Joint Ventures in Government Contracting 2025: Complete Guide
Complete guide to joint ventures in government contracting. Learn about JV types, formation requirements, small business affiliation rules, and strategies for successful partnerships.
Quick Answer: Joint Ventures
A joint venture (JV) combines two or more companies to pursue specific government contracts. Small businesses can use JVs to compete for larger contracts while maintaining small business status. JVs formed under SBA's mentor-protégé program offer additional benefits.
What is a Joint Venture?
A joint venture is a business arrangement where two or more entities combine resources to pursue specific contracts. Unlike a merger, a JV maintains the separate identity of each partner.
JV Benefits
- ✓Combine capabilities to compete for larger contracts
- ✓Share risk and resources
- ✓Small businesses can maintain small business status
- ✓Access partner's past performance and experience
Types of Joint Ventures
Small Business-to-Small Business JV
Two or more small businesses partner to compete for set-aside contracts:
- • All partners must qualify as small for the NAICS
- • Combined capabilities meet contract requirements
- • JV can bid on small business set-asides
Mentor-Protégé Joint Venture
A small business protégé partners with a mentor (often large business):
- • Must have approved mentor-protégé agreement
- • JV qualifies as small for set-asides
- • Protégé must perform 40% of work
- • No affiliation with mentor
Populated vs. Unpopulated JV
Unpopulated
JV has no employees—work performed by partner companies
Populated
JV has its own employees who perform work
Small Business Joint Venture Requirements
SBA Requirements for Small Business JVs
40% Performance Requirement
Small business partner(s) must perform at least 40% of the contract work
3-Contract Limit
JV can receive maximum of 3 contracts under small business set-aside programs
2-Year Duration
JV agreements generally limited to 2 years (with extensions possible)
Written Agreement
Must have a formal JV agreement meeting SBA requirements
Forming a Joint Venture
JV Agreement Requirements
Registration Requirements
- ✓Register JV entity in SAM.gov with its own UEI
- ✓Certify JV in SBA's certification system if applicable
- ✓List JV in proposal with partner information
Affiliation Rules
SBA's affiliation rules determine if businesses are considered together for size determinations. Understanding affiliation is critical for JVs.
Key Affiliation Exceptions for JVs
Mentor-Protégé Exception
Approved mentor-protégé JVs are not affiliated for size purposes
Small-to-Small Exception
Two small businesses meeting requirements aren't affiliated solely because of JV
Affiliation Warning
Be careful with JV agreements that give one partner control over the other. Excessive control can trigger affiliation, making both businesses count as one for size purposes.
Frequently Asked Questions
Can a JV use partner's past performance?
Yes. JVs can cite the past performance of their individual partners in proposals. This is a key benefit—it lets newer companies leverage partner experience.
Do I need a separate JV for each contract?
Not necessarily. A single JV can pursue multiple opportunities, but small business JVs are limited to 3 set-aside contracts before losing small business status.
How is the 40% work requirement calculated?
The small business partner(s) must perform at least 40% of the work. For services, this is typically measured by labor costs. The JV agreement should specify how work is divided.
Find Joint Venture Opportunities
Discover contracts suited for joint venture competition—larger opportunities with small business set-asides.
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