Joint ventures

Joint ventures allow certain businesses to compete together for government contracts reserved for small businesses.

Content

Program benefits

Joint venture benefits to participants include:

• Collective representation of past performance
• Shared costs and resources
• Leveraging the other partner’s experience and market share

A mentor and its protégé can joint venture as a small business for any small business contract, provided the protégé individually qualifies as small. The joint venture may also pursue any type of set-aside contract for which the protégé qualifies, including contracts set aside for 8(a), service-disabled veteran-owned, woman-owned, and HUBZone businesses.

In order for your joint venture to be able to bid on contracts reserved for small businesses, you must follow the requirements for receiving an exclusion of affiliation for contracting purposes.

SBA no longer approves joint venture agreements formed to pursue competitive 8(a) contracts. This includes joint venture agreements formed under the SBA MPP to perform a competitive 8(a) contract. SBA will continue to review and approve all joint venture agreements formed to pursue sole source 8(a) contracts.

How to set up a joint venture

Your joint venture agreement must be in writing and follow SBA requirements.

The joint venture must be separately identified with its own name and have both a Unique Entity Identifier (UEI) and a Commercial And Government Entity (CAGE) code in the federal government's System for Award Management at SAM.gov. In SAM, designate the entity type as a joint venture, with individual partners listed as the immediate owners.

To receive an exclusion from affiliation the mentor-protégé agreement must be approved before a mentor and its protégé submit an offer for a small business contract as a joint venture.

The certificate should also be emailed to mppjvreporting@sba.gov. The protégé must provide a joint venture compliance certificate to SBA and the contracting officer.

Rules for joint ventures

The following rules apply to joint ventures:

Limitations on Subcontracting

• As the joint venture prime of either a full or partial set-aside contract, the small business concern must agree to the following limitations on subcontractor for the respective contract types:
  • Pay no more than 50% of the amount paid by the government to non-similarly situated firms for service contracts.
  • Pay no more than 50% of the amount paid by the government to non-similarly situated firms for supplies or products contracts.
  • Pay no more than 85% of the amount paid by the government to non-similarly situated firms for construction contracts.
  • Pay no more than 75% of the amount paid by the government to non-similarly situated firms for special trade contracts.

  Performance of Work

  The protégé must perform at least 40% of the work done by the joint venture. Assuming the joint venture and the protégé perform the minimum work share requirements, the protégé will perform 20% of the contract. However, for purposes of determining the protégé’s size, 40% of the revenues under the contract must be appropriated to the protégé.

  Allocation of Joint Venture Receipts

  • The joint venture must submit annual evaluation reports, annual performance-of-work statements, and project-end performance-of-work to SBA and the contracting agencies explaining how the work is being performed for each contract.
  • Annual evaluations are due 30 days from the anniversary date on your welcome letter.
  • Respective, annual reports and project-end reports are due 45 days after each operating year and 90 days after completion of the contract. Note, the protégé is the responsible party for reporting the evaluation under its DUNS number.

  The regulations governing joint ventures formed under SBA MPP are explained in detail in 13 CFR 125.8 and 13 CFR 125.9.

  

  Is your business SBA certified?

  Government agencies reserve contracts for small businesses that are certified in SBA’s contracting programs.

  Need help?

  If you have questions about joint ventures, contact your local SBA District Office.

  Last updated July 1, 2024

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