On May 19, 2023, the General Services Administration (GSA) issued Multiple Award Schedule (MAS) solicitation refresh 16, which introduced a formal offer process for joint ventures.To provide guidance on navigating those changes, GSA also issued a list of Frequently Asked Questions (FAQ) for joint ventures.The FAQ illuminates both positive and negative implications.
The Good
Starting off with the good news: we now have official confirmation that joint ventures can hold a GSA MAS contract.Although this is old news to the many joint ventures that already hold GSA schedules, some in the industry were unaware it was possible for an unpopulated joint venture with little to no sales history to qualify for the schedule.This FAQ publicly confirms this avenue for growth.
Unrelated to the GSA schedule itself, another positive found in this announcement is that GSA officially confirms that when a Mentor-Protégé Agreement (MPA) pursuant to the Small Business Administration (SBA) Mentor-Protégé Program ends, the same mentor and protégé can enter into a second MPA together.This is consistent with SBA's brand-new regulations, which provide that a protégé may elect to renew its MPA with the same mentor, thereby reaching 12 years for the relationship, rather than six.
The Bad
Despite this good news, GSA's guidance is frustratingly impractical and will almost certainly be impossible to implement (wait for the revision).In the past, a joint venture would be awarded labor categories which could be utilized by any joint venture member to fulfill the required mentor-protégé workshare of 40% for the protégé (if applicable).Mid-contract, GSA has cast that fundamentally sound approach aside.In its place, GSA no longer permits joint venture partners to share labor categories.Instead, each member must propose and perform under their own separate (and not overlapping) labor categories.To make matters worse, GSA is requiring the joint venture partners to identify the source of labor for each partnerfor the life of contract. GSA will also require existing joint venture MAS contracts to conform their labor categories to this new convention. We hope joint venture members have their crystal balls ready, because not only does this require joint venture partners to predict well in advance how they are going to perform under all task orders in the future, but mentor-protégé joint ventures (MPJVs) or joint ventures where only one member has a given socio-economic status also have the added wrinkle of having to be able to do so with enough specificity to ensure they will be able to meet SBA's performance of work requirements-years in advance!Although the GSA schedule is not a set-aside contract, orders thereunder may be, and according to GSA's new solicitation refresh, joint venture partners must have been able to adequately predict which of the protégé's labor categories might make up a minimum of 40 percent of a future set-aside task order's statement of work.
This change unnecessarily complicates proposal submissions and may even deter small business joint ventures from competing for set-aside task orders under GSA schedules.Worse still, there is no reason for this change.Current joint ventures' holding schedules have been able to comply with both GSA and SBA rules without locking in labor categories for decades.Hopefully, GSA will promptly recognize the error of its ways and revert to its prior rule.
Finally, GSA is now requiring all parties to a joint venture to submit a Commercial Sales Practice report.This may introduce an additional layer of risk joint venture parties may want to consider before competing for a GSA Schedule.
Special thanks to Jennifer Aubel, senior manager of government contracting at Aprio, for contributing to this blog post.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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