The SBA has long had a lifetime limit of two mentors for each protégé–and this limit was enforced very strictly. Say the mentor ghosted the protégé, or the two just never did any contracts together. Well, too bad, that still used up one of the two lifetime mentors that a protégé could have.
They say there are no second chances, but the SBA’s new rulewill allow for second chances on a mentor protégé arrangement in some circumstances, which should benefit protégés going forward.
The SBA’s recent final rule on Mentor-Protégé Program consolidation included a number of important updates and clarifications. Among these was an explanation of the rules involving a mentor owning part of a protégé while also being part of a joint venture with the same protégé. It’s something I’ve always wanted SBA to confirm, so I’m glad they did.
As we discussed, in late 2019 the SBA issued a proposed rule that would make a number of significant changes to the Mentor/Protégé programs and other small business contracting rules. Well, the SBA will soon issue its final rule on these changes, so make sure you are aware of the new rules.
Joint ventures and small business subcontracting are two issues near and dear to the hearts of many small business federal contractors. Well, the Federal Acquisition Regulation will soon be updated with respect to both of these topics. The new rules will align with SBA’s rules and remove any inconsistencies. Let’s dive in!
With little fanfare, the SBA has updated the template for agreements under the All Small Mentor-Protégé Program (ASMPP). The new template adds a series of check box-style questions, mainly about potential affiliation between the mentor and protege.
Be sure to check out the new template if you are working on a mentor-protégé agreement.
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.
The SBA’s All Small Mentor-Protégé program offers a tremendous opportunity for participants to pursue set-aside contracts as joint venture partners. But misunderstandings and misconceptions about how SBA mentor-protégé joint ventures work are pervasive.
One very common misconception is that the SBA must pre-approve a mentor-protégé joint venture. In most cases, that’s not so. In a recent bid protest decision, even the GAO appeared a little confused, repeatedly mentioning SBA approval of a joint venture even though no such approval was required for the contract in question.