Washington Metropolitan Area District Office - Mount Vernon

Report
SBA
Washington Metropolitan Area District Office
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
Washington Metropolitan Area District Office
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 a specific 8(a) contract.
Washington Metropolitan Area District Office
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
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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.
Washington Metropolitan Area District Office
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.
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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.
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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.
Washington Metropolitan Area District Office
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.
Washington Metropolitan Area District Office
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
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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
Washington Metropolitan Area District Office
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)
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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
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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))
Washington Metropolitan Area District Office
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.
Washington Metropolitan Area District Office
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.
Washington Metropolitan Area District Office
Questions
 Teaming
 WOSB
Washington Metropolitan Area District Office

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