Small-business programs
What is a joint venture in government contracting?
A joint venture is two or more firms combining to pursue a specific contract, and SBA's rules allow a small business to joint venture with a larger firm without the two being treated as affiliates when the arrangement fits an approved exception.
Also written as: JV, small business joint venture, mentor-protege joint venture.
The affiliation problem is the reason the rules exist. Ordinarily, under 13 CFR 121.103, firms that control or have the power to control one another are affiliated and their sizes are added together — which would make any small firm partnered with a large one other than small. SBA's joint-venture provisions in 13 CFR 125.8 and the mentor-protégé provisions in 13 CFR 125.9 carve out exceptions where the small partner remains small for the contract.
The conditions are specific and unforgiving: written joint-venture agreement with required contents, the small partner as managing venturer, a defined minimum share of the work performed by the small partner, and separate accounting for the venture. A joint venture that does not meet them is not a joint venture that survives a size protest.
FAR 9.601 recognises the joint venture as one of two forms of contractor team arrangement, the other being a prime-subcontractor agreement.
What this means when you bid
A joint venture is a legal structure with mandatory contents, not a handshake. Get the agreement right before you submit, because a size protest reads the agreement.
Joint venture compared with the terms it gets confused with
Joint venture vs Teaming agreement
A joint venture bids as a single entity formed by the partners; a prime-subcontractor teaming agreement has one firm bid as prime and the other perform as its subcontractor.
What Teaming agreementmeans →Where this definition comes from
Federal contracting is one of the few fields where the authoritative answer is free, public and one click away. These are the sources this page is built from — go and read them.
- 13 CFR 125→
Government contracting programs, including subcontracting limits.
- 13 CFR 121→
SBA size regulations.
- FAR 9.601→
Contractor team arrangement — definitions.
This page explains a term in plain English and cites the authority it comes from. It is not legal advice, and the regulation governs where this page and the regulation differ.
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Joint venture— common questions
- What is a joint venture in government contracting?
- A joint venture is two or more firms combining to pursue a specific contract, and SBA's rules allow a small business to joint venture with a larger firm without the two being treated as affiliates when the arrangement fits an approved exception.
- What is the difference between Joint venture and Teaming agreement?
- A joint venture bids as a single entity formed by the partners; a prime-subcontractor teaming agreement has one firm bid as prime and the other perform as its subcontractor.
- Why does a joint venture matter when you are bidding?
- A joint venture is a legal structure with mandatory contents, not a handshake. Get the agreement right before you submit, because a size protest reads the agreement.