Joint Venture Authority (JVA)

A Joint Venture Authority (JVA) is a formal agreement, recognized by the Procurement Strategy for Indigenous Business (PSIB), in which two or more firms create a legal entity to bid on and carry out a government contract. It lets firms combine their capacity and compete for federal work that none of them could win alone, provided the venture meets the ownership, control and content rules set by the strategy.

Federal documents use the plain phrase "joint venture" and do not use the abbreviation JVA. Publicus uses Joint Venture Authority (JVA) as a label for the authority that PSIB gives qualifying joint ventures to register as Indigenous businesses and bid on set-aside contracts. The rules behind the label come from Indigenous Services Canada (ISC) and are described below.

How PSIB treats joint ventures

ISC describes PSIB as a strategy that reduces barriers, advances reconciliation and supports the growth of Indigenous businesses. It does this by limiting bidding on certain federal contracts to Indigenous businesses that meet defined eligibility criteria. ISC states that joint ventures are one way Indigenous businesses can build their capacity and benefit from skills development and knowledge transfer. Details are on the ISC procurement strategy page.

ISC defines an Indigenous-controlled joint venture as a business made up of two or more Indigenous businesses, or of an Indigenous business and a non-Indigenous business, where the Indigenous partner or partners hold at least 51% ownership and control. A venture that meets this definition and stays within the PSIB criteria may bid on set-aside opportunities.

The 51% and 33% thresholds

Two numbers define eligibility. The business must be at least 51% Indigenous owned and controlled. On a set-aside contract, at least 33% of the total value of the work must be performed by the Indigenous business that wins the contract, or by a combination of that business and other businesses that also meet the 51% test. ISC calls this the Indigenous content criterion, and it must be maintained throughout the life of the contract. Both rules are set out in ISC background material on PSIB.

An Indigenous business must also be actively registered on the Indigenous Business Directory (IBD), or on a modern treaty business list, at the time of contract award. ISC states that Indigenous employment is not part of the definition of a joint venture or any other type of Indigenous business. Ownership and control are the defining elements.

What the joint venture agreement must show

ISC's facts on federal Indigenous procurement explain why contractual joint ventures exist. Some Indigenous businesses lack the capacity to compete for larger federal contracts, and a joint venture lets them partner with other businesses, including non-Indigenous ones, to compete. The ISC facts page adds that the agreement must demonstrate that the Indigenous partner has a lead role in business activities. That partner carries direct responsibility for managing and executing the core activities of any contract the venture receives. Non-Indigenous partners can provide technical and operational support.

ISC reports that about 2,900 businesses are registered on the IBD, of which 111 are joint ventures, which is less than 4% of registrations. It has begun a reverification of all 111 joint ventures to confirm they still meet the criteria.

How JVA differs from joint venture usage elsewhere

The phrase "joint venture authority" has a separate meaning in United States federal practice. There it refers to the statutory power of an agency to enter joint ventures. The National Technical Information Service relies on 15 U.S.C. 3704b for this, as explained in a Federal Register notice. That is a power held by a public body, not a status held by a bidder.

NATO uses a different test again. In an Allied Command Transformation bidding Q&A, a consortium or other partnership agreement (joint venture) is understood as collaboration between two or more companies with joint and several liability. One member acts as lead contact, and a prime and subcontractor relationship does not count as a consortium. See the NATO Q&A document. A JVA in the Canadian sense is tied to PSIB eligibility, not to liability structure.

What a JVA means for a supplier bidding on Canadian public contracts

If you want to bid on a PSIB set-aside as part of a team, check three things before you submit. First, confirm that Indigenous partners hold at least 51% ownership and control of the venture. Second, confirm that the work split will keep at least 33% of the contract value with qualifying Indigenous businesses for the full term. Third, confirm that the agreement gives the Indigenous partner the lead role in managing and executing core work. Non-Indigenous firms should plan for a support role in technical and operational delivery.

Registration also matters. CanadaBuys publishes guidance on registering a joint venture supplier. Because ISC is reverifying joint ventures on the IBD, keep your ownership, control and agreement records current.