SBA 8(a) Mentor-Protégé Joint Ventures Beware: No Guarantee of Exemption from the Rules of Affiliation
BY REGINALD M. JONES ON DECEMBER 15, 2014
The Federal Government Contracts & Procurement Blog
Just because an 8(a) small business and a large business have been approved to participate in the Small Business Administration’s (SBA) 8(a) mentor-protégé program under 13 CFR § 124.520 does not mean that any joint venture between the two companies will be automatically exempt from the rules of affiliation.
In a recent, first of its kind, decision, a joint venture consisting of an approved mentor-protégé team was awarded, and then lost, a multi-million dollar U.S. Army Corps of Engineers (Corps) small business set-aside contract to design and build an Army Reserve Center because the SBA found the joint venture partners to be affiliated under the SBA’s rules of affiliation (13 CFR § 121.103).
After award, the contracting officer questioned whether the joint venture agreement submitted by the joint venture partners satisfied the SBA’s rules and initiated a size protest with the SBA Area Office. The Area Office determined that the joint venture agreement did not itemize all major equipment, facilities, and other resources to be provided by each party, failed to specify the responsibilities of the parties, and did not show how the joint venturers would meet the minimum performance requirements.