joint venture agreement lawyersWatson & Associates, LLC government contract joint venture attorneys help clients with the various nuances and legal pitfalls that arise when drafting joint venture agreements.  When the competition challenges your business relationships under SBA rules, we bring decades of experience litigating the complex issues involved when small businesses enter into a JV.

When the SBA or federal law enforcement agency’s (IG or DOJ) question your business relationships, our procurement professionals can bring meaningful insight to your case.

Many of our joint venture agreement lawyers are former government contract agency personnel and understand the relevant regulations.

When drafting joint venture agreements, it must be specific to the contract award and the parties’ capabilities. When there is a Mentor Protégé relationship involved, the JV contract is specifically important. This is where our joint venture lawyers and federal contract attorneys can help.

Avoiding Costly Mistakes in JV Contract Relationships

With decades of experience in government contracts and federal small business rules, Watson & Associates’ lawyers have substantial legal experience to provide direction and sound legal counsel to small businesses involved with JV agreements.

Our involvement begins with examining potential business relationships at the initial stages and goes all the way to bid protests and other agency challenges. When the SBA or agency challenges the JV contract relationship, our small business lawyers immediately get to the source of the dispute and aggressively represent our client’s interest.

As federal contracting and joint venture agreement attorneys, we understand that sometimes it takes experience and knowledge of more than one aspect of government contract law to resolve pending disputes before the agency or court.

Nationwide SBA Joint Venture Attorney Services

As federal small business joint venture consultants and lawyers, we help to:

  • Draft a template JV agreement tailored for your specific business;
  • Help with SBA application procedures
  • Compliance with SBA JV definition and applicable JV rules and regulations;
  • Breach of contract and Legal Counsel
  • Draft a JV template that focuses on avoiding SBA affiliation;
  • Assess the risks of JV relationships;
  • Analyze the new rules for substantive adjustments to the business entity structure;
  • Interpret SBA regulations and provide sound legal direction to participating companies;
  • Help with SBA JV regulations and contribution to the JV
  • SBA OHA Appeals involving teaming and JV relationships
  • Terminations for default
  • Assess the JV agreement structure for unpopulated relationships
  • Government contract fraud with JV arrangements
  • Draft and review your memorandum of understanding
  • Due diligence and JV partners agreement and accounting matters
  • Litigate disputes and allegations of affiliation, violation of the Ostensible Subcontractor Rule; and
  • Government Contracts Procedure and Appeal of adverse SBA decisions. See SBA Size Protests & Small Business Size Standard Appeals

Speak in Confidence With Watson & Associates, LLC Joint Venture Attorneys at 1-866-601-5518 for a Free Initial Consultation.

Contents of Your Joint Venture Agreement

This is a very important aspect of developing JV agreements. Most government contractors simply copy the SBA mentor protege joint venture agreement templates. However, you are still responsible for the contents of the agreement.

There are severe consequences for not following the statutory guidelines:

In accordance with 13 CFR 125.8 each joint venture must contain certain key points. If not, your  company can suffer severe consequences including losing the contract or being found affiliated under SBA rules for not following the JV governing law. For example in the case of

Size Appeal of DSC-EMI Maintenance Solutions, LLC, Native Energy and Technology, Inc., SBA No. SIZ-6096 (2021) (the SBA Office of Hearings and Appeals upheld the Area Office’s decision that the mentor-protégé joint venture agreement did not comply with requirements for such agreements because it did not identify the responsibilities of the parties for providing an important component of the work on the contract resulting from the solicitation.

In another case, Size Appeal of KTS Solutions, Inc., SBA No. SIZ-6049 (2020)  SBA OHA ruled that the mentor-protégé joint venture agreement failed to meet the requirements of 13 CFR 125.18(b)(2)(vi) and (vii) because it did not:

(i) itemize the equipment to be used in the performance of the contract;

(ii) specify the responsibilities of the parties with respect to negotiation of the contract, source of labor, and contract performance; and

(iii) indicate the tasks that each member of the joint venture would perform on the contract, or which employees of each member would perform the functions) .

Having the right government contracts lawyer to assist the your compliance requirements can save you a substantial amount of time and money.

JV Performance of work – Do you have a legal joint venture agreement in place?

Despite having the contents in place, other small business find themselves involved in government investigations from the IG or DOJ because they do not perform that proper amount of work in the JV relationship. As a result, there can be allegations and penalties for not having a legal joint venture agreement.

(1) For any contract set aside or reserved for small business that is to be performed by a joint venture between a small business protégé and its SBA-approved mentor authorized by § 125.9, the joint venture must perform the applicable percentage of work required by § 125.6, and the small business partner to the joint venture must perform at least 40% of the work performed by the joint venture. Except as set forth in paragraph (c)(4) of this section, the 40% calculation for protégé workshare follows the same rules as those set forth in § 125.6 concerning supplies, construction, and mixed contracts, including the exclusion of the same costs from the limitation on subcontracting calculation (e.g., cost of materials excluded from the calculation in construction contracts).

(2) The work performed by the small business partner to a joint venture must be more than administrative or ministerial functions so that it gains substantive experience.

(3) The amount of work done by the partners will be aggregated and the work done by the small business protégé partner must be at least 40% of the total done by the partners. In determining the amount of work done by a mentor participating in a joint venture with a small business protégé, all work done by the mentor and any of its affiliates at any subcontracting tier will be counted.

(4) Work performed by a similarly situated entity will not count toward the requirement that a protégé must perform at least 40% of the work performed by a joint venture.

Help With Joint Venture Mentor-Protégé Program Agreements

Watson & Associates’ SBA JV lawyers also represent clients involved in a mentor protege relationship. Specifically, we help with compliance with the legal requirements of Title 13 of the Code of Federal Regulations. They include 13 CFR 124.513, 13 CFR 125.8, 13 CFR 125.9, 13 CFR 125.18, 126.616, and 13 CFR 127.506.

As JV contract attorneys, we help the venturing parties to comply with the guidance provided by the U.S. Small Business Administration (“SBA”). Small businesses seeking to draft JV Contract Agreements and bid on Federal Government contracts must understand the requirements for JV agreement. When the parties are found to have violated procurement laws, then they stand to be found affiliated and may forfeit the contract due to non-compliance with the NAICS Code size standards. 

Government Contracts Litigation

Watson & Associates’ experience and reputation allow our joint venture attorneys to address the complex legal issues that involve SDVOSB joint ventures, SBA 8(a) JV relationships and drafting HUBZone arrangements.

Mentors and proteges involved in government procurement investigations utilize our experience during litigation and appeals to the various courts including the Small Business Administration, SBA Office of Hearings and Appeals (SBA OHA), U.S. Court of Federal Claim and U.S. Court of Appeals for the Federal Circuit.

Bid Protests Involving  Small Business  Joint Venture Agreements: After contractors submit a bid for a federal government contract, the competition may challenge the business arrangements and compliance with the requite SBA regulations. Our government contract joint venture law firm at Watson & Associates provides legal counsel on relevant issues such as Limitations on subcontracting, Similarly situated small businesses, compliance with SBA JV agreement regulations and more.

Avoid adverse business control decisions: The regulations mandate that all JV agreements to provide for making sure that the qualifying small business is the Managing Venturer of the Joint Venture and an employee of the small business managing venturer as the project manager responsible for the performance of related government contract.  

To avoid business control problems, the agreement must also provide for how management decisions will be made (i.e., who can vote, how actions will be taken, whether the powers to control and manage the JV  can be delegated, how the managing Venturer’s presence is required to obtain a quorum, etc.).  See SBA’s regulations (13 CFR 124.513(c)(2), 125.8(b)(2)(ii), 125.18(b)(2(ii), 126.616(c)(2), and 127.506(c)(2)

SDVOSB Joint Venture Agreements

When small businesses decide to engage in SDVOSB relationships, CEO’s must be extremely careful in forming the relationships and drafting joint ventures and contractual contents.

When it comes to meeting the government’s requirements for joint venture contracts, common legal issues arise when your SDVOSB Joint venture agreements do not have the requisite language. One clause that is critical is the fact that the entity must receive profits from the venturing which matches the required amount of work done by the SDVOSB. See also 13 CFR 125.18(b)(2)(iv).

Important tip

Other important aspects of the joint venture arrangement between the SDVOSB and its joint venture partner include:

  • A JV need not meet the eligibility requirements of 13 CFR 125.12 and 125.13 but must meet the specific terms and conditions governing joint ventures found at 13 CFR 125.18 (b)(2).
  • The regulations do not require the VOSB/SDVOSB members of the joint venture to possess the critical licenses needed for a JV to perform a contract.
  • The SBA regulations do not contain provisions for finding one company unusually reliant upon another.

If companies are going to submit bids for government contracts for SDVOSB procurements, the entity may want to consider sending to the Contracting Officer an amendment to the JV agreement contract to conform to the specific statutory requirements.  See 13 CFR 125.18 (b)(2). What requirements must an SDVO SBC meet to submit an offer on a contract?

Call Our SBA Joint Venture Attorneys

If your company is seeking to avoid liability when involved in JV and strategic alliances, need help with joint venture due diligence and compliance with SBA JV agreement rules, or need legal advice building strategic alliances to acquire and perform government contracts, call a government procurement lawyer and SBA joint venture lawyers at Watson & Associates, LLC. Call 1-866-601-5518 for a free initial consultation.