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SBA Joint Venture and Teaming Agreements. SBA . Legal Requirements. The regulatory requirements for 8(a) Joint Venture Agreements are found in 13 CFR § 124.513 Standard Operating Procedures (SOP) 80-50-3, p. 151-164. Legal Requirement. Definition of Joint Venture:

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Presentation Transcript
legal requirements
Legal Requirements

The regulatory requirements for 8(a) Joint Venture Agreements are found in

  • 13 CFR § 124.513
  • Standard Operating Procedures (SOP) 80-50-3, p. 151-164
legal requirement
Legal Requirement

Definition of Joint Venture:

Joint Venture Agreement (JVA) is an agreement between an eligible 8(a) participant and one or more other business concerns to establish a new legal entity solely for the purpose of performing aspecific 8(a) contract.

slide4

JVA are permitted when:

  • 8(a) participant lacks capacity;
  • JV arrangement is fair and equitable;
  • JV will be of substantial benefit to 8(a) participant; and
  • 8(a) participant brings substantial resources and/or expertise to the JV
slide5

Size Determination

What is considered small and eligible for JVA?

  • Competitive 8(a) procurements
    • Each concern is small under the size standard corresponding to the NAICS code assigned to the contract.
    • The size of at least one 8(a) participant is less than ½ of the size standard corresponding to the NAICS code for the contract.
size determination
Size Determination

Competitive 8(a) procurements

  • For a procurement having a revenue-based size standard, the procurement exceeds half the size standards
  • For a procurement having an employee-based size standard, the procurement exceeds $10 million.
size determination1
Size Determination
  • For Sole source & competitive 8(a) procurements that do not exceed the dollar levels.
    • Combine the annual receipts or employees to determine if it meets the size standard for the NAICS code assigned to the 8(a) contract.
size determination2
Size Determination
  • Mentor-Protégé JVA
    • Exception to the size requirement;
    • Size of the JV is deemed small provided the protégé qualifies as small for the size standard for the NAICS code assigned to the 8(a) contract.
processing the jva
Processing the JVA

The package must include:

  • Joint Venture Agreement
  • 3 years of signed tax returns and year end financial statements from all parties
  • A letter from managing participant as to capacity; benefits, and resources of the 8(a) participant
  • Supplemental information. See SOP 80-50-3, p. 155-58.
joint venture agreement provisions
Joint Venture Agreement provisions

Agreement is a legal document between the parties and should include the following :

  • Purpose
  • Designate 8(a) participant as the managing venturer and an employee as project manager
  • Establishment of bank account in the name of the Joint Venture
  • Itemize all major equipment, facilities and other resources
  • Specify responsibilities of the parties with regard to contract performance, negotiation and source of labor
joint venture agreement provisions1
Joint Venture Agreement provisions

continued…

  • Obligating all parties to ensure performance of the 8(a) contract
  • Designate accounting and other administrative records to be kept at the office of the managing venturer, unless DD otherwise grants a waiver.
  • Final original records to be retained by managing venturer
  • Stating that quarterly financial statements must be submitted to SBA within 45 days after each operating quarter
joint venture agreement provisions2
Joint Venture Agreement provisions

continued..

  • State that project end profit and loss statement be submitted to SBA within 90 days after completion of the contract.
  • A statement that JV will perform work in such percentages as required by 124.510 ( 50% for services & supplies; 15% for General Construction; 25% for special trades)
review process for jva
Review Process for JVA

District Office Approval-

  • Business Development Specialist reviews the package and makes recommendation
  • District Counsel reviews and makes recommendation
  • District Director has final approval authority
post approval requirements
Post Approval Requirements

After JVA has been approved-

  • Post approval reviews are done concurrently with the 8(a) participant’s annual reviews.
  • This agreement can be used to submit to multiple offers but limited to 3 awards over a 2 year period starting from the date of the first offer (13 CFR § 121.103(h))
teaming agreements
Teaming Agreements

A teaming arrangement may be a arrangement in which a potential prime contractor agrees with one or more companies to have them act as its subcontractors under a specified Government contract or acquisition program or it can be a JVA.

teaming agreements1
Teaming Agreements

A teaming arrangement does not necessarily need to be reviewed by SBA, however it must be carefully evaluated to determine the relationship of the parties, as it may affect a participant’s eligibility if it results in actual or negative control, affiliation or loss of small business status.

questions
Questions
  • Teaming
  • WOSB