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Joint Ventures

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How is the business size of a Joint Venture (LLC , LLP, etc.,) determined? By the amount of revenues expected or genderated from the JV? (i.e., the prime contract value?)

If 2 large companies form a JV, and win the prime contract, I know that both partners (large companies in the JV) combine their 1st tier small business subcontracting toward meeting the small business goals in the contract.

What if the Joint Venture is formed by one small business and one large company ? and the small business will share in 51% of the revenues from the JV. Is the JV LLC deemed to be a small business ?

In any comments or insights on JV's would be helpful.

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Guest carl r culham

The answer to your question should not generally be made as the specific solicitation/contract does affect an answer. My suggestion would be to seek a specific expert in the field of small business determinations as there are many considerations to be made. A place to start to give a flavor of the details that would need to be considered to answer your question specific to a particular procurement can be found in FAR Part 19.000 through 19.102 Have you taken a look at this part of the FAR?

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How is the business size of a Joint Venture (LLC , LLP, etc.,) determined? By the amount of revenues expected or genderated from the JV? (i.e., the prime contract value?)

If 2 large companies form a JV, and win the prime contract, I know that both partners (large companies in the JV) combine their 1st tier small business subcontracting toward meeting the small business goals in the contract.

What if the Joint Venture is formed by one small business and one large company ? and the small business will share in 51% of the revenues from the JV. Is the JV LLC deemed to be a small business ?

In any comments or insights on JV's would be helpful.

You need to look at the SBA rules on affiliation, particularly as they apply to JVs. Specifically, look at 13 CFR 121.103(h).

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You need to look at the SBA rules on affiliation, particularly as they apply to JVs. Specifically, look at 13 CFR 121.103(h).

The answer lies in the makeup of the JV.

If the two companies forming the JV are large, the joint venture is considered to be large.

If there is a small company and a large company in the JV, it is also considered large. The exception is if the large and small company have an approved SBA Mentor-Protege agreement and the JV is also approved by the SBA. Then the JV is considered to be small, but the small business must then be the managing partner of the JV and meet the other requirements set by the SBA for JVs. For more information about the Mentor Protege Joint Ventures, you might want to go to the SBA site at http://www.sba.gov/content/mentor-prot%C3%A9g%C3%A9-program

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Could you please tell me why you are certain that both partners (large companies in the JV) combine their 1st tier small business subcontracting toward meeting the small business goals in the contract. I am researching this and have been looking for a reference that this is allowed. Can you help? Thanks

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