VSBC PROTEST OF: SYSTEMATIC INNOVATIONS, LLC, PROTESTOR RE: ALPHA COMMUNICATIONS SERVICES LLC

*2 1) Sets forth the purpose of the joint venture;

*2 2) Designates a certified SDVOSB, American, as the managing venturer of the joint venture and designates American's service-disabled veteran owner, Mr. John M. Schleifer, as the manager with ultimate responsibility for performance of the contract;

*2 3) States that with respect to a separate legal entity joint venture, the certified SDVOSB must own at least 51% of the joint venture entity;

*3 4) States that the certified SDVOSB must receive profits from the joint venture commensurate with the work performed by the certified SDVOSB, or a percentage agreed to by the parties to the joint venture whereby the certified SDVOSB receives profits from the joint venture that exceed the percentage commensurate with the work performed by the certified SDVOSB;

*3 5) Provides for the establishment and administration of a special bank account in the name of the joint venture;

*3 6) Itemizes all major equipment, facilities, and other resources to be furnished by each party to the joint venture, with a detailed schedule of cost or value of each, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated major equipment, facilities, and other resources to be furnished by each party to the joint venture, without a detailed schedule of cost or value of each, or in the alternative, specify how the parties to the joint venture will furnish such resources to the joint venture once a definite scope of work is made publicly available;

*3 7) Specifies the responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, including ways that the parties to the joint venture will ensure that the joint venture and the certified SDVOSB partner(s) to the joint venture will meet the limitations on subcontracting requirements set forth in paragraph (d) of this section, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, not including the ways that the parties to the joint venture will ensure that the joint venture and the certified SDVOSB partner(s) to the joint venture will meet the limitations on subcontracting requirements set forth in paragraph (d) of this section, or in the alternative, specify how the parties to the joint venture will define such responsibilities once a definite scope of work is made publicly available;

*3 8) Obligates all parties to the joint venture to ensure performance of the SDVOSB contract and to complete performance despite the withdrawal of any member;

*3 9) Designates that accounting and other administrative records relating to the joint venture be kept in the office of the certified SDVOSB managing venturer, unless approval to keep them elsewhere is granted by the District Director (or designee) upon written request;

*3 10) Requires that the final original records be retained by the certified SDVOSB managing venturer upon completion of the SDVOSB contract performed by the joint venture;

*4 11) States that quarterly financial statements showing cumulative contract receipts and expenditures (including salaries of the joint venture's principals) must be submitted to SBA not later than 45 days after each operating quarter of the joint venture; and

*4 12) States that a project-end profit and loss statement, including a statement of final profit distribution, must be submitted to SBA no later than 90 calendar days after completion of the contract.

*5 Section 1. Percentage of Ownership. The Members of the Joint Venture are By Light and [American]. As of the Effective Date [i.e., April 12, 2023], there are no other Members of the Joint Venture, and no other person has any right to take part in the ownership of the Joint Venture. Each Member's respective interest in the Joint Venture is [American] — 51% and By Light — 49%. [[American] is the Managing Venturer and By Light is the Partner Venturer of the Joint Venture

*5 Section 3. Allocation of Profit. [American] (SDVOSB) will always receive profits at least commensurate with the work performed, and if the work performed is less than 51%, then [American] will receive at least 51% of the profits.

*5 Section 1. Work share Allocation. The T4NG2 Pool Contract sought by the Joint Venture is a [Government-Wide Acquisition Contract (GWAC)]. Generally, the parties will perform such tasks and work as outlined in Exhibit A. Specific work obligations under the T4NG2 Contract will be established by individual task order. Upon the issuance of workshare under a task order to the Joint Venture, the Responsible Manager, after consultation with the Members and the general workshare distribution listed in Exhibit A, shall determine how to allocate the work to ensure that on each task order:

*5 A. [American] performs at least 40% of the JV Total Workshare, as measured by the total applicable costs, in accordance with 13 C.F.R. § 124.513(d)(2)(i) and its work must be more than administrative or ministerial functions so the Managing Venturer gains substantive experience. For the Contract, the Managing Venturer will perform at least forty percent (40%) of the work. The Venturers will meet monthly to review compliance with this workshare agreement and to ensure the Joint Venture and the Managing Venturer meet their performance and other requirements as stated in this agreement.

*5 B. The Managing Venturer will provide overall executive oversight and will have overall responsibility for managing the Contract to a successful completion. The Responsible Manager will perform the day-to-day management and administration of the Contract. Each of the Venturers will have the right to visit the job site(s) to evaluate the Contract Performance. Regarding the specific Contract tasks, the Managing Venturer will perform major contract functions specifically including those shown in Appendix 1. Said table shows Managing Venturer Responsibilities, Partner Venturer Responsibilities and those anticipated to be shared on a pro rata work share bases among the Venturers.

*6 C. In the event the Responsible Manager cannot allocate the workshare as outlined in Exhibit A and in accordance with either above requirement on a particular task order, the Responsible Manager may seek concurrence of the Members to alter the workshare, provided that the above workshare percentages are maintained for any six-month period, in accordance with the requirements of 13 C.F.R. § 124.513(d).

*6 Section 3. Equipment, Facilities and Resources. Upon award of the Contract, the Managing Venturer and the Partner Venturer will provide the following equipment, facilities, and other resources to the Joint Venture. The cost or value of such equipment, facilities, and other resources to be provided by the Managing Venturer and the Partner Venturer to the Joint Venture is identified after each item listed below.

*6 [American] shall provide office automation equipment for [American] personnel including laptops, printers. [American] will provide the Deltek Costpoint Accounting Systems and maintain the annual license for its use [estimated value: $20,000/year]. [American] shall retain ownership to all equipment and resources provided to the joint venture.

*6 By Light shall provide the Joint Venture with (a) secured compartmented facility space [estimated value: $6,250/year]; (b) administrative and office space in the National Capital Region [estimated value: $9,375/year1]; and (c) use of its Quickshare recruiting process with access to TS/SCI/CI Poly resumes, organic recruiting resources and outsourced third party recruiters [estimated value: $17,600/year2]. The value of these contributions is not considered a Capital Contribution, as defined in Article I, Section 11. By Light shall retain ownership to all facilities and resources provided to the Joint Venture.

*6 Section 4. Source of Labor. The Managing Venturer has submitted a staffing plan outlining its method of maintaining a labor pool throughout the duration of the Contract performance. A copy of the staffing plan is attached hereto as Exhibit B. The Joint Venture will be staffed with existing employees of the Managing Venturer and the Partner Venturer and by new hires that will be made in accordance with the requirement under Executive Order 13495 to provide a right of first refusal to the incumbent contract personnel, as applicable. The Managing Venturer will also utilize existing labor markets to maintain the necessary staffing throughout the duration of the Contract performance. The Venturers recognize that the exact division of work as between themselves will be defined in the Joint Venture's response to the Solicitation and the resulting Contract. They, therefore, agree that the actual allocation of work and staffing between them will be consistent with their proposal and the provisions of SBA's regulations.

*6 Section 5. Limitations on Subcontracting. Subcontracting is contemplated for the T4NG2effort. [ACS] will not subcontract more than 49% of the contemplated workshare for the T4NG2 effort.

*7 Section 7. Contract Negotiation. The Responsible Manager will be responsible for negotiating the T4NG2 Contract, should negotiations be required by the Customer, and any other subsequent negotiations regarding the T4NG2 Contract with the Customer.

*7 Section 8. Ensured Performance. The Members are each obligated independently to ensure performance of any contracts entered into by the Joint Venture and are each obligated independently to complete performance of any contracts entered into by the Joint Venture despite the withdrawal of any Member of the Joint.

*7 Section 1. Bank Accounts. The operating account (“Operating Account”) shall be [[XXXX]. Unless otherwise determined by the Members, the Operating Account and any other bank accounts deemed necessary by the Members shall be held at financial institutions that are federally insured. In accordance with 13 CFR § 125.18(b)(2)(v), the Operating Account shall be established in the name of [[ACS] ....

*7 Section 2. Accounting. The Managing Venturer shall keep the books of account of the Joint Venture on the accrual method in accordance with generally-accepted accounting practices consistently applied utilizing, as long as consistent with the foregoing, the accounting practices and policies of the Managing Venturer ....

*7 Section 3. Books and Records. The Managing Venturer shall keep and maintain accounting and other administrative records including the Joint Venture's books, and any other records relating to the Joint Venture at the principal place of business of the Managing Venturer. ... Accounting and other administrative records relating to the Joint Venture will be kept in the offices of the Managing Venturer, unless written approval to keep them elsewhere is granted by the SBA District Director or his/her designee upon written request. Upon completion of the Contract, the final records of the Joint Venture will be retained by the Managing Venturer.

*7 Section 4. Financial Statements and Financial Reporting. The Managing Venturer shall produce quarterly financial statements showing cumulative contract receipts and expenditures (including salaries of the Joint Venture principals, if any). These quarterly financial statements shall be submitted to the SBA not later than forty-five (45) days after each operating quarter of the Joint Venture.

*7 The Managing Venturer shall prepare an audited balance sheet for each fiscal year within forty-five days of the end of such fiscal year. The Managing Venturer also shall prepare an audited summary of the Joint Venture's receipts and disbursements for each fiscal year.

*7 At the end of each contract entered into by the Joint Venture, the Managing Venturer shall prepare a project-end profit and loss statement including a statement of final profit distribution. The project-end profit and loss statement shall be submitted to the SBA not later than 90 days after completion of the contract.

*8 Section 2. Managing Venturer. In accordance with 13 C.F.R. § 125.18(b)(2)(ii), [American] shall be the Managing Venturer of the Joint Venture. As Managing Venturer, [American] has the power to execute all obligations delegated to the Managing Venturer by this Agreement. The Managing Venturer will make all decisions regarding the management of the Company with the exception of those requiring the consent of the Members. Meetings of the Members shall be held at the principal office of the Company or at any other place that the Managing Venturer determines. Meetings may be held by communicating simultaneously by conference telephone or similar communications equipment. The presence of the Managing Venturer shall constitute a quorum for the transaction of business at a meeting of the Members, and [American] (SDVOSBC) has unilateral control over voting in Members' meeting, except as may be otherwise specifically provided by law. Any Member may convene a meeting upon at least ten (10) business days notice to the other Member(s). A Member waives notice if before or after the meeting the Member signs a waiver of the notice which is filed with the records of the Managing Venturer, or attends the meeting in person or by proxy without objection to the lack of notice at the beginning thereof. Minutes of each meeting and a record of each decision shall be kept by an individual designated by the Managing Venturer.

*8 Section 3. Responsible Manager. [American] shall select an employee of [[American], after consultation with By Light, to act as Responsible Manager to manage performance of the T4NG2 Contract. The Responsible Manager for the Contract shall be John M. Schleifer. He is responsible for performance of the Contract, overseeing the jobsite, and reporting to and implementing the instructions of the Managing Venturer. The resume of the Responsible Manager is attached hereto as Exhibit C. The Responsible Manager shall serve at the pleasure of the Managing Venturer and may be removed at any time, with or without cause. If the Responsible Manager is removed, the Managing Venturer may replace such Responsible Manager, provided that the replacement possesses the necessary qualifications required under the Contract, satisfies applicable SBA regulations, and is approved by the Client, if such approval is required.

*8 Section 4. Obligations of Responsible Manager. The Responsible Manager shall (i) allocate workshare upon receipt of a new task order under the T4NG2 Contract in accordance with Article III, Section 1; (ii) review and approve all invoices; (iii) routinely interface with Client personnel, including the Contracting Officer, the Contracting Officer's representatives, and other stakeholders, monitor contract performance; and (iv) approve all contract modifications after consultation with the Members.