SBA OIG All Small Mentor-Protégé Program Evaluation Reveals Concerns and Suggests Improvements

In 2016, SBA established the All Small Mentor-Protégé Program, or ASMPP, enabling mentors of any size to provide business development assistance to small protégé businesses to enhance the protégé’s ability to compete for federal contracts. Since then, the ASMPP has served as a powerful tool for many businesses and, as of August 1, there were 885 active mentor-protégé agreements.

Recently, however, the SBA’s Office of the Inspector General released a report highlighting some opportunities to improve the program and recommending SBA take additional steps to ensure compliance with the program’s requirements.

We’ll highlight some of the main issues that the OIG identified and then discuss how the report may impact the program.

Report Highlights

First, the OIG determined that the ASMPP’s structure didn’t properly ensure that unqualified mentors weren’t receiving program benefits. According to the OIG, this failure stemmed from the application and annual report processes. While mentors are required to meet a number of conditions for participation in the program under 13 C.F.R. §125.9(b), the OIG noted that the current mentor-protégé agreement template and application and annual report questionnaires focus almost exclusively on protégés. As a result, the OIG concluded that “there is little assurance that unqualified mentors are not participating in the program and receiving program benefits, including small business set-aside and sole source contracts, for which they would not otherwise be eligible.”

To combat this problem, “SBA drafted a certification form for mentors to complete and submit during the application process” requiring mentors to promise compliance with the applicable regulations. While SBA already uploaded the mentor certification form to certify.SBA.gov, the form is not mandatory at this time, so OIG recommended “implementing mandatory use” of the form. If SBA heeds its OIG’s advice, new program applicants should be on the lookout for the additional requirement.

Second, the OIG found that the ASMPP did not effectively ensure small business protégés developed as intended or adequately measure benefits of the program overall. As a preliminary matter, the OIG determined that “program officials did not ensure quality and consistency in the application review processes.” Of the approved mentor-protégé agreements OIG reviewed, 75% of the relevant “case files did not contain sufficient documentation that mentors were qualified” and more than half “did not contain evidence of supervisory approval, a required final step in the application process.”

With respect to annual evaluations, the OIG found that ASMPP officials conducted less than 24% of the annual evaluations they were required to conduct during the OIG’s review period. To make matters worse, even the completed evaluations were deemed incomplete because program officials “did not document whether they reviewed the protégé’s business plan to assess whether the goals and objectives were aligned with the mentor-protégé agreement and annual evaluation report, as required[.]”

While SBA, to some extent, maintained “established application review and annual evaluation processes,” the OIG determined that SBA was unable to adhere to these processes primarily “because SBA did not prioritize staff resources, and its information technology (IT) system was not sufficiently developed to effectively implement its established processes.” With respect to IT, the report described the SBA Certify site as sometimes “unreliable” and found that “case files randomly disappeared.”

Staffing issues, however, are perhaps more problematic. Though the SBA officials who designed the program “indicated that the program would initially need 12 full-time employees to implement the program,” the overburdened ASMPP office has only ever “had five employees and a program director since its initiation.”

In light of these issues, the OIG recommended development and implementation of procedures to enhance quality and consistency of application review and annual evaluation and enhancing functionality of certify.SBA.gov, as well as prioritizing staff more effectively.

How will this Report impact contractors and the ASMPP Office?

As a response to the OIG’s findings, the Report indicates that SBA plans to take a number of steps to correct the program’s current flaws.

First, SBA “plans to issue a new Mentor-Protégé Agreement form” by July 1, 2020 to ensure mentors’ regulatory compliance. Be on the lookout for the new form if you are considering a Mentor-Protégé arrangement in that timeframe.

The remaining intended changes apply to the ASMPP office’s internal procedures. SBA also plans to update its standard operating procedure to “describe the steps used by program staff to document completion of the application and annual review processes” by July 1, 2020. The SBA generally posts its SOPs online, so be sure to check back for changes. Increased emphasis on annual reporting creates the potential for increased scrutiny of these reports and the assistance and development reflected in them.

Finally, SBA intends to enhance its internal processes to better “fulfill the functional requirements for the program” overall by December 2020. The catch? Unfortunately for the overworked ASMPP office, SBA Management does not intend to reallocate or add any additional staff positions to their numbers.

Stay tuned to the blog for information about updates to the ASMPP. If you have questions about this report or how it might impact you, you can also give us a call!