On April 10, 2019, the SBA Office of Hearings and Appeals (“SBA OHA”) sustained a protest against an SDVOSB joint venture between Veterans Contracting, Inc. and Trumble Construction, Inc. The joint venture was selected as the apparent awardee on a construction project at the Louis Stokes Cleveland VA Medical Center. The procurement was set aside for SDVOSBs.
SBA OHA found that the joint venture agreement does not comply with 13 C.F.R. § 125.18(b)(3). Under that rule, in order to be considered an eligible joint venture, the SDVOSB partner(s) to the joint venture must perform at least 40% of the work, and such work must consist of more than administrative or ministerial functions. Here, the joint venture agreement was silent as to what each member of the joint venture would contribute to the project. Instead, the joint venture stated that a “jointly-executed statement” would be provided to the procuring activity at a later date. However, this was never done.
The joint venture tried to fix this problem by preparing a breakdown of the work between the joint venture members, but SBA OHA ruled its too late. The joint venture agreement is examined at the time the offer is submitted and date the protest was filed. Thus, attempts to correct it afterwards do not count.
This case illustrates the need to include an addendum to a joint venture agreement that is specific to the procurement at issue.
Best Practice Tip: When a solicitation is issued, prepare an addendum to the joint venture agreement that provides a breakdown of work share well before offers are submitted.
CVE Protest of Veterans Contracting Inc., SBA No. CVE-107 (April 10, 2019)
