1. Joint Ventures in Government Contracting Strategies & Legal Considerations

2. Joint Ventures in Government Contracting Agenda –Introductions –Presentation –Q & A

3. Joint Ventures in Government Contracting –Introductions: Fed Bid Speed Fierce Government Mark A. Amadeo – Amadeo Law Firm, PLLC Jennifer Schaus – JS & Associates

4. Joint Ventures in Government Contracting Fed Bid Speed * Software program to manage B2G Opps * Single click integration with FBO.gov * Share notes & project manage RFP’s

5. Joint Ventures in Government Contracting Fierce Government * Free Govt IT Newsletter * IT in Govt Agencies / Defense / Cloud / Cyber * White Papers / Events / Analysis * In-depth & Quality = Differentiator

6. Joint Ventures in Government Contracting Amadeo Law Firm, PLLC * Local and Federal Contracting * Employee Benefits * Employment

7. Joint Ventures in Government Contracting Jennifer Schaus & Associates B2G Services and Events GSA Schedules Federal Sales / Marketing

8. Joint Ventures in Government Contracting

9. Two Types of Teaming Arrangements Under FAR (9.601) Vertical (Prime-Sub) “A potential prime contractor agrees with one or more other companies to have them act as its subcontractors under a specified Government contract or acquisition program.” Horizontal (JV) “Two or more companies form a partnership or joint venture to act as a potential prime contractor.” TEAMING

10. Joint Ventures in Government Contracting Why Government Approves of Teaming Arrangements FAR 9.602 (a) Contractor team arrangements may be desirable from both a Government and industry standpoint in order to enable the companies involved to — (1) Complement each other’s unique capabilities; and (2) Offer the Government the best combination of performance, cost, and delivery for the system or product being acquired. TEAMING

11. Joint Ventures in Government Contracting Competitive Benefits – Small Businesses Competitive Benefits – Small Businesses Tension: Small Business Goals vs. Cost Savings Small Business Set-Asides Small Business Set-Asides 8(a) Companies8(a) Companies Women-owned small businesses (WOSB)Women-owned small businesses (WOSB) Service-disabled veteran-owned small businesses (SDVOSB)Service-disabled veteran-owned small businesses (SDVOSB) Small businessesSmall businesses Cost-Saving Trends That Reduce Small Business Participation Contract consolidationContract consolidation Consolidation across agenciesConsolidation across agencies Massive IDIQ’s & task ordersMassive IDIQ’s & task orders

12. Joint Ventures in Government Contracting Competitive Benefits – Small Businesses Joint Venture Rules Ease Tension General Rules of Affiliation Revenues and # employees are combined for small biz size standardRevenues and # employees are combined for small biz size standard Joint venture parties are deemed affiliatedJoint venture parties are deemed affiliated Relaxed JV Rules Exceptions to affiliation: Considered small even if combined size > size standardExceptions to affiliation: Considered small even if combined size > size standard Businesses participate in contracts don’t typically qualify for aloneBusinesses participate in contracts don’t typically qualify for alone

13. Joint Ventures in Government Contracting Competitive Benefits – Small Businesses E xceptions to Affiliation – 8(a) & Small Businesses Small Business Joint Ventures Competing for Larger Contracts Applies To: bundled contracts, contracts over $10 million (when size standard is based on # employees), or contracts that are greater than ½ the size standard (when size standard is based on revenue) Requirement: Each JV participant must be small under the size standard for the contract

14. Joint Ventures in Government Contracting Competitive Benefits – Small Businesses E xceptions to Affiliation – 8(a) & Small Businesses 8(a) Joint Ventures Competing For Larger 8(a) Contracts Applies To: Contracts set aside for 8(a) businesses as long as contract is either greater than $10M (when size standard is based on # employees) or greater than ½ the size standard (when size standard is based on revenue) Requirements: Each JV company must be small under the size standard for the contractEach JV company must be small under the size standard for the contract At least one JV company must be an 8(a) businessAt least one JV company must be an 8(a) business At least one 8(a) business must be very small (i.e., less than half the size standard)At least one 8(a) business must be very small (i.e., less than half the size standard)

15. Joint Ventures in Government Contracting Competitive Benefits – Small Businesses E xceptions to Affiliation – 8(a) & Small Businesses 8(a) Mentor-Protégé Joint Ventures Applies To: Any contract with a small business requirement, including 8(a) contract Requirements: Mentor and protégé approved by SBA under the mentor-protégé programMentor and protégé approved by SBA under the mentor-protégé program 8(a) Protégé meets the size standard for the contract8(a) Protégé meets the size standard for the contract **Mentor can be any size

16. Joint Ventures in Government Contracting Competitive Benefits – Small Businesses E xceptions to Affiliation – Other Joint Ventures HUBZone Joint Ventures SDVOSB Joint Ventures

17. Joint Ventures in Government Contracting Competitive Benefits – Small Businesses Limits To Relaxed Rules On Affiliation 3 in 2 Rule: Joint venture can engage in and carry out no more than three specific or limited-purpose business ventures for profit over a two year period But... No limit on number of JV’s that same JV participants can form

18. Joint Ventures in Government Contracting Competitive Benefits – Small Businesses Even if Affiliation Applies - Businesses Participate In Contracts Don’t Qualify For Alone 8(a) Joint Ventures Competing For Smaller 8(a) Contracts Applies To: 8 (a) set-aside contracts that are too small to qualify for affiliation exception Requirements: Each JV company must be small under the size standard for the contractEach JV company must be small under the size standard for the contract At least one JV company must be an 8(a) businessAt least one JV company must be an 8(a) business At least one 8(a) business must be very small (i.e., less than half the size standard)At least one 8(a) business must be very small (i.e., less than half the size standard)

19. Joint Ventures in Government Contracting Competitive Benefits – Small Businesses Even if Affiliation Applies - Businesses Participate In Contracts Don’t Qualify For Alone EDWOSB /WOSB Joint Ventures Competing For Smaller Contracts SDVOSB Joint Ventures Competing For Smaller Contracts

20. Joint Ventures in Government Contracting Competitive Benefits – Small Businesses Additional Requirements On Any Joint Venture Competing For An 8(a) Contract SBA approval of JV agreement before awardSBA approval of JV agreement before award Unpopulated:8(a) partner(s) must do at least 40% of the workUnpopulated:8(a) partner(s) must do at least 40% of the work JV may subcontract to non 8(a) partner(s), if subcontracts 40% work to 8(a) Populated:8(a) partner(s) must show what it gains + business developmentPopulated:8(a) partner(s) must show what it gains + business development Non-8(a) partners cannot be subcontractors to the JV

21. Joint Ventures in Government Contracting Joint Venture Agreement Requirements Example: Joint Venture Agreement to Perform 8(a) Contracts (1) State purpose of JV (2) Designate 8(a) participant as managing venture and an employee of managing venture as project manager project manager (3) State that not less than 51% of net profits will be distributed to 8(a) participant(s) (4) Provide for special bank account in name of JV; signatures of all JV participants for withdrawals; used for payments on contract and contract expenses used for payments on contract and contract expenses (5) Include itemized list of equipment, facilities and resources provided by each JV participant, with cost and value for each with cost and value for each (6) Specify responsibilities of parties regarding contract performance, labor source & contract negotiation (7) State all parties are obligated for performance despite any withdrawal by any JV participant (8) Designate accounting and administrative records to be maintained by managing venture (9) Require original records to be maintained by managing venturer upon contract completion (10) State that quarterly financial statements will be submitted to SBA within 45 days of each quarter (11) State that project – end profit-loss & distribution statements will be submitted to SBA within 90 days of project completion within 90 days of project completion

22. Joint Ventures in Government Contracting Final Thoughts… Consistent with Teaming Agreement Consistent with Teaming Agreement Need to disclose JV to agency Need to disclose JV to agency Proper Accounting Proper Accounting …Final Final Thoughts Be Persistent Be Persistent Be Creative Be Creative Choose Partners Wisely Choose Partners Wisely

23. Thank You !! Dear Participants, Thank You for your time & participation! Pease submit your questions via email & we will answer as we have time. The webinar is recorded and available at: http://www.JenniferSchaus.com/events http://www.JenniferSchaus.com/events

24. Joint Ventures in Government Contracting Jennifer Schaus & Associates JSchaus@JenniferSchaus.com www.JenniferSchaus.com + 1 – 2 0 2 – 3 6 5 – 0 5 9 8 Mark A. Amadeo, Esq. mamade@amadeolaw.com www.amadeolaw.com + 1 – 2 0 2 – 6 4 0 – 2 0 9 0 + 1 – 3 0 1 – 7 8 9 – 1 6 2 0