The Government Accountability Office (GAO) recently released a decision in the matter of FedServ-RBS JV, LLC, B-411790, October 26, 2015, that offers little assurance for small companies seeking to form SBA-approved joint ventures in pursuit of government business.
Though consistent with GAO precedent and apparently in concert with Small Business Administration (SBA) regulatory guidance, the decision puts significant cost risk on aspiring joint venture partners and forces contracting agencies to award to second-place bidders if the SBA fails to timely approve a joint venture request.
On May 29, 2015, the Army Corps of Engineers received five timely proposals for a competitive 8(a) set aside contract. One of the proposals was from the protester, FedServ-RBS JV. FedServ, an 8(a) participant, and RBS, a non-8(a) small business, formed the joint venture in advance of the proposal and submitted their JV application to the SBA on June 4, 2015. On June 16, the SBA responded with a deficiency letter setting forth certain apparently curable missing items from the application. FedServ-RBS unfortunately did not respond to the letter immediately, and provided an updated JV application that the SBA received on July 2.
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