Companies that lack the total expertise to bid on a local or State government contract in California can have the opportunity to bid under certain requests for solicitations and advertisements for bids. Two or more companies can pair up to bid pursuant to a joint venture agreement, or even a teaming arrangement.
Typically the government customer will ask for a joint venture license prior to award of the contract. What does a “joint venture license” mean? This is a specific type of license issued by the Nevada State Contractors Board. The NSCB answers the question of who must be licensed. “Licenses may be issued to individuals, general partnerships, limited partnerships, corporations, limited liability companies or joint ventures.”
As of the publication of this article the fee one must include with the application is $300 and then another $600 for the two-year license fee. Go here for more information at the NSCB.
The license is not the only thing needed to make the “joint venture”. Responsible companies will enter into a written joint venture agreement, usually drafted by legal counsel. That agreement will specifically delineate who is responsible for what and how the arrangement will conclude. Note that applying for the license does not mean you are properly set up as a joint venture as between the parties in the venture.
Be careful to make sure you obtain the license before you submit any bids. The NSCB states that “It is unlawful for any two or more licensees, whose licenses have been limited by the Board to contracts not exceeding certain monetary sums and each of whom has been issued a license to engage separately in the business or to act separately in the capacity of a contractor within this State, jointly to submit a bid or otherwise act in the capacity of a contractor within this State without first having secured an additional license for acting in the capacity of such a joint venture or combination in accordance with the provisions of this chapter as provided for an individual, copartnership or corporation.” NRS 624.740.
This should not be taken as specific legal advice. If you need legal advice specific to your situation or if you need a joint venture agreement drafted, please contact us by any means listed here.