On November 30, 2020, Diz Locaria was quoted in Law360 on the U.S. Small Business Administration’s (SBA) final rule stating that a mentor-protégé joint venture can use a facility security clearance from one of its partner companies, as long as related information is kept within the secured facility.
According to the article, the SBA's proposal may not make any practical difference for joint ventures seeking federal deals that involve classified information, because the SBA doesn't have the authority to either issue or deny security clearances. Contracting agencies may choose to defer to the U.S. Department of Defense's position on the rule, which hasn't been publicly stated.
Locaria said that having the option of a joint venture effectively sharing a clearance with partners in the venture is "as it should be," and would resolve a long-standing issue that has frequently disadvantaged, if not outright blocked, joint ventures when they are competing for opportunities they were specifically formed to seek out.
"It will really clear a path for parties to now joint-venture for that type of work, whereas before there was always some hesitation because you didn't know how that would ultimately play out," said Locaria, who frequently works with small business contractors and often advises clients on contracting issues and how they intersect with the formation of new businesses.
Not all of the changes in the rule will be positive for all small business contractors, Locaria said, pointing to a requirement that contractors recertify their size for each order made under federal multiple-award contracts. He also cited a clause that will make a company lose its eligibility for a small business set-aside deal it has been offered if it is involved in a merger or acquisition deal within 180 days of that offer that affects its size status.
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