GAO Says: SBA’s Rules for Mentor-Protégé Joint Venture Experience Evaluations May Limit Solicitation Terms

Contractors will often enter into mentor protégé relationships and joint ventures to leverage the experience and skills of multiple parties for various reasons. SBA regulations dictate how the capabilities, past performance, and experience of a mentor-protégé joint venture will be evaluated. But at the end of the day, what matters is, whether agencies will follow those regulations in their small business set-aside solicitations and evaluations thereunder. A recent GAO case addressed this issue, providing further guidance on the interplay of solicitation terms for experience evaluations and SBA’s rules for evaluating mentor-protégé joint ventures’ experience.

SBA regulations dictate that when evaluating a joint venture’s experience, capabilities, and past performance, on a “contract set aside or reserved for small business,” the agency “must consider work done and qualifications held individually by each partner to the joint venture as well as any work done by the joint venture itself previously.” Additionally, an agency “may not require the protégé firm to individually meet the same evaluation or responsibility criteria as that required of other offerors generally.” The joint venture as a whole must “demonstrate the past performance, experience, business systems and certifications necessary to perform the contract.” Basically, if a mentor-protégé joint venture bids on a small business set-aside procurement, the agency must evaluate the members, as well as the joint venture as a whole. But, an agency can’t require the protégé member to meet the same requirements as other contractors.

GAO in Akima Data Management, LLC; Absolute Strategic Technologies, LLC, B-420644.7, B-420544.8 (Comp. Gen. 2024) looked at terms under the Polaris small business pool solicitation. This is quite the well known procurement around federal contracting. So, unsurprisingly, there is some bid protest history with this procurement. In fact, the disputes in Akima revolve around agency action taken after a Court of Federal Claims (“COFC”) case.

Prior to this case at GAO, the solicitation in Akima, was protested at the COFC for its terms related to submitted experience for a mentor and protégé, which stated: “a minimum of one Primary Relevant Experience Project or Emerging Technology Relevant Experience Project must be from the Protégé or the offering Mentor-Protégé Joint Venture,” and “[n]o more than three Primary Relevant Experience Projects may be provided by the Mentor.” The COFC found that these terms meant that the same evaluation criteria was was applied to all experience projects, regardless of whether the project is submitted by a protégé or not. As you recall, the SBA regulations state that the protégé will be separately evaluated from other offerors (or rather is not required to meet the same conditions as other offerors). Due to the COFC decision, the terms were updated. However, these updates were also protested, this time at GAO, bringing us to this current case, Akima.

These terms protested at GAO still required a “minimum of one Relevant Experience Project” from the protégé or the mentor-protégé joint venture. However, the terms were also updated in response to COFC’s orders, to state this requirement could be met by “submitting ‘a Primary Relevant Experience Project’; ‘an Emergency Technology Relevant Experience Project’; or–new and specific to MJPVs–‘a Protégé Capabilities Relevant Experience Project'” to be evaluated on a pass/fail basis rather than on a scoring table that other offerors used. In connection with this change, effected offerors could revise portions of their proposal, including removing or replacing the projects impacted by the term change submitted by a protégé or by a mentor-protégé joint venture. If an effected proposal didn’t have one of these project experiences from a protégé or mentor-protégé joint venture, then offerors must submit a protégé capability experience project from the protégé or the mentor-protégé joint venture.

Akima protested this update, stating that the solicitation should allow all offerors to update or substitute projects for experience. Absolute (the other protester), among other arguments, argued that the updated terms violated SBA regulations because it “unreasonably limits protégés from taking advantage of the experience of their MPJVs and precludes members of MPJVs from demonstrating past performance and experience to perform the contract ‘in the aggregate.'”

GAO held that only mentor-protégé joint ventures were required to submit projects for protégés or mentor-protégé joint ventures, and the updates limit revisions to projects from the protégé or mentor-protégé joint venture. GAO also held that the updated terms do not violate SBA regulations because the regulations simply require agencies to “consider the work and qualifications of the individual members of the MPJV as well as the MPJV, itself, and provides that ‘partners to the joint venture in the aggregate must demonstrate the past performance, experience, business systems and certifications necessary to perform the contract.'” GAO interpreted the updated terms as providing mentor-protégé joint ventures with flexibility, through the ability to “replace any experience project from the protégé or the MPJV with one from the mentor or a subcontractor–while still providing details about the protégé’s capabilities.” Thus the terms meet the requirement to evaluate a mentor-protégé joint venture “based on the abilities of the joint venture and its members” as a whole.

This case provides some great insight on: 1) the type of evaluation terms that GAO and other reviewers will see as acceptable related to mentor-protégé joint ventures; and 2) the advantages placed on mentor-protégé joint venture experience evaluations. Contractors bidding on a procurement through a mentor-protégé joint venture need to be on the look out for experience evaluation terms. If the solicitation’s terms place requirements on protégés that are the same as other offerors, or don’t consider the mentor-protégé team as a whole, then it may be seen as violating SBA rules. Additionally, mentor-protégé joint ventures (and really all contractors) should be careful to examine the effects of any corrective action or amendment to a solicitation, to ensure it meets regulatory expectations. Finally, this case serves as a great reminder to all contractors who are interested in, or are involved in the SBA’s mentor-protégé program, that the SBA’s regulations can provide significant experience advantages to joint ventures formed under SBA’s Mentor Protégé Program (such as permitting protégés to be held to different experience standards than other offerors).

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