8(A)
JOINT VENTURE
AGREEMENTS ::
To
facilitate access to larger government contract opportunities, companies
admitted to the 8(a) program are permitted to negotiate and enter into
joint venture agreements with other small business concerns. This
page provides information about how the 8(a) Joint Venture program
works.
| General
Rule |
|
If
approved by the SBA, an 8(a) company may enter into a joint
venture agreement with one or more small business concerns
(whether or not 8(a) certified) for the purpose of performing a
specific 8(a) contract. This provision permits an 8(a) company
to receive award of a government contract that would otherwise
be too large to perform alone.
|
| How
JV Agreements Work |
|
| In
order to limit abuse, the SBA imposes certain restrictions on
joint venture agreements. For example, such agreements are
permissible only when an 8(a) company lacks the necessary
capacity to perform the contract on its own. The SBA must
review and approve the joint venture agreement before the
targeted contract is awarded. An important element of the SBA review
process is to ensure that a joint venture agreement is fair and equitable,
and will be of substantial benefit to the 8(a)
company.
Once
approved by the SBA, the joint venture receives the go-ahead to
enter into a sole-source or competitive 8(a) contract with a
government agency. The contract is awarded in the name of
the joint venture. However, the 8(a) company is required to be
designated as the "managing venturer" of the joint
venture. Certain other important requirements and
restrictions apply in the award and performance of an 8(a) joint
venture contract.
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| Need
Help? |
|
8(a)
companies can reap major benefits through forming joint venture relationships
in pursuit of government contract opportunities. However, the risks of
establishing such relationships without appropriate legal advice are high. A
company that establishes and pursues joint venture opportunities
in violation of the requirements of the SBA may be
subject to suspension or termination from the 8(a)
program. For assistance in forming a joint venture
relationship with another small business concern, contact
us for a consultation.
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