On January 15, 2026, SBA's Office of Hearings and Appeals issued VSBC-459-P, clarifying that compliance with the ostensible-subcontractor rule and joint-venture agreement requirements is determined as of the date of final proposal revision — not the date of initial offer. The decision matters significantly for negotiated procurements where firms can update their JV agreements between rounds. Coverage from SmallGovCon.
What 13 C.F.R. § 134.1003(e)(1) actually says
For protests challenging an ostensible subcontractor or a JV's compliance with JV agreement requirements (set forth at § 128.402(c)), the OHA Judge determines eligibility as of:
- Final proposal revision for negotiated acquisitions
- Final bid for sealed bidding
This is an exception to the general rule that eligibility is judged at initial offer. It changes outcomes for any procurement that proceeds through corrective action or multiple proposal rounds.
Practical implications
- If a JV agreement that was originally compliant is no longer compliant at final proposal revision, the offer can be disqualified
- Conversely, JV agreements amended to comply between initial and final offer can rehabilitate an otherwise-vulnerable team
- Updated JV agreements should be in place before final proposal submission, not just before initial bid
What to do
- Review JV agreements before every final proposal revision — not just at the initial bid
- If a regulation has changed during a procurement (e.g., the January 17, 2026 SBA recertification rule), confirm your JV still meets the current rules at final submission
- For protesters: this is a new ground — challenge JV teams whose agreements weren't updated through final proposal revision