The Small Business Administration (SBA) is proposing several changes to the rules governing the joint venturing process for set-aside contracts.  One of the proposed changes creates a “universal” mentor-protégé program that would be available to all small businesses, improving the likelihood that a small business seeking a joint venture could indeed find a willing partner.

While the above may expand some joint venture opportunities, a separate component of the proposed rule could complicate issues for others.  Currently many joint ventures are established rather informally, with no formal documentation supporting the roles and workload agreements established by the participants.  SBA has accepted these informal arrangements up to this point. The new rule, if adopted, would require joint venture agreements to be in writing and include those details describing the formal relationship and assigned responsibilities.  These written agreements would be filed with the SBA.

Other items of note in the proposed rule include elimination of the use of “populated” joint ventures; certification by joint venture partners that each will abide by all set-aside and contract regulations; and a requirement for all parties of the joint venture to submit annual reports to the SBA.

PTAC will continue to provide updates on the progress of this rule as it is finalized.