Joint Ventures: SBA Proposes Major Changes

Source: SmallGovConBy Steven Koprince  February 9, 2015

The SBA has proposed major changes to rules governing joint venturing for set-aside contracts.

As part of a proposed rule released last week, the SBA proposes to eliminate so-called “populated” joint ventures, and proposes additional changes regarding joint venture certifications, performance of work reports, and more.

Last week’s proposed rule received broad coverage (including right here at SmallGovCon) for the SBA’s proposal to create a “universal” mentor-protege program available to all small businesses.  But the proposed mentor-protege program is not the only important change the SBA has proposed.  The rules governing joint ventures would also change under the SBA’s proposed rule.

The SBA first proposes to amend the definition of a joint venture, for all of the SBA’s programs, to specify that “any joint venture must be in writing.”  For now, at least, the SBA proposal would continue to allow joint ventures to be “informal” partnerships instead of formal legal entities such as limited liability companies.  However, “regardless of form, the joint venture must be reduced to a written agreement.”  Apparently, some joint venturers have mistakenly assumed that an informal joint venture need not be in writing, which has never been the SBA’s intent.  The proposed rule would eliminate that confusion.  More ….


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