JV - Joint Ventures in Government Contracting

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Jennifer Schaus JSchaus@JenniferSchaus.com and Mark Amadeo of Amadeo Law Firm present on Joint Ventures in Government Contracting. Full audio & video avail at: http://www.youtube.com/watch?v=NUUytjc-WsI or contact Jennifer Schaus + 1 - 2 0 2 - 3 6 5 - 0 5 9 8

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  • Great Article. I also can share my experience in filling forms. You will be surprised how easy it can be to fill forms. Try fillingl SBA 1150 through the online sowtware https://goo.gl/XN8xyd
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JV - Joint Ventures in Government Contracting

  1. 1. Joint Venturesin Government ContractingStrategies & Legal Considerations
  2. 2. Joint Venturesin Government Contracting• Agenda– Introductions– Presentation– Q & A
  3. 3. Joint Venturesin Government Contracting–Introductions:• Fed Bid Speed• Fierce Government• Mark A. Amadeo – Amadeo Law Firm, PLLC• Jennifer Schaus – JS & Associates
  4. 4. Joint Venturesin Government Contracting• Fed Bid Speed* Software program to manage B2G Opps* Single click integration with FBO.gov* Share notes & project manage RFP’s
  5. 5. Joint Venturesin Government Contracting• Fierce Government* Free Govt IT Newsletter* IT in Govt Agencies / Defense / Cloud / Cyber* White Papers / Events / Analysis* In-depth & Quality = Differentiator
  6. 6. Joint Venturesin Government ContractingAmadeo Law Firm, PLLC* Local and Federal Contracting* Employee Benefits* Employment
  7. 7. Joint Venturesin Government Contracting• Jennifer Schaus & Associates• B2G Services and EventsGSA SchedulesFederal Sales / Marketing
  8. 8. Joint Venturesin Government Contracting
  9. 9. Joint Venturesin Government ContractingTwo Types of Teaming Arrangements Under FAR (9.601)Two Types of Teaming Arrangements Under FAR (9.601)Vertical (Prime-Sub)“A potential prime contractor agrees with one or more other companiesto have them act as its subcontractors under a specified Governmentcontract or acquisition program.”Horizontal (JV)“Two or more companies form a partnership or joint venture to act as a potential prime contractor.”TEAMING
  10. 10. Joint Venturesin Government ContractingWhy Government Approves of Teaming ArrangementsWhy Government Approves of Teaming ArrangementsFAR 9.602 (a) Contractor team arrangements may be desirable fromboth a Government and industry standpoint in order to enablethe companies involved to —(1) Complement each other’s unique capabilities; and(2) Offer the Government the best combination of performance,cost, and delivery for the system or product being acquired.TEAMING
  11. 11. Joint Venturesin Government Contracting
  12. 12. Joint Venturesin Government ContractingCompetitive Benefits – Small BusinessesCompetitive Benefits – Small BusinessesJoint Venture Rules Ease TensionJoint Venture Rules Ease TensionGeneral Rules of AffiliationGeneral Rules of Affiliation• Revenues and # employees are combined for small biz size standardRevenues and # employees are combined for small biz size standard• Joint venture parties are deemed affiliatedJoint venture parties are deemed affiliatedRelaxed JV RulesRelaxed JV Rules• Exceptions to affiliation:Exceptions to affiliation: Considered small even if combined size > size standardConsidered small even if combined size > size standard• Businesses participate in contracts don’t typically qualify for aloneBusinesses participate in contracts don’t typically qualify for alone
  13. 13. Joint Venturesin Government ContractingCompetitive Benefits – Small BusinessesCompetitive Benefits – Small BusinessesEExceptions to Affiliation – 8(a) & Small Businessesxceptions to Affiliation – 8(a) & Small BusinessesSmall Business Joint Ventures Competing for Larger ContractsSmall Business Joint Ventures Competing for Larger ContractsApplies To: bundled contracts, contracts over $10 million (when size standard is basedApplies To: bundled contracts, contracts over $10 million (when size standard is basedon # employees), or contracts that are greater than ½ the size standard (whenon # employees), or contracts that are greater than ½ the size standard (whensize standard is based on revenue)size standard is based on revenue)Requirement:Requirement:Each JV participant must be small under the size standard for the contractEach JV participant must be small under the size standard for the contract
  14. 14. Joint Venturesin Government ContractingCompetitive Benefits – Small BusinessesCompetitive Benefits – Small BusinessesEExceptions to Affiliation – 8(a) & Small Businessesxceptions to Affiliation – 8(a) & Small Businesses8(a) Joint Ventures Competing For Larger 8(a) Contracts8(a) Joint Ventures Competing For Larger 8(a) ContractsApplies To:Applies To:Contracts set aside for 8(a) businesses as long as contract is either greater than $10MContracts 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 ½ the size standard (when(when size standard is based on # employees) or greater than ½ the size standard (whensize standard is basedsize standard is based on revenue)on revenue)Requirements:Requirements:• Each JV company must be small under the size standard for the contractEach JV company must be small under the size standard for the contract• At least one JV company must be an 8(a) businessAt 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)At least one 8(a) business must be very small (i.e., less than half the size standard)
  15. 15. Joint Venturesin Government ContractingCompetitive Benefits – Small BusinessesCompetitive Benefits – Small BusinessesEExceptions to Affiliation – 8(a) & Small Businessesxceptions to Affiliation – 8(a) & Small Businesses8(a) Mentor-Protégé Joint Ventures8(a) Mentor-Protégé Joint VenturesApplies To:Applies To:Any contract with a small business requirement, including 8(a) contractAny contract with a small business requirement, including 8(a) contractRequirements:Requirements:• Mentor and protégé approved by SBA under the mentor-protégé programMentor and protégé approved by SBA under the mentor-protégé program• 8(a) Protégé meets the size standard for the contract8(a) Protégé meets the size standard for the contract**Mentor can be any size**Mentor can be any size
  16. 16. Joint Venturesin Government ContractingCompetitive Benefits – Small BusinessesCompetitive Benefits – Small BusinessesEExceptions to Affiliation – Other Joint Venturesxceptions to Affiliation – Other Joint VenturesHUBZone Joint VenturesHUBZone Joint VenturesSDVOSB Joint VenturesSDVOSB Joint Ventures
  17. 17. Joint Venturesin Government ContractingCompetitive Benefits – Small BusinessesCompetitive Benefits – Small BusinessesLimits To Relaxed Rules On AffiliationLimits To Relaxed Rules On Affiliation3 in 2 Rule:3 in 2 Rule:Joint venture can engage in and carry out no more than three specificJoint venture can engage in and carry out no more than three specificor limited-purpose business ventures for profit over a two year periodor limited-purpose business ventures for profit over a two year periodBut . . .But . . .No limit on number of JV’s that same JV participants can formNo limit on number of JV’s that same JV participants can form
  18. 18. Joint Venturesin Government ContractingCompetitive Benefits – Small BusinessesCompetitive Benefits – Small BusinessesEven if Affiliation Applies - Businesses Participate In Contracts Don’t Qualify For AloneEven if Affiliation Applies - Businesses Participate In Contracts Don’t Qualify For Alone8(a) Joint Ventures Competing For Smaller 8(a) Contracts8(a) Joint Ventures Competing For Smaller 8(a) ContractsApplies To:Applies To:8 (a) set-aside contracts that are too small to qualify for affiliation exception8 (a) set-aside contracts that are too small to qualify for affiliation exceptionRequirements:Requirements:• Each JV company must be small under the size standard for the contractEach JV company must be small under the size standard for the contract• At least one JV company must be an 8(a) businessAt 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)At least one 8(a) business must be very small (i.e., less than half the size standard)
  19. 19. Joint Venturesin Government ContractingCompetitive Benefits – Small BusinessesCompetitive Benefits – Small BusinessesEven if Affiliation Applies - Businesses Participate In Contracts Don’t Qualify For AloneEven if Affiliation Applies - Businesses Participate In Contracts Don’t Qualify For AloneEDWOSB /WOSB Joint Ventures Competing For Smaller ContractsEDWOSB /WOSB Joint Ventures Competing For Smaller ContractsSDVOSB Joint Ventures Competing For Smaller ContractsSDVOSB Joint Ventures Competing For Smaller Contracts
  20. 20. Joint Venturesin Government ContractingCompetitive Benefits – Small BusinessesCompetitive Benefits – Small BusinessesAdditional Requirements On Any Joint Venture Competing For An 8(a) ContractAdditional Requirements On Any Joint Venture Competing For An 8(a) Contract• SBA approval of JV agreement before awardSBA approval of JV agreement before award• Unpopulated:Unpopulated: 8(a) partner(s) must do at least 40% of the work8(a) partner(s) must do at least 40% of the workJV may subcontract to non 8(a) partner(s), if subcontractsJV may subcontract to non 8(a) partner(s), if subcontracts40% work to 8(a)40% work to 8(a)• Populated:Populated: 8(a) partner(s) must show what it gains + business development8(a) partner(s) must show what it gains + business developmentNon-8(a) partners cannot be subcontractors to the JVNon-8(a) partners cannot be subcontractors to the JV
  21. 21. Joint Venturesin Government ContractingJoint Venture Agreement RequirementsJoint Venture Agreement RequirementsExample: Joint Venture Agreement to Perform 8(a) ContractsExample: Joint Venture Agreement to Perform 8(a) Contracts(1) State purpose of JV(1) State purpose of JV(2) Designate 8(a) participant as managing venture and an employee of managing venture as(2) Designate 8(a) participant as managing venture and an employee of managing venture asproject managerproject manager(3) State that not less than 51% of net profits will be distributed to 8(a) participant(s)(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;(4) Provide for special bank account in name of JV; signatures of all JV participants for withdrawals;used for payments on contract and contract expensesused for payments on contract and contract expenses(5) Include itemized list of equipment, facilities and resources provided by each JV participant,(5) Include itemized list of equipment, facilities and resources provided by each JV participant,with cost and value for eachwith cost and value for each(6) Specify responsibilities of parties regarding contract performance, labor source & contract(6) Specify responsibilities of parties regarding contract performance, labor source & contractnegotiationnegotiation(7) State all parties are obligated for performance despite any withdrawal by any JV participant(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(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(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(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(11) State that project – end profit-loss & distribution statements will be submitted to SBAwithin 90 days of project completionwithin 90 days of project completion
  22. 22. Joint Venturesin Government ContractingFinal Thoughts…• Consistent with Teaming AgreementConsistent with Teaming Agreement• Need to disclose JV to agencyNeed to disclose JV to agency• Proper AccountingProper Accounting…Final Final Thoughts• Be PersistentBe Persistent• Be CreativeBe Creative• Choose Partners WiselyChoose Partners Wisely
  23. 23. Thank You !!Dear Participants,Thank You for your time & participation!Pease submit your questions via email & we willanswer as we have time.The webinar is recorded and available at:http://www.JenniferSchaus.com/events
  24. 24. Joint Venturesin Government ContractingJennifer Schaus & AssociatesJSchaus@JenniferSchaus.comwww.JenniferSchaus.com+ 1 – 2 0 2 – 3 6 5 – 0 5 9 8Mark A. Amadeo, Esq.mamade@amadeolaw.comwww.amadeolaw.com+ 1 – 2 0 2 – 6 4 0 – 2 0 9 0+ 1 – 3 0 1 – 7 8 9 – 1 6 2 0

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