You want to make sure that you understand how the joint venture small business rules and guidelines impact your subcontractor agreements. For example, if you do not fall under one of the statutory exemptions to affiliation, joint venturers are presumed affiliated if they do not follow the guideline under the new rules.Īs government contractors, you must get it right because you may find your company subject to challenge in small business size protest. There are several legal interpretations and factual bases of the SBA’s definition of affiliation. Various Legal Interpretations of the Small Joint Venture Business Definition & Rules SBA may also find that the relationship between a prime contractor and its subcontractor is a joint venture and that affiliation between the two exists.The small business joint venture is viewed as an entity in determining power to control its management.A joint venture may or may not be in the form of a separate legal entity.
Meeting the SBA small business definition for joint ventures also means that the business entity cannot submit more than three offers over a two-year period, starting from the submission date of the first offer.Under federal procurement rules, the small business joint venture definition in government contracting means “an association of individuals and/or concerns with interests in any degree or proportion by way of contract, express or implied, consorting to engage in and carry out no more than three specific or limited-purpose business ventures for joint profit over a two-year period, for which purpose they combine their efforts, property, money, skill, or knowledge, but not on a continuing or permanent basis.”
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