Does Having a Joint Venture Guarantee Success? Moderator: Charysse - PowerPoint PPT Presentation

Does Having a Joint Venture Guarantee Success? Moderator: • Charysse Knotts, Federal Sales Director, Black & Veatch Speaker: • CDR (Ret.) Christine Yerkes, PE, CEO Yerkes South

CREDITS & PRESENTATIONS Earn 1 PDH Credit for Attending this Session Where are the PDH forms for Education Sessions? Where are the Presentations? www.samesbc.org

Overview 1. Introduction 2. Why am I speaking about this? 3. New Business Challenges & Entering the Federal Marketplace 4. Increasing trend…Teaming, Mentor Protégés, and Joint Ventures 5. Examples 6. How to choose a good partner 7. Lessons Learned 8. Is it worth it? Why? 9. Resources 10. Questions and Discussion

Christine Yerkes, PE, MBA, CGC 1988-1999 - Active Duty Navy Civil Engineer Corps (NAVFAC, PW, Seabees) • • 2000-2013 - Reserve Navy Civil Engineer Corps • 2000-2001 - URS Corporation QA/QC Manager 2001-2003 - Recalled to Active Duty after 9/11 – ATFP Contracting then FSCM • • 2003-2007 - NAVFAC SE NAS Pensacola Technical Director Engineering and Construction (Civilian) 2007-2009 - Project Mgr., NAVFAC SE, Gulf Coast • 2009-2015 - USACE Resident Engineer - Administrative Contracting Officer, Eglin AFB • • 2015 – Full time as CEO of Yerkes South, Inc.

Yerkes South Partners • Yerkes South – H2H JV . - Geoscience and Engineering, CM services • Yerkes South – Advanced Roofing JV (ASMPP) – Roofing, Solar, HVAC • Yerkes South – Maverick JV – NASA, Cape Canaveral, Patrick AFB • Yerkes South – BERS JV – Environmental Remediation Services • HydroGeoLogic Inc. (HGL) – Mentor under SBA All Small Mentor Protégé Program (ASMPP) – • Cross Environmental Services (CES) – Teaming Partner • Hydra Engineering and Construction - Teaming Partner

Why am I speaking about this? • I understand and want to share our experience: • Starting a small business is HARD! • Starting a FEDERAL small business is HARDER! • Succeeding as a FEDERAL small business is VERY HARD & RISKY. • Help others save time and heartache • Start the discussions and networking (pass the sign in sheet) • Ask questions of each other • Share best practices

New Business Challenges & Entering Federal Marketplace Getting Started Normal new business challenges – financing, hiring etc… • Registering company for federal work (DUNS, CAGE, SAM and more) • • Knowledge of the Industry Government Systems (Invoicing, RMS/QCS, Projnet and more) • Language – Need to be fluent in “Acronym”. • • Potential Clients • Rules, regulations and laws go on and on and on

New Business Challenges & Entering Federal Marketplace Roadblocks to Getting Your first Contract Marketing your capabilities • • Bonding Past Performance • • Financing Solutions to these hurdles Start up with private, city and state work • • Teaming Joint Ventures • Mentor Proteges •

Teaming, Mentor Protégé, & Joint Ventures • Common definitions • Similarities • Differences • When to use each tool • Advantages/Disadvantages • Examples

Teaming • Prime and Subcontractor relationship • What does the contract say? • Written Agreement • Complimentary capabilities • Experienced • Past Performance Ratings • Reputation • Affliliation

Mentor Protégé Programs • Many programs – SBA, DOD (oldest), Air Force…. • 8(a) Mentor Protégé vs All Small Mentor Protégé Program • Both controlled by SBA • ASMPP (2016) • Approving authority same but office approving is different Rules and Regulations - confusing & frequently change • Affiliation •

Men·tor, noun. An experienced & trusted adviser. To be eligible to serve as a mentor, an entity must demonstrate that it’s: 1. Capable of carrying out its responsibilities 2. Be of good character 3. Not debarred or suspended 4. Brings Value, experience, in government contract ing

Protégé, noun. A person who is guided & supported by an older &/or more experienced or influential person. To act as a protege, an entity must demonstrate: 1. Must be small under its NAICS code. 2. Not affiliated, however, can sell up to 40% of company to Mentor to raise capital 3. Current Business Plan

SBA Mentor Program Highlights Expanded All Small Mentor-Protégé program allows all types of small businesses to • qualify as protégés, while retaining, but slightly revising, its existing 8 (a) mentor- protégé program for participants in the 8(a) Business Development program. The final rule became effective on Aug. 24, 2016. SBA has began processing • applications late 2016. Like the current rule for 8(a) protégés, the final rule permits small business protégés • and their SBA-approved mentors to form joint ventures that qualify for contracts set aside for small businesses or any other socioeconomic category for which the protégé firm qualifies. The rule thus greatly expands the pool of potential joint venture partners for large businesses seeking to compete for set-aside contracts. • Joint venture agreements between mentors and protégés for non-8(a) joint ventures under the new rule will not require SBA approval prior to the award. Instead, they are self-certified and subject to potential review by SBA in a formal size or status protest. • Small business joint ventures must be unpopulated

Joint Venture and Mentor Protégé • 8(a) and ASMPP to help grow a small business • JV is a way Mentor can be small • 3 in 2 rule • Application, Approval and Implementation • Paperwork and Reporting • Regulations • Accountability

Joint Ventures – SBA ASMPP Rules • Protégé = managing venturer of the joint venture. • The protégé must own at least 51 percent of the joint venture ownership interests and receive a commensurate share of the profit. • The joint venture must perform the percentage of work on a set-aside contract required by the applicable The protégé must perform at least 40 percent of the work performed by the joint venture partners, including the affiliates of the non-small business partner through subcontracts at any tier. • The protégé must perform more than administrative and ministerial tasks. • The joint venture must establish a special bank account. • The joint venture agreement must itemize all major equipment, facilities and other resources to be furnished by each party. • The joint venture agreement must specify the responsibilities of the parties. • The joint venture agreement must provide that each partner will ensure performance of the contract if the other member withdraws or fails to perform. • Each party to the joint venture will be required to sign a "certificate of compliance" attesting to compliance with the provisions of the joint venture agreement and that the parties will perform in compliance with the performance of work requirements. The certificate must be provided by the protégé to both the SBA and contracting officer prior to performance of any set-aside contract. • Each joint venture party must allow the SBA, including the SBA's Office of Inspector General, "to inspect and copy all records and documents."

Why do a Joint Venture? Benefits for the Small Business - Managing Member 1. Meet your business goals faster 2. Bonding 3. Past Performance 4. Obtain technical and management assistance 5. Obtain financial assistance 6. Help in contract performance 7. Learn new skills 8. Expand your markets, geographically and technically 9. Enhance your capabilities overall

Why do a Joint Venture? Benefits for more established JV member 1. Entry into Small Business if Large 2. JV eligible for Set Asides 3. Limit your risk with small businesses 4. Develop a niche company to expand capabilities 5. Maintain existing relationships 6. Expand into new markets 7. Get a Gold Star from SBA!

1st JV - H2H Engineering & Geo sciences • 1993-2003 Dr. Richard Hisert - Employed at Rust E&I/Earth Tech, Head of Construction Materials and Mining Group • 2003 Established H2H and in 2005 H2H is SBA Certified 8(a) Firm, Co-Owner and Founder • 2015 8(a) Certification expires • 2016 Met YSI at SAME SBC Conference in New Orleans • 2017 Established formal JV with Yerkes South, Inc.

1st JV - H2H Engineering & Geosciences • How we met • What Clicked? • To Mentor Protégé or not to Mentor Protégé was the question • Has it been successful • Lessons learned • What would I change?

2 nd Second JV – Advanced Roofing • 1983 – Robert Kornahrens established Advanced Roofing • Family Owned and Operated Company • Roofing, Solar, HVAC • Bonding: $50 million per project, $150 million aggregate • General Liability insurance coverage of $25 Million • 490 + personnel • Full-time Safety Division - EMR=0.58

2 nd Second JV – Advanced Roofing • How we met • What Clicked? • Eglin AFB IDIQ Roofing Contract • ASMPP opened doors so jumped in • Lessons learned • Has it been successful? • What would I change?

Am I a good Joint Venture Partner? 1. Experienced personnel 2. Realistic expectations 3. Smart & hard working 4. Willing to let go 5. Trustworthy 6. Knows that they don’t know everything 7. Committed 8. Surrounds themselves with good/better people 9. Small Business Set Asides