SDVOSB Joint Venture Compliance Checklist
A joint venture lets an SDVOSB pursue work it couldn't win alone — but only if the JV agreement is built to the rules. SBA examines JV agreements closely on protest, and a missing required provision can sink an award. Run this checklist against the written agreement before the JV submits an offer, and confirm the work-share math holds across the whole effort.
Who Should Run This
- SDVOSBs forming a joint venture to pursue a set-aside
- Mentor-protégé teams structuring a JV under the SBA program
- Counsel drafting or reviewing an SDVOSB JV agreement
Control & structure
The SDVOSB is the managing venturer and names an employee as the JV's responsible manager.
The SDVOSB partner must control the JV: it is the managing venturer, and an employee of the SDVOSB serves as the project/responsible manager (13 CFR 128.402, applying the 13 CFR 125.18(b) JV requirements).
The SDVOSB owns at least 51% of the joint venture entity (if the JV is a separate legal entity).
Where the JV is formed as a separate legal entity, the SDVOSB must own at least 51% of it, mirroring the ownership control principle.
The JV is unpopulated (or populated only with administrative staff), not staffed to perform the contract itself.
The current rules contemplate an unpopulated JV — the partners perform the work, the JV does not employ the people doing the contract work.
Required written-agreement provisions
The written JV agreement sets out the purpose of the joint venture.
The agreement must state its purpose and is a mandatory document SBA will review on a protest.
The agreement itemizes the responsibilities of the parties for performance and source of labor.
It must specify the responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance (13 CFR 125.18(b)(2)).
The agreement requires the parties to keep separate JV records and ensures the SDVOSB receives profits commensurate with its work.
Required terms include recordkeeping, profits split commensurate with work performed, and bank-account control consistent with the SDVOSB managing the JV.
Work share & performance
The SDVOSB will perform at least 40% of the work performed by the joint venture.
The SDVOSB managing venturer must perform at least 40% of the work done by the JV, and its share must be more than administrative or ministerial functions (13 CFR 125.18(b)(3), applied via 128.402).
The JV (prime + similarly situated venturers) will meet the limitations on subcontracting.
The JV as a whole must satisfy 13 CFR 125.6 — run the Limitations on Subcontracting Checklist on the combined effort.
If relying on the mentor-protégé exception, the mentor-protégé agreement is SBA-approved and current.
A JV between an SBA-approved mentor and its SDVOSB protégé can pursue set-asides the protégé qualifies for without the mentor's size being counted — but only with an active, approved agreement.
Where Firms Fail This Audit
- Using a generic teaming-agreement template that omits the mandatory JV provisions SBA checks on protest.
- Letting the non-SDVOSB partner control the bank accounts or the responsible-manager role.
- Counting the SDVOSB's administrative work toward the 40% JV work-share requirement.
- Assuming the mentor's size never counts — the exception requires an active, SBA-approved mentor-protégé agreement.
- Forgetting that the JV as a whole still has to meet the limitations on subcontracting.
Frequently Asked
How much work must the SDVOSB perform in a joint venture?
The SDVOSB managing venturer must perform at least 40% of the work done by the joint venture, and that share must be more than administrative or ministerial work. The SDVOSB must also be the managing venturer and supply the JV's responsible manager (13 CFR 125.18(b), applied to SDVOSBs through 13 CFR 128.402).
Does an SDVOSB joint venture agreement have to be in writing?
Yes. SBA requires a written JV agreement containing specific provisions — purpose, the managing venturer and named responsible manager, itemized responsibilities, recordkeeping, profit split commensurate with work, and bank-account control. Missing a required provision can disqualify the JV on a status protest.
Can an SDVOSB joint venture with a large business?
Yes, through the SBA Mentor-Protégé Program. A JV between an SBA-approved mentor (which may be large) and its SDVOSB protégé can compete for set-asides the protégé qualifies for without the mentor's size being counted, provided the mentor-protégé agreement is active and approved and the JV meets the other requirements.
Primary Sources
Self-audit aid, not legal advice. SDVOSB rules are still settling after the 2023 transfer of certification to the SBA, and federal acquisition dollar thresholds are periodically adjusted for inflation — verify current figures and procedures against the cited authority and your contracting officer before acting.
Change log (1)
- LaunchedPublished printable, source-cited self-audit checklists for SDVOSB ownership & control, the limitations on subcontracting, joint ventures, the VetCert application package, recertification & status maintenance, and set-aside bid readiness — each with an ItemList of the checks plus FAQPage, Dataset, and BreadcrumbList structured data, primary-source citations, and cross-links into the regulation explainers, how-to guides, glossary, FAQ, and calculators.