The Small Business Administration's 8(a) Business Development Program
 
 


  

 

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8(A) JOINT VENTURE AGREEMENTS :: To facilitate access to larger government contract opportunities, companies admitted to the 8(a) program are permitted to negotiate and enter into joint venture agreements with other small business concerns.  This page provides information about how the 8(a) Joint Venture program works.
    
General Rule  
If approved by the SBA, an 8(a) company may enter into a joint venture agreement with one or more small business concerns (whether or not 8(a) certified) for the purpose of performing a specific 8(a) contract. This provision permits an 8(a) company to receive award of a government contract that would otherwise be too large to perform alone.
  
    
How JV Agreements Work  
In order to limit abuse, the SBA imposes certain restrictions on joint venture agreements.  For example, such agreements are permissible only when an 8(a) company lacks the necessary capacity to perform the contract on its own.  The SBA must review and approve the joint venture agreement before the targeted contract is awarded.  An important element of the SBA review process is to ensure that a joint venture agreement is fair and equitable, and will be of substantial benefit to the 8(a) company.  

Once approved by the SBA, the joint venture receives the go-ahead to enter into a sole-source or competitive 8(a) contract with a government agency.  The contract is awarded in the name of the joint venture.  However, the 8(a) company is required to be designated as the "managing venturer" of the joint venture.  Certain other important requirements and restrictions apply in the award and performance of an 8(a) joint venture contract.
  

    
Need Help?  
8(a) companies can reap major benefits through forming joint venture relationships in pursuit of government contract opportunities.  However, the risks of establishing such relationships without appropriate legal advice are high.  A company that establishes and pursues joint venture opportunities in violation of the requirements of the SBA may be subject to suspension or termination from the 8(a) program.  For assistance in forming a joint venture relationship with another small business concern, contact us for a consultation. 
  

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