PilieroMazza: Why the Content of a Contractor’s Joint Venture Agreement Matters

The Small Business Administration’s (SBA) joint venture (JV) regulations allow large businesses to perform set-aside contracts with their small business protégés and allow small businesses to pool their resources and experience to compete for set-aside work they would not independently qualify for. However, these JVs must strictly comply with SBA’s JV regulations. Among other things, this means each JV must have a JV agreement (JVA) that checks a litany of regulatory boxes. A recent SBA Office of Hearings and Appeals (OHA) case underscores just how carefully these agreements must be drafted and the costly risks to small government contractors, including ineligibility to receive an award…

In its appeal, the Appellant argued that NWI&T’s JVA was deficient and, in finding NWI&T eligible for award, SBA improperly considered the JVA Addendum, which was submitted weeks after final proposal revisions. In comments submitted in response to the appeal, SBA agreed that without the JVA Addendum, NWI&T’s JVA was deficient. Notably, however, SBA argued that consideration of the JVA Addendum was proper and rendered NWI&T eligible for award because, according to SBA, when an agency requests updates to a proposal—regardless of whether the request asks for an updated JVA—it is appropriate for the agency to consider JVA updates and changes until the date of the final proposal revision, even if the final proposal revision is made after notification of award. OHA disagreed.

OHA’s Decision First, OHA held that without the JVA Addendum, NWI&T’s JVA did not contain sufficient detail to satisfy SBA’s regulations. In particular, OHA explained that the JVA:



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