Question 1

How much work must the SDVOSB perform in a joint venture?

Accepted Answer

For SDVOSB set-aside JVs, the limitations on subcontracting rules apply to the JV as a whole. The SDVOSB managing venturer must perform at least 40% of the work performed by the JV. However, the JV must still comply with the overall limitations on subcontracting — at least 50% of the cost of personnel for services must be performed by the JV members (not outside subcontractors).

Question 2

What are the limitations on subcontracting for SDVOSB set-asides?

Accepted Answer

For SDVOSB set-aside contracts, the prime contractor must comply with limitations on subcontracting in FAR 52.219-14. For service contracts: the SDVOSB must perform at least 50% of the cost of personnel. For supply contracts: at least 50% of the cost of manufacturing. For construction: at least 15% of the cost of the contract. Similarly situated subcontractors (also SDVOSBs) count toward these requirements.

Question 3

What are the requirements for the SDVOSB managing venturer?

Accepted Answer

The SDVOSB managing venturer must: control the JV's management and daily operations, provide the project manager (who must be an employee of the SDVOSB, not the large business partner), make final decisions on personnel matters and contract performance, and maintain financial control including signing checks. The managing venturer cannot be a large business — only an SDVOSB can serve in this role for an SDVOSB set-aside JV.

Question 4

Can an SDVOSB form a joint venture to pursue set-aside contracts?

Accepted Answer

Yes. SDVOSBs can form joint ventures (JVs) to pursue set-aside contracts. The JV must be controlled by the SDVOSB member — meaning the SDVOSB must be the managing venturer and must perform at least 40% of the work. The SDVOSB must also be responsible for managing the JV on a day-to-day basis. The JV agreement must be in writing and meet SBA regulatory requirements.

How much work must the SDVOSB perform in a joint venture?

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