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Create More Business – Through a Joint Venture: A Joint Venture To-Do Checklist

Looking for a way to get that all-mighty contract, because you do not have the set-aside or relevant experience required to secure the opportunity? Or, looking for a way to exploit your niche capabilities into the federal arena but you need the popular kids to get you in? Forming a Joint Venture (JV) is a great way to bring two parties together to share mutually beneficial company resources like, experience, small business (SB) classifications, certifications, or bonding, while also sharing the risks and rewards of a business enterprise. A JV is usually carried out through a JV Agreement and creation of a business entity, usually a Limited Liability Company (LLC).

There is a mountain of things to complete when creating a JV company, it can be exhausting and overwhelming. On the mile-long to-do list will be things from the beginning stages, like a company name and business plan; to budgets and financial management, to shareholders and employees; to agreements and bonding. Since there are so many things to think about, Meridian West has provided a list of things a JV will be required to provide when submitting your first proposal or responding to a solicitation or Sources Sought. These things will likely be required in the Request for Proposal (RFP) for submission.

JV Proposal To-Do Checklist:

1. JV Agreement – Signed by both parties. Most companies obtain a JV Agreement from a lawyer. The contents typically set forth the business arrangement in terms of responsibilities, ownership percentages, management control and capital contributions, to name a few, for each JV member.

2. SBA Approval – A JV Agreement approval from the SBA is required to pursue specific set-aside contracts (specifically 8(a)). Check with the SBA to find out if acquiring approval for your JV is required.

3. Obtain a DUN and Bradstreet Number (DUNS) number – The JV will need to obtain a DUNS number from Dun & Bradstreet here. This number acts as a company identifier and will be used in many of the following company set-up steps.

4. Register JV in – For helpful instructions on registering a new company or JV check out our previous blog post. Registering the JV in the System for Award Management (SAM) sets the company up with detailed information regarding core data, assertions, representations and certifications and points of contact.

5. Financial Statements – An RFP will likely require financial statements from each party of the JV for three, up to five previous years.

6. Bonding – A party can use their current surety company to assist with bonding for the JV company.

7. Managing Members or Partners – Both Managing Members or Partners from each JV party may be required to sign the proposal.

8. Experience Summary – For a first-time joint effort, each JV member should be prepared to provide a list of past relevant contracts to include in the proposal submission. If the JV members have worked together in the past (such as in a prime-subcontractor relationship), a summary of these projects would be beneficial to include to show an existing working relationship.

9. Consent Letters – Each JV partner should be prepared to sign a consent letter authorizing the release of adverse past performance information to the JV entity (offeror) so the JV may respond to this information as part of the procurement process.

10. Safety Ratings – With new JV members, each member may also be required to provide their safety ratings.

Be advised, based on FAR 13 §121.103 (h), once the JV has been awarded a contract they can pursue and be awarded one or more contracts for a period of two years. See below for a full description of the two-year rule for JV contracts:

(h) Affiliation based on joint ventures. A joint venture is an association of individuals and/or concerns with interests in any degree or proportion intending to engage in and carry out 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 for conducting business generally. This means that a specific joint venture entity generally may not be awarded contracts beyond a two-year period, starting from the date of the award of the first contract, without the partners to the joint venture being deemed affiliated for the joint venture. Once a joint venture receives a contract, it may submit additional offers for a period of two years from the date of that first award. An individual joint venture may be awarded one or more contracts after that two-year period as long as it submitted an offer including price prior to the end of that two-year period.

If you have any questions about the benefits of entering into a JV agreement or how to start development of your JV entity, please contact Meridian West. We have more than 20 years of experience successfully managing federal proposals in various agencies and scopes as well as for a variety of clients including JV offerors.


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