Morrison Foerster’s Government Contracts Insights provides our in-depth analysis of developments and trends impacting government contracting. Through Insights, our attorneys offer a real-time assessment of the statutory, regulatory, legal, and business-related developments and trends that are shaping the industry. We also examine a full array of non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Morrison Foerster’s nationally recognized Government Contracts and Public Procurement practice represents the world’s leading companies in the aerospace and defense, intelligence, cybersecurity, information technology, financial and professional services, education, healthcare, infrastructure, and logistics support sectors. We are enlisted to address our clients’ most complex and important legal issues. Our work includes contract and subcontract negotiation and other transactional matters, business and regulatory compliance counseling, internal investigations, bid protests, and a wide array of enforcement and litigation matters. Our clients range from Fortune 50 companies to small and medium-sized companies just entering the public sector. We advise both U.S. and non-U.S. companies involved in municipal, state, federal, and non-U.S. procurement matters.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Tina is Co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmaceutical companies, with a focus on general contract counseling and compliance, particularly concerning intellectual property, and cybersecurity matters and federal grant funding.Tina counsels contractors on compliance with federal, state and local acquisition and ethics regulations and with the evolving myriad of requirements pertaining to data security and cybersecurity. She has been involved with numerous internal investigations and compliance reviews, and with mandatory and voluntary disclosures to agencies, and litigation of False Claims Act matters.Tina routinely advises clients concerning:<ul><li>Prime-subcontractor relationships</li><li>Sources of supply and country of origin requirements</li><li>Price reductions and price reporting issues</li><li>Organizational conflicts of interest</li><li>Safeguarding of intellectual property and other proprietary interests</li><li>Licensing and data rights issues</li><li>Handling of classified materials and controlled unclassified information</li><li>Agency suspension and debarment proceedings</li></ul>She also assists clients with due diligence and other activities related to the acquisition of government contracting concerns, and with the drafting and negotiation of teaming agreements, subcontracts, licensing agreements, and cooperative research and development agreements. She also assists clients applying for federal grants (including SBIR and STTR agreements), and those who seek to obtain other transactional authority agreements, as well as those competing for state and local government work.Tina’s litigation experience includes government contracts claims litigation in federal courts and before boards of contract appeals, bid protests before the Government Accountability Office and the Court of Federal Claims, and complex disputes in federal courts, including civil fraud and False Claims Act litigation and reverse Freedom of Information Act litigation.Prior to joining Morrison Foerster, Tina worked at another large national firm and as a trial attorney in the Office of the General Counsel of the Navy, Navy Litigation Office.<h4>Representative Experience</h4><ul><li>Negotiation of largest CHIPS Act federal funding agreement between multinational semiconductor corporation and U.S. Department of Commerce.</li><li>Negotiated prime contract and major subcontracts related to the Department of Energy’s next generation supercomputer program, including extensive IP rights negotiations and negotiation of associated patent rights waivers.</li><li>Negotiated series of other transaction authority agreements with DARPA and associated subcontracts with more than a dozen research universities on behalf of a firm biotech client, including complex IP rights allocations and material transfer agreements.</li><li>Assist clients with FedRAMP authorization process and with development of license agreements for software products sold to federal, state and local government agencies.</li><li>Cyber incident response counseling to some of the largest companies and organizations impacted by security incidents.</li><li>Advises clients on Bayh-Dole reporting of inventions and IP strategies for contracts and grants.</li><li>Conducts due diligence for major government contract mergers and acquisitions.</li></ul>

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Tina is co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She counsels a wide variety of government contractors on compliance with federal acquisition and ethics regulations. She drafts and negotiates contracts on their behalf and has been involved with numerous internal investigations and compliance reviews, and with bid protest, contract claims, and False Claims Act litigation. She also advises on M&A transactions involving government contractors.

Tina D. Reynolds

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office.Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters. He has represented both protesters and awardees in scores of protests before the Government Accountability Office, the Court of Federal Claims, and procuring agencies, in acquisitions ranging from small business procurements to multibillion-dollar contracts of global significance. His representative protest matters span the aerospace sector, the Intelligence Community, base operations and logistics, healthcare, nuclear and environmental work, and information technology and software acquisitions. His protests have included both classified and unclassified programs. In addition to prevailing in published decisions, Jim has also secured favorable corrective action on behalf of clients in a wide variety of protests that were resolved without a published decision.Jim’s work also focuses on disputes over cost allowability and compliance with the Cost Accounting Standards, and he has appeared before the Armed Services and Civilian Boards of Contract Appeals, in size and status protests before Small Business Administration (SBA) area offices, and appeals before the SBA Office of Hearings and Appeals. Jim regularly counsels clients on contract interpretation, organizational conflicts of interest, and small business compliance.Jim graduated with high honors from the George Washington University Law School, where he focused his studies on federal procurement law, was a member of the Law Review, and interned with the General Services Administration’s suspension and debarment office. Jim also holds a degree in theology magna cum laude from the Pontifical Gregorian University in Rome and a bachelor’s degree in classical languages and literature summa cum laude from the University of Kentucky, where he graduated Phi Beta Kappa.

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Jim maintains an active practice in bid protests before the Government Accountability Office and contracting agencies and counsels clients in contract disputes and compliance obligations.

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office. Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters.

James Tucker

<div style="margin-bottom: 15px;" class="videoWrapper"><iframe class="sticky-video" title="Meet Alex Ward, Government Contracts Practice Co-Chair" src="https://www.youtube-nocookie.com/embed/TkliwdSlTaQ?rel=0" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen="1" title="iframe"></iframe></div>J. Alex Ward is co-chair of Morrison Foerster’s Government Contracts and Public Procurement group. His practice covers a full range of government contracts matters, including investigations, bid protests, claims, general litigation, corporate transactions, and counseling. Alex strives in all matters is to provide his clients the highest level of efficient and effective representation.Alex represents contractors in internal and external investigations, disclosures to the government, and qui tam litigation, with great success in reducing or eliminating his clients’ exposure through active engagement with the government. His work in this area includes obtaining numerous declinations and dismissals of False Claims Act cases in their earliest stages, sparing his clients the cost, risk, and exposure of litigation.He has also served as lead counsel in dozens of bid protests involving military and civilian agency procurements of a wide range of products and services, including all manner of pre- and post-award protests in the GAO, the U.S. Court of Federal Claims, and state tribunals, as well as appeals to the U.S. Court of Appeals for the Federal Circuit and size protest appeals before the SBA’s Office of Hearings and Appeals.Alex handles all aspects of the claims process, from the initial assessment and drafting of requests for equitable adjustment through litigation in the Boards of Contract Appeals and the Court of Federal Claims. Alex’s practice also covers the full gamut of other controversies confronting government contractors, including prime-sub, teaming partner, employer-employee, competitor, and indemnification disputes. His litigation work also includes a wide variety of pro bono engagements, in which he has represented both individual and institutional clients in matters ranging from immigration and criminal defense to sustainable procurement and protection of the environment.Prior to joining the firm, Alex served in the U.S. Army as a commissioned officer and an Assistant to the General Counsel of the Army responsible for civil works and international matters, and as a clerk for judges on the U.S. Courts of Appeals for the Armed Forces and the D.C. Circuit. He is a member of the Boards of the Morrison & Foerster Foundation and the Chesapeake Bay Foundation and of Law360’s Government Contracts Editorial Board.

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Alex is co-chair of Morrison Foerster’s Government Contracts and Public Procurement practice. His practice covers a full range of government contracts matters, including bid protests, claims, investigations, corporate transactions, and counseling.

J. Alex Ward

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Morrison Foerster’s Government Contracts Insights blog provides an in-depth analysis of news, developments, and trends impacting government contracting and procurement. Through Insights, attorneys from our nationally recognized Government Contracts and Public Procurement practice will offer a real-time assessment of the statutory, regulatory, legal, and business-related developments that are shaping the industry. This blog will also examine a full array of U.S. and non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Read about our <a href="http://govcon.mofo.com/editors/">Authors</a>.Never miss a post. Subscribe to get real-time updates.

Brad is a partner in Morrison Foerster’s Litigation Department, Managing Partner of the Austin office, and Chair of the firm’s Israel practice. He is the former Co-Chair of the firm’s Global Litigation Practice and the Government Contracts + Public Procurement Practice.

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The Small Business Administration’s (SBA) popular shields from affiliation for all-small and mentor-protégé joint ventures are powerful tools for helping small businesses succeed in the federal procurement marketplace.

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Is Your Joint Venture Agreement Compliant with Current Sba Regulations and Current Case Law?  | Government Contracts Insights

Damien C. Specht

James A. Tucker

Alissandra Young McCann

The Small Business Administration’s (SBA) popular shields from affiliation for all-small and mentor-protégé joint ventures are powerful tools for helping small businesses succeed in the federal procurement marketplace. These tools, however, are subject to strict enforcement, iterative rule changes, and growing bodies of case law. To that end, a <a href="https://govt.westlaw.com/sbaoha/Document/Ieea4733b9eb011ed8f9bf7816281f32a" target="_blank">new decision</a> from SBA’s Office of Hearings and Appeals (OHA) reverses a previous OHA rule that had, for the past two years, rendered many otherwise compliant joint venture agreements ineligible for favorable treatment under SBA regulations. This is the latest instance in which the rules for joint ventures have changed, and a good reminder for companies to be sure their joint venture agreements are compliant with the most current regulations and OHA case law. BackgroundIn Strategic Alliance Solutions, LLC, SBA No. VET-278 (2023), OHA took a second look at whether the joint venture appellant was fully controlled by its Service-Disabled Veteran-Owned Small Business (SDVOSB) member and qualified for award in a procurement set aside for SDVOSB concerns. OHA had previously found the appellant’s joint venture agreement was generally compliant with the governing regulations, with one exception: it required unanimous consent of the joint venture members before the joint venture was permitted to initiate litigation or pursue a claim under the contract. OHA relied on its precedents in Seventh Dimension, LLC, SBA No. VET-6057 (2020) and Swift & Staley, Inc., SBA No. SIZ-6125 (2021) for the principle that initiation or settlement of litigation was “essential to day-to-day operation” of the joint venture and, therefore, was not allowed to be subject to minority shareholder consent. OHA found this provision violated 13 C.F.R. § 125.18(b)(2)(ii)(A) (now re-codified at 13 C.F.R. §128.402(c)(2)(i)), which requires a joint venture’s managing member to have full control of all “day-to-day management and administration of the contractual performance of the joint venture.” And, because the SDVOSB managing member did not wholly control the joint venture, the joint venture was ineligible for award of the SDVOSB set-aside contract. After its loss at OHA, the appellant filed a protest at the Court of Federal Claims, arguing that OHA’s decision was improper. In an interesting turn of events, SBA’s Office of the General Counsel took the position that SBA’s OHA was wrong: initiating or settling contract litigation is not an ordinary day-to-day activity, and therefore minority members may be given veto power over litigation decisions without running afoul of the joint venture regulations. SBA also argued that OHA improperly imposed the “negative control” provisions of the general affiliation regulations on the very different regulations governing joint ventures. The parties convinced the court (over the objection of the intervenor) to <a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2022cv1562-35-0" target="_blank">remand</a> the matter to OHA for further consideration. Decision on RemandOn remand, OHA observed that its first decision relied on Seventh Dimension, LLC, SBA No. VET-6057 (2020) and its progeny. OHA then noted that later in 2020, after issuance of Seventh Dimension, SBA revised its regulations governing SDVOSB joint ventures. Although OHA did not find the new regulations were promulgated expressly to undo Seventh Dimension, OHA found the new regulation made a material change by expressly providing that the non-managing partner(s) to a joint venture may participate in corporate governance and decisions “as is commercially customary.” 13 C.F.R. § 125.18(b)(2). In light of this regulatory update, OHA found a litigation decision “is more properly seen as part of corporate governance and is thus an area where the other partners to the joint venture may participate” because “[l]itigation on behalf of the joint venture can have results which might impair the interests of the venturers, and thus it is not inappropriate that [minority member(s)] have the right to approve contract litigation.” Accordingly, a minority member’s ability to block litigation decisions should be permissible under the governing regulations. Therefore, “upon further reflection,” OHA overturned its prior Strategic Alliance Solutions decision and granted the appeal. ImpactAs numerous OHA decisions over the years have demonstrated, it is extremely easy (and perhaps common) for a company accidentally to sign up to a joint venture agreement that fails to comply with one of the many nuanced requirements of the small business regulations or applicable case law. Noncompliance often involves omission of one of the long list of items the regulations require joint venture agreements to have. For some time now, savvy companies have had their attorneys review joint venture agreements prior to proposal submission to ensure the agreements are not missing anything that current regulations require. This is particularly prudent given the significant revisions to the joint venture regulations in recent years. Since OHA issued its Seventh Dimension decision in 2020, however, SBA and protesters are more heavily scrutinizing additional terms joint venture agreements might include for the possibility of “negative control”—i.e., whether a particular provision gives minority member(s) the ability to block activities that an SBA analyst or OHA might consider “ordinary” business decisions. Companies not well versed in the nuances of OHA case law may not see any risk in a customary provision that could render them ineligible for award. Many companies do not seek legal review for these risks. Or they did so years ago, before Seventh Dimension articulated a harsher standard than SBA previously applied in practice. Strategic Alliance Solutions has now altered the rules again, rolling back Seventh Dimension, at least with respect to the question of whether litigation decisions are ordinary or extraordinary actions, but apparently leaving it otherwise unchanged. It is uncertain how or whether the Strategic Alliance Solutions decision will affect negative control analysis under the separate regulations governing small business affiliation in general. Is the ability of a third party to veto litigation decisions indicative of negative control outside the context of joint ventures? The Strategic Alliance Solutions decision does not directly answer that question. The new Strategic Alliance Solutions decision is welcome news, but also a good reminder for companies to consider whether their own joint venture agreements comply with both current regulations and OHA’s most recent case law.

Is Your Joint Venture Agreement Compliant with Current Sba Regulations and Current Case Law? 

Is Your Joint Venture Agreement Compliant with Current SBA Regulations and Current Case Law?

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