Joint Ventures in Government Contracting

Strategies & Legal Considerations

Joint Ventures in Government Contracting

Agenda
Introductions Presentation Q&A

Joint Ventures in Government Contracting

Introductions:
Fed Bid Speed Fierce Government Mark A. Amadeo Amadeo Law Firm, PLLC Jennifer Schaus JS & Associates

Joint Ventures in Government Contracting

Fed Bid Speed
* Software program to manage B2G Opps * Single click integration with FBO.gov * Share notes & project manage RFPs

Joint Ventures in Government Contracting

Fierce Government
* * * * Free Govt IT Newsletter IT in Govt Agencies / Defense / Cloud / Cyber White Papers / Events / Analysis In-depth & Quality = Differentiator

Joint Ventures in Government Contracting

Amadeo Law Firm, PLLC
* Local and Federal Contracting * Employee Benefits * Employment

Joint Ventures in Government Contracting

Jennifer Schaus & Associates
B2G Services and Events
GSA Schedules Federal Sales / Marketing

Joint Ventures in Government Contracting

Joint Ventures in Government Contracting

TEAMING
Two Types of Teaming Arrangements Under FAR (9.601)
Vertical (Prime-Sub) A potential prime contractor agrees with one or more other companies to have them act as its subcontractors under a specified Government contract or acquisition program. Horizontal (JV) Two or more companies form a partnership or joint venture to act as a potential prime contractor.

Joint Ventures in Government Contracting

TEAMING
Why Government Approves of Teaming Arrangements
FAR 9.602 (a) Contractor team arrangements may be desirable from both a Government and industry standpoint in order to enable the companies involved to (1) Complement each others unique capabilities; and (2) Offer the Government the best combination of performance, cost, and delivery for the system or product being acquired.

Joint Ventures in Government Contracting

Joint Ventures in Government Contracting

Competitive Benefits Small Businesses
Joint Venture Rules Ease Tension General Rules of Affiliation Revenues and # employees are combined for small biz size standard Joint venture parties are deemed affiliated Relaxed JV Rules Exceptions to affiliation: Considered small even if combined size > size standard Businesses participate in contracts dont typically qualify for alone

Joint Ventures in Government Contracting

Competitive Benefits Small Businesses
Exceptions to Affiliation 8(a) & Small Businesses Small Business Joint Ventures Competing for Larger Contracts Applies To: bundled contracts, contracts over $10 million (when size standard is based on # employees), or contracts that are greater than the size standard (when size standard is based on revenue) Requirement: Each JV participant must be small under the size standard for the contract

Joint Ventures in Government Contracting

Competitive Benefits Small Businesses
Exceptions to Affiliation 8(a) & Small Businesses 8(a) Joint Ventures Competing For Larger 8(a) Contracts Applies To: Contracts set aside for 8(a) businesses as long as contract is either greater than $10M (when size standard is based on # employees) or greater than the size standard (when size standard is based on revenue) Requirements: Each JV company must be small under the size standard for the contract At least one JV company must be an 8(a) business At least one 8(a) business must be very small (i.e., less than half the size standard)

Joint Ventures in Government Contracting

Competitive Benefits Small Businesses
Exceptions to Affiliation 8(a) & Small Businesses 8(a) Mentor-Protg Joint Ventures Applies To: Any contract with a small business requirement, including 8(a) contract Requirements: Mentor and protg approved by SBA under the mentor-protg program 8(a) Protg meets the size standard for the contract **Mentor can be any size

Joint Ventures in Government Contracting

Competitive Benefits Small Businesses
Exceptions to Affiliation Other Joint Ventures

HUBZone Joint Ventures SDVOSB Joint Ventures

Joint Ventures in Government Contracting

Competitive Benefits Small Businesses
Limits To Relaxed Rules On Affiliation
3 in 2 Rule: Joint venture can engage in and carry out no more than three specific or limited-purpose business ventures for profit over a two year period But . . . No limit on number of JVs that same JV participants can form

Joint Ventures in Government Contracting

Competitive Benefits Small Businesses
Even if Affiliation Applies - Businesses Participate In Contracts Dont Qualify For Alone 8(a) Joint Ventures Competing For Smaller 8(a) Contracts Applies To: 8 (a) set-aside contracts that are too small to qualify for affiliation exception Requirements: Each JV company must be small under the size standard for the contract At least one JV company must be an 8(a) business At least one 8(a) business must be very small (i.e., less than half the size standard)

Joint Ventures in Government Contracting

Competitive Benefits Small Businesses
Even if Affiliation Applies - Businesses Participate In Contracts Dont Qualify For Alone EDWOSB /WOSB Joint Ventures Competing For Smaller Contracts SDVOSB Joint Ventures Competing For Smaller Contracts

Joint Ventures in Government Contracting

Competitive Benefits Small Businesses
Additional Requirements On Any Joint Venture Competing For An 8(a) Contract SBA approval of JV agreement before award Unpopulated: 8(a) partner(s) must do at least 40% of the work JV may subcontract to non 8(a) partner(s), if subcontracts 40% work to 8(a) Populated: 8(a) partner(s) must show what it gains + business development

Non-8(a) partners cannot be subcontractors to the JV

Joint Ventures in Government Contracting

Joint Venture Agreement Requirements
Example: Joint Venture Agreement to Perform 8(a) Contracts
(1) State purpose of JV (2) Designate 8(a) participant as managing venture and an employee of managing venture as project manager (3) State that not less than 51% of net profits will be distributed to 8(a) participant(s) (4) Provide for special bank account in name of JV; signatures of all JV participants for withdrawals; used for payments on contract and contract expenses (5) Include itemized list of equipment, facilities and resources provided by each JV participant, with cost and value for each (6) Specify responsibilities of parties regarding contract performance, labor source & contract negotiation (7) State all parties are obligated for performance despite any withdrawal by any JV participant (8) Designate accounting and administrative records to be maintained by managing venture (9) Require original records to be maintained by managing venturer upon contract completion (10) State that quarterly financial statements will be submitted to SBA within 45 days of each quarter (11) State that project end profit-loss & distribution statements will be submitted to SBA within 90 days of project completion

Joint Ventures in Government Contracting

Final Thoughts
Consistent with Teaming Agreement Need to disclose JV to agency Proper Accounting

Final Final Thoughts

Be Persistent Be Creative Choose Partners Wisely

Thank You !!
Dear Participants, Thank You for your time & participation! Pease submit your questions via email & we will answer as we have time. The webinar is recorded and available at: http://www.JenniferSchaus.com/events

Joint Ventures in Government Contracting

Mark A. Amadeo, Esq. mamade@amadeolaw.com www.amadeolaw.com +12026402090 +13017891620

Jennifer Schaus & Associates JSchaus@JenniferSchaus.com www.JenniferSchaus.com +12023650598