The SBA 8(a) mentor-protege joint venture exception from affiliation applies to non-8(a) contracts, so long as the joint venture meets the 8(a) regulatory requirements.
In a recent size appeal decision, the SBA Office of Hearings and Appeals held that the SBA Area Office erred by deeming a mentor and its protege affiliated for purposes of a non-8(a) contract, without considering whether the joint venture qualified for the mentor-protege exception to the ordinary SBA affiliation rules.
Can an SBA 8(a) program mentor and protege be affiliated, notwithstanding their 8(a) mentor-protege arrangement, if the firms engage in extensive employee sharing?
Maybe.
In a recent decision, the SBA Office of Hearings and Appeals suggested that extensive employee sharing between an 8(a) protege and its mentor might be outside the bounds of protected “assistance” under the 8(a) mentor-protege program. And in the same case, SBA OHA raised an interesting question: does a mentor-protege relationship protect the mentor from affiliation, as well as the protege?
Under the SBA affiliation rules, there is no broad exception from affiliation with a non-profit, according to a recent SBA Office of Hearings and Appeals decision.
In Size Appeal of Asklepion Pharmaceuticals, LLC, SBA No. SIZ-5410 (2012), SBA OHA held that the SBA Area Office properly found a company affiliated with several non-profits, causing the company to be ineligible as a small business.
The SBA Office of Hearings and Appeals has held that the SBA Area Office did not err by refusing to find affiliation between a tribally-owned company and its sister companies.
SBA OHA’s recent decision in Size Appeal of Bosco Contractors, Inc., SBA No. SIZ-5412 (2012), follows on the heels of Size Appeal of Roundhouse PBN, LLC, SBA No. SIZ-5383 (2012), in which SBA OHA found that the SBA had erred by adopting a too-narrow view of the tribal exception from affiliation.