One of the biggest gamechangers among Federal Contracting programs is the SBA’s Mentor Protégé Program. It provides an avenue for small businesses and large businesses to work together where they otherwise may not have been able to previously, helps federal contractors develop their companies, and can provide protection from affiliation. However, in order for businesses to take advantage of this program, the relationship between the mentor and protégé businesses must meet certain requirements. This entry in SmallGovCon’s Back to Basics series will provide a quick overview of some of the requirements and important areas for contractors to remember if they are considering participating in the SBA’s Mentor-Protégé Program.
Before we dive into some of the points of the SBA’s Mentor-Protégé Program, we presume you are like us and really enjoy learning about the SBA’ Mentor-Protégé Program. Well, if you are reading this prior to August 30, 2022, you are in luck because SmallGovCon’s own Shane McCall and Nicole Pottroff will be hosting a webinar on August 30, 2022, discussing in detail various updates to the SBA’s Mentor-Protégé Program. Registration for their webinar through Govology can be found here. Now lets dive in to some of the points of the SBA’s Mentor-Protégé Program.
What is the SBA’s Mentor-Protégé Program?
The Mentor-Protégé Program through the SBA is a program in which an “other-than-small” (read “large”) business can provide a small business access to its resources, experience and assistance, and in turn the large business can join with the small business to perform small business set-aside contracts. While it is typical that a large business is the mentor, that’s not a requirement–a small business can serve as a mentor.
There are a couple things contractors should keep in mind when diving into the SBA’s Mentor-Protégé Program regulations and guidance:
First, in the past there was an 8(a) Mentor-Protégé Program run by the SBA, as well as an All Small Mentor-Protégé Program through the SBA. These two were consolidated into the singular SBA Mentor-Protégé Program in 2020.
Second, agencies may have their own mentor-protégé programs, such as the long-running Department of Defense Mentor-Protégé Program. These are not the same as the SBA’s Mentor-Protégé Program and have their own unique requirements. We will only be looking at the widely used SBA Mentor-Protégé Program in this Back to Basics.
How do businesses qualify and gain entry into the SBA’s Mentor-Protégé Program?
First things first, the protégé must be a for-profit small business with some experience in their relevant industry, but hoping to grow its abilities with the assistance of another business. Next, the protégé needs to find a mentor. The SBA makes it very clear that they are not a matchmaking operation. So, the protégé needs to find a mentor on their own.
To qualify as a mentor, a business must be for-profit, be able to provide assistance to a mentor, possess “good character”, not be debarred or suspended, and be able to impart wisdom to the protégé from their experience in contracting.
Additionally, the mentor and protégé cannot be affiliated under SBA’s size affiliation rules found here.
Once a protégé finds its mentor, it must show that the relationship will not be used simply as a “pass through” for the mentor to perform small business contracts without any assistance to the small business. This is shown by crafting a robust Mentor-Protégé Agreement that lays out the responsibilities of the mentor and protégé, including what assistance the mentor will provide, and other items that discuss how the parties will interact to achieve the aims of their relationship
Once drafted, the Mentor-Protégé Agreement is submitted to the SBA at certify.sba.gov along with any other required documentation such as SBA training certificates, registrations etc. The SBA will then review the agreement, and the parties themselves, eventually either denying or approving of the agreement. Once approved, a mentor and protégé can start conducting the anticipated assistance and avail themselves of the benefits of the program.
What are the Benefits of the SBA’s Mentor-Protégé Program?
As alluded to earlier, there are some great benefits to participating in the SBA’s Mentor-Protégé Program. Through an established and approved Mentor Protégé Relationship, a Protégé can gain business development assistance from a Large Business Mentor in the following areas:
- Internal Business Processes, such as accounting, and marketing
- Financial Assistance
- Navigating Federal Contracts and the Contracting Process
- International Trade
- Business Development related to Government Contracting, such as building processes to identify contracting opportunities
- General and Administrative Assistance, such as helping develop business oversight processes or human resource departments
The activities undertaken by the mentor and protégé for the specific areas of assistance they identify in their approved mentor-protégé agreement are generally protected from leading to affiliation for size purposes. This allows the protégé to take full advantage of any assistance from a mentor, without fear of affiliation causing the protégé to take on the mentor’s size status.
However, the benefits are not solely limited to the protégé. In return for all the assistance and education given to the protégé, the mentor has the ability to utilize the mentor-protégé relationship to help the protégé work on contracts that would be restricted to small businesses, or set-aside for SBA socioeconomic programs (such as 8(a), HUBZone etc.). This avenue is available if the mentor and protégé enter into a joint venture, and then use that joint venture to bid and perform on set-aside contracts that the protégé qualifies for.
What are some important things to remember for the SBA’s Mentor-Protégé Agreements?
- An approved mentor-protégé relationship cannot last more than 6 years.
- There are restrictions on how many mentor-protégé relationships businesses may be in at the same time. And a protégé can generally only have two mentors total throughout the company’s lifetime.
- A mentor-protégé relationship is annually evaluated by the SBA for effectiveness, and there are many reporting standards that must be followed so that the SBA can keep track of the relationship.
As you can tell, the SBA’s Mentor-Protégé Program has quite a few regulatory hurdles to overcome, and this Back to Basics only hits on the most general points of the program. However, if contractors can find a business to run the mentor-protégé race together with and reach the finish line of getting an approved mentor-protégé agreement, then they can avail themselves of some great benefits. If you are considering a mentor-protégé relationship and have some questions, please feel free to reach out to us.
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