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Sunstrider

Cost or pricing data from Joint Ventures?

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Say you are in a sole source, non-commercial procurement with a small business joint venture (JV). The JV comprised of two partner firms, and certified cost or pricing data will be required prior to making award to the JV.

The JV is brand new, so there is no no acquisition history attributable to this entity. However, there is extensive acquisition history and actual cost data attributable to at least one of the JV partners.

My questions:

  • Will Truth in Cost or Pricing apply only to the JV entity, or any/all contractors associated with the JV?
  • May the JV refuse to submit actual cost data attributable to just one of the partner firms, arguing that this is proprietary data?
  • Is the JV required to have an accepted accounting system, if both partner firms in the JV already do?

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I am not an expert on JV's but I do have some experience with it. My view is as follows:

1. A JV is a separate legal entity and acts as the contracting party. Therefore, TINA applies to the proposal submitted by the JV, if the threshold and conditions of TINA apply. The JV authorized individual must sign the certificate.

2. If the JV proposal is to be submitted to the Government, I don't see any way it can limit Government access to all the required element data. If the JV proposal is to be submitted to a prime contractor, the JV may submit summary element data to the prime if it permits Government audit of the details. In any event, The JV may conceivably permit that only a limited number of partner JV employees have access to it.

3. If the JV is set up such that one of the JV partners acts as the accounting function, its acceptable system would be the one applicable.

Edited by Neil Roberts
typo

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Sunstrider,

You haven't provided sufficient information to answer the question. One critical piece of info is how the JV plans to operate. Will it subcontract all work to the member entities or self-perform some? The operating approach is critical to know.

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Elaborating a little on what H2H said, a JV can be populated (have its own employees) or unpopulated (not have any employees of its own).  Further, a JV can be a separate legal entity or it can be little more than a teaming arrangement between the members.  Obviously, these factors can have a significant impact on what obligations flow to the JV itself or the JV members.

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