-work to SBA and the contracting agencies explaining how the work is being performed for each contract.The JV may also pursue any type of set-aside contract for which the protégé qualifies, including contracts set aside for 8(a), service-disabled veteran-owned, woman-owned, and HUBZone businesses. If qualifying in an MP relationship, a mentor and its protégé can joint venture as a small business for any small business government contract, so long as the small protégé individually qualifies as small. When bidding on federal government contracts the JV entity can use both company’s past performance, share contract costs and each company’s resources. What is a Joint Venture? Under SBA guidelines, the rules are allowed so that small business can take certain benefits when doing business with the government. In fact, when bidding on federal government contracts, it is the JV entity that is the actual bidder and not either of the venturing businesses. Under the SBA joint venture definition, joint ventures in government contracting is regarded as a separate business entity in the eyes of the government. ![]() One important requirement is that each concern is small under the size standard corresponding to the NAICS code assigned to the contract, or qualify as small under one of the exceptions to affiliation set forth in § 121.103(h)(3). The legal definition of a joint venture JV for purposes of a federal government contract is an arrangement where two or more companies enter into a JV relationship and partnership agreement for the sole purpose of bidding on and performing a federal government contract. In some situations, the Department of Justice (DOJ) has brought criminal charges against small businesses involving improper joint venture agreements for government contracting and mentor-protege relationships. Improper joint venture relationships can lead to affiliation and contracts being revoked. ![]() Is your company qualified under SBA joint venture regulations? Do you legally meet the joint venture definition? Understand the rules and get your company better positioned when bidding on federal government contracts.
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