ALERT M|E: GAO Decision is a Cautionary Reminder for Joint Ventures
GAO decision is a cautionary reminder for companies who want to form a joint venture (JV) for federal contracts.
For many contractors, forming a JV can be a lucrative avenue to unlock revenue, particularly where each company, alone, doesn't have the past performance to compete. Importantly, one aspect to every successful JV is its operating agreement (JVA).
Often overlooked in the JVA, however, is which company has the authority to file a protest for the JV. While the managing venturer (MV) may have that authority under its management duties, failure clarify this right in the JVA could be problematic.
This issue surfaced here. Briefly, after the MV filed the protest, its joint venturer emailed GAO and said that the JV "should not protest the award" and that the JVA required a consensus among the joint venturers before filing a protest. The MV said that it had authority under its "management duties."
Unfortunately, GAO will not hear disputes between joint venturers regarding how their JVA should be interpreted. As a result, GAO could not "conclude that this protest was filed by an interested party" and dismissed the protest.
Though perhaps rare, this protest shows what can happen when a JVA doesn't provide express protest authority.
GAO Decision: https://lnkd.in/edW9Crm