at 12 (affirming determination that joint venture offeror was not small because its agreement’s failure to meet requirements resulted in affiliation of the JV members) Kisan-Pike, a Joint Venture, SBA No.
If the joint venture agreement does not meet those standards, the exception does not apply and the two entities are affiliates-and most likely ineligible to bid as a small business. Among those requirements, the joint venture agreement must (a) “tem all major equipment, facilities, and other resources to be furnished under the contract by each party to the joint venture, with a detailed schedule of its cost or value” and (b) “specify the responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, including ways that the parties to the joint venture will ensure that the joint venture and the 8(a) partner(s) will. Participants in the SBA’s mentor-protégé program, however, can form joint ventures without causing affiliation when the joint venture agreement meets certain regulatory requirements. Generally, members of a joint venture are considered “affiliates” for small business purposes, which is often sufficient to eliminate a business concern’s small business eligibility. When the SBA measures size to determine eligibility as a small business, it considers the concern at issue and all of the concern’s affiliates. Instead, as a matter of meeting both regulatory requirements and best practice, mentor/protégé joint venture agreements should specifically list all resources, equipment and facilities (and their estimated values) that each party will provide and detail how work will be shared between the joint venture members.Īffiliation Exception for Mentor-Protégé Joint Ventures And like anything of great value, it should not be taken for granted. Those agreements, in many cases, are the crown jewel of the mentor-protégé program enabling mentors and protégés to work together on set-aside opportunities that they would not otherwise have been eligible. Recent decisions by the Small Business Administration (“SBA”) Office of Hearings and Appeals (“OHA”) and the Court of Federal Claims offer important advice to anyone in the process of drafting and negotiating a mentor/protégé joint venture agreement: Be specific.