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FLGOVCON70- GovCon Joint Venture Accounting

In this episode Jenny Clark talks about GovCon Joint Venture Accounting for All Small Mentor-Protégé Program.

What is a Joint Venture?

Joint Ventures in Federal Contracting

  • Two (or more) Companies create a third company
  • Usually a legal entity, new corporation
  • Purpose to go after Federal Contractors with combined strength
  • Joint Venture must meet criteria for federal contracting (SAMs registration, DCAA compliance, facility security clearance, etc.)

What is the All Small Mentor-Protege

All Small Mentor-Protégé Program

  • Online Application for approval by SBA
  • Turnaround usually 30 to 90 days
  • Qualifications of the Protégé apply to the JV
  • May have more than one Protégé
  • Method for Small Business to lean on larger company for financial strength and organization
  • Method for “Other Than Small” to team on small business and other statuses (WOSB, VOSB, Hubzone)
  • 8A Mentor-Protégé still available with different rules

How Would a Joint Venture Help Your Company?

Benefits of Joint Ventures

  • SUSTAINABILITY: Manage Your Size Standards – longer term contracts without exceeding your NAICS codes
  • SCALABILITY: Combined strengths of JV Partners
  • BANKABILITY: JV invoices and collects, but has minimal costs itself
  • CREDIT ABILITY: PEERS – not Prime/Sub – MITIGATION of RISK
  • EXTENDABILITY: Combined team to pursue other activities
  • SHARE ABILITY: team stronger than individual members

How Would a Joint Venture Help Your Company?

  • More Ways to Work with Partners on PEER level
  • One More Strategy to Broaden Your Base
  • Formalize Long Term Relationships

How does Joint Venture Accounting Work?

  • Joint Venture WINS Contract
  • ADMINISTRATIVE Function in the Joint Venture usually managed by one of the partner organizations
  • Partner A performs monthly work and invoices JV
  • Partner B performs monthly work and invoices JV
  • ADMIN at JV combines invoices and submits for payment
  • Customer pays invoices to JVs
  • Payment deposits in JV account
  • ADMIN processes payment to Partners for monthly invoices

Ask Yourself!!

Do you have business teaming relationships with larger companies who might consider a Joint Venture?

What would you need to learn about All Small Mentor Protégé to consider it fully?

Have you identified larger opportunities worth pursuing if you had a long term partner?

 

Would you want to participate in our JV Boot Camp Program?

E-mail me: jwclark@solvability.com

 

To contact Jenny W Clark

CEO, Solvability, Inc

www.solvability.com

Phone256-882-6276
E-mailjwclark@solvability.com
LinkedinSolvabilityjwc
TwitterSolvabilityjwc

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