This week, the U.S. Small Business Administration (SBA) published its long awaited final rule providing for a major expansion of its mentor-protégé program. These regulations, which represent monumental changes to the federal contracting landscape (for small and large businesses), will go into effect August 24, 2016. In the coming days and weeks we will publishing a number of posts breaking down the impact of these changes in greater detail.
Today, we begin by highlighting eleven of the most important changes coming next month as a result of these new regulations:
- SBA has created a second mentor-protégé program, which will be open to all small businesses, with benefits similar to those available under SBA’s existing 8(a) mentor-protégé program
SBA will be starting a second mentor-protégé program open to all small business, with benefits and requirements similar to those in SBA’s existing 8(a) Mentor-Protégé Program. Mentor-protégé joint ventures approved under the new small business program will be considered a small business for any procurement that the protégé, on its own, would be considered small. For example, an approved mentor-protégé joint venture under the small business program, with the protégé being a WOSB, will qualify as small for any small business set-aside or WOSB set-aside that the protégé would qualify for on its own, but would not qualify for 8(a) or SDVO or HUBZone set-asides. SBA will continue running the 8(a) mentor-protégé program separately (with some revisions), and SBA has tailored the 8(a) and small business mentor-protégé programs to be as similar as possible. An 8(a) firm will be eligible to submit a mentor-protégé application under either program.
- Protégés no longer have to be quite as small to qualify for SBA’s mentor-protégé programs
Previously, to be a protégé under the 8(a) mentor-protégé program, a firm had to be less than half the size of the size standard applicable to its primary NAICS code, or being in the developmental stage of the 8(a) program, or have never received an 8(a) contract. Under the new regulations, a firm will only need be smaller than the size standard of its primary NAICS code. This new rule will apply to both the 8(a) and small business mentor-protégé programs.
- Mentor-Protégé joint ventures will be tracked through SAM.gov
In order to facilitate the tracking of awards to mentor-protégé joint ventures, all mentor-protégé joint ventures in either SBA program will be required to register the joint venture as a separate entity in SAM.gov, with its own unique DUNS number and CAGE code. The firm’s SAM.gov registration must also be identify the firm as a joint venture, and must identify the members of the joint venture.
- There will be no open/closed enrollment periods (for now)
Because of the expansion of the mentor-protégé program to all small businesses, SBA anticipates an influx in applications to the program. As a result of this expected influx, SBA had considered utilizing open and closed enrollment periods. Instead, for now, SBA will accept applications to the new mentor-protégé program at any time. However, SBA has left open the possibility of switching to open/closed enrollment periods in the future if the need arises. To help facilitate the review and approval of applications, a separate unit will be created within SBA’s Office of Business Development whose sole function will be to process mentor-protégé applications. In addition, contrary to previous statements by SBA, the new program is not being launched merely on pilot basis.
- The end of “populated” mentor-protégé joint ventures
Until now, 8(a) mentor-protégé joint ventures could be “populated” (persons performing the contract work would be employed directly by the joint venture) or “unpopulated” (persons performing the contract would be employed by the partners to the joint venture). Because of the difficulties in tracking the benefits gained by the protégé in a populated joint venture, SBA will required all mentor-protégé’s in either of its program to be unpopulated (though they may still be populated with administrative personnel). Continue Reading