SBA had a well-established mentor-protégé program (MPP) for SBA 8(a) certified firms but lacked an MPP program for other small business concerns and specifically, one for specialized certified concerns such as WOSB, EDWOSB, SDVOSB, & HubZone. The 2010 Jobs Act and 2013 NDAA gave SBA the authorization to address this by establishing an all-encompassing mentor-protégé program.
Ms. Sandi Clifford, deputy director of the All Small Mentor-Protégé Program (ASMPP), visited the Mid-Tier Advocacy (MTA) earlier this year to discuss the program.
Here are some of the highlights of this candid and informative discussion:
As Ms. Clifford explained, mentor services to protégés include:
- Management and technical assistance (internal business management systems)
- Financial assistance (in the form of equity investments and/or loans)
- Contracting assistance (contracting processes, capabilities acquisitions and performance)
- International trade education (learn how to export, international trade business plan, finding markets)
- Business development assistance (strategy, finding contracting and partnership opportunities)
- General and/or administrative assistance (business processes and support)
As administrators of the program, SBA provides:
- Central HQ as opposed to 8(a) distributive model
- Online application – certify.SBA.gov
- Online course tutorial requirement
- Annual review and evaluation
- Template agreements, i.e., MPA (Mentor-Protégé Agreement)
Other All-Small Mentor-Protégé Program (ASMPP) details:
- A protégé may generally only have one mentor at a time; SBA may approve a second (two is the maximum) where no competition exists, or if the protégé registers under a new NAICS or otherwise requires new mentor skills.
- Both protégé and mentor must be for-profit (with exception of protégé being an agriculture cooperative).
- A mentor may have no more than three protégés at same time (no lifetime limit).
- A participant can be both a protégé and mentor at the same time, if there is no competition or conflict.
- The ASMPP is self-certifying and is open to businesses who qualify as small in their primary NAICS code, or who are seeking business development assistance in a secondary NAICs where they also qualify as small.
- SBA will not authorize MPAs in second NAICS in which firm has never performed any work; or where firm would only bring “small” status to Mentor and nothing else.
- Existing 8(a) firms in last 6 months of the 8(a) program may transfer their MPA to the ASMPP via the online application process. Coordinate with 8(a) office to fine tune the process but there is no reapplication required.
- Application requirements include upload of business plan, but no financial statements or tax returns.
- JV agreements: ASMPP will not review and approve joint venture agreements.
How to apply for the ASMPP:
- Applicants are required to register in the System for Award Management (SAM) prior to submitting their mentor/protégé application.
- Complete your business profile in certify.SBA.gov.
- Evaluate and select your mentor prior to applying. This is not a matching program. SBA will not find a mentor for you.
- Begin the ASMPP application process.
- Protégés and mentors must complete the online tutorial and have their certificate of completion and all other required documents ready for upload
Thank you to Sandi Clifford, Deputy Director, All Small Mentor-Protégé Program, for this helpful overview. TAPE has mentored several small businesses over it’s life as a large business (we’re large in some NAICS codes, though still small in others) and it has been gratifying, satisfying, and integral to our success. As protégés ourselves, we have benefitted from working with some really classy large businesses, and have also had the experience of being a protégé and really getting no tangible benefits. We are currently working with two small businesses, and negotiating ASMPP agreements.
There are three dimensions on which you measure a successful project, which are whether the project was finished on time, on budget and within spec. On time refers to whether you met your delivery schedule, on budget refers to whether you stayed within your defined dollar amounts and within spec refers to whether you met the requirements of the job, which will be defined differently for every project.
Traditionally, people have said that the best you can do is meet two out of three. If you hold to the budget and deliver the requirements, they say, there tends to be a problem with the schedule. Or vice versa.
I say that’s a myth. You CAN deliver on all three dimensions, keep your customers happy and grow a successful business. As long as you’re clear about what you can do.
In the bidding process, the important thing for us as contractors to understand is our customers’ expectations. Are they more sensitive to price? Point out that in order to keep their costs down they may need to revise their requirements.
In these times, we can only assume that the government will choose based on price, even if we’d rather they choose based on the quality of our work or our suitability for the job. And quite frankly, that means we may not win the contract.
The worst thing you’ll want to do is under-bid to please a price-sensitive customer, and then force yourself to sacrifice quality, speed or performance in order to do the job at that rate.
It is your responsibility to educate your customer on the trade-offs of choosing the lowest price option. It doesn’t means they have to sacrifice quality or speed, but you may need to lower their expectations so they’re more realistic.
I want my customer to know and understand why he’s choosing me. If he’s choosing me because he knows I’m going to deliver the right quality for the low price he has to spend, I can convince him that I’m the right person to hire. Sometimes, I may even convince him that he wants/needs a big requirement at a high quality, as long as he also understands that will cost a higher price and/or take longer.
If you were bidding to mow a the lawn of the White House, for example, coming in cheapest won’t really help if all you’ve got is a push mower. Not only will the same job take you much longer to complete than someone with a riding mower (mowing the North and South lawns alone takes eight hours, according to the Huffington Post), the quality won’t compare. And you can bet that quality is the most important dimension of success for this job; that lawn has to look perfect. And that might not be the cheapest or fastest option.
In order to succeed amongst your competition, you need to understand what’s important to your customers and frame your offer to meet their most pressing needs.
Today I would like to introduce you to the Minority Business Development Agency (MBDA), an arm of the Commerce department that has created $4 billion in business with a $29 million budget. Impressive!
Similar to the Small Business Administration and PTAC, the MBDA is dedicated to helping small businesses, with a specific focus on minority business development. In fact, they’re the only federal agency seeking to create wealth in minority communities.
MBDA funds a network of centers across the nation where minority business owners can access free business referrals, as well as specialized training for a nominal fee. They also have an active blog and website featuring helpful articles and the latest opportunities for small business owners, such as next week’s free National Small Business Forums.
Whether you’re looking for opportunities for your minority-owned business or general small business advice, the Minority Business Development Agency will be a very valuable resource for you. Check them out at http://www.mbda.gov/.
Currently, some but not all federal agencies have mentor-protégé programs. When you’re procuring a contract with one of these agencies, being in a mentor-protégé relationship has several benefits and functions. Often the agency will give more credit to a mentor-protégé team than to a regular team, because there’s an established relationship and they know everyone is committed to sharing with each other in an appropriate fashion.
Here are three important aspects of the mentor-protégé process:
1) The mentor-protégé programs are unique to each agency, and therefore not portable. You can’t claim the benefits or use the benefits in an agency that didn’t sponsor you.
For example, TAPE, LLC has a mentor-protégé relationship with a small service-disabled 8(a) business called JAB Innovative Solutions. Our relationship was established through the GSA, and so doesn’t apply to any other agency. So if JAB and TAPE were to bid on, let’s say, an opportunity at HHS (Health and Human Services), we wouldn’t get credit for our mentor-protégé relationship
2) Only the Department of Defense reimburses mentors for training activities. The larger business, as the mentor, can define the training or other help they’re going to give to the smaller business, and they will get reimbursed for this just as if it were a contract with a customer. It is a very good thing that the government will pay for these benefits to the small business. However, none of the other agency mentor-protégé programs have money attached to them.
3) A joint venture between a mentor (large business) and a protégé (small business) takes on the designation of the small business, e.g., 8(a). A joint venture is an actual corporation registered in the CCR, but it’s owned by multiple parties. Ordinarily, joint ventures that include a large business take on the designation of the large business, and therefore would not be entitled to any of the money or opportunities set aside for small business. (We’ll speak further about the pros and cons of joint venture agreements in another post.)
If H.R.3985: Building Better Business Partnerships Act of 2012 is passed, a working committee under the SBA’s ownership would seek to establish how mentor-protégé agreements work, and to ensure portability of these agreements between agencies.
Bill Jaffe is a co-founder and the Senior Vice President/General Manager for TAPE, LLC.
Finding work with the federal government takes some pretty fancy footwork. First you need to make sure you’re talking to the right person, and then you need to show how you’re right for the contract.
Before you get too far with a pitch, make sure you’re pitching to the right person. Ask qualifying questions that will determine if this is the person in the agency who has both the money (decision-making power) and the requirement for the specific services you provide.
Just like our team at TAPE did after our dance party, you’ll probably go from person-to-person, from chance encounters to meetings at high levels, down to meetings at mid-levels. In every meeting, it’s up to you to always be asking, “Where’s the beef? Does this person have money and a requirement that we can satisfy?”
Doing your footwork also means taking care of all the little things that make it easier to do business with you. After our own chance encounter led to a meeting with a high-level decision maker, the very first question he asked us was, “Are you registered in our small business database, and are you certified by this agency?” Hearing yes to those questions meant he could do business with us without having to jump through any hoops.
As a side note, registering in the small business database of a specific agency is a different process from registering your business with the federal government. You can usually do this online via the agency’s website, or through their OSDBU.
Another major dimension of successful prospecting is how well you know your customer. And I don’t mean whether you’ve been introduced. It’s about knowing why the customer would be amenable to you doing the work as opposed to someone else. And making sure the customer understands these issues as well. Which of their unique needs are you perfectly set up to address?
What’s the solution to their problem, and do you have that solution as a capability? It could be as simple as a customer who needs their grass cut and you have a lawnmower. Keep in mind, you still may lose the contract to someone with a riding mower. So if all you’ve got is a push mower, you’d better be looking for a customer with a small enough property that doesn’t need a riding mower – because someone with a riding mower can get it done faster and cheaper.
Once you know you can meet the customer’s needs, get on the phone! Statistics show that 12 calls are needed to make the average sale, and that the average company only makes three of those. So stick to it!
I’ve already talked about making sure the agency actually has the money to follow through, and it’s worth repeating. Sure, they may have the desire to complete a project, but with the tight budgets everyone is facing, they may not have the money. And that will definitely hinder your success.
Keep in mind that even if you’ve done all of this fancy footwork, you can’t stop now. There are other people who want the work – never assume you are the only one who knows about an opportunity. If a customer is willing to talk to you, they’re willing to talk to anyone. And under federal acquisition regulations, they have to give the same information to everyone who asks. You need to keep demonstrating that you understand this agency’s requirements, and why your business is the best one to meet these needs.
We’ll talk more in future blog posts about how to find customers. In the meantime, keep up that fancy footwork!
Large businesses want to earn money just as much as small businesses do. And they know that in order to win federal government contracts, their proposal must show how they plan to award 23% (or more) of those contracts to small business partners who will act as sub-contractors. Unfortunately, large businesses don’t always follow through with actually delivering the work to small business sub-contractors. The STAR Act attempts to fix that problem.
The first piece is that when a large business hides behind a small business simply to win a contract, right now it is difficult to track down whether the small business is really doing the work. This bill will make that easier.
Next, this bill allows multiple small businesses to share work as a team, something which has been difficult up until now. For agencies and contracting officers, a group of small businesses had always seemed more risky, and these types of joint ventures would often be passed over.
This bill gives joint ventures that are made up of multiple small businesses more control and a better standing with the FAR (Federal Acquisition Regulation), and allows them to be considered equivalent to a larger business. Instead of seeing 2 x $25 million businesses who have teamed together, for example, government evaluators will see the group as one $50 million business – because one person is in control.
The last part of this bill deals with insourcing. In previous administrations, increasing amounts of work were being outsourced to contractors like you and I. The Obama administration sought to reverse that trend by defining more tasks that must be done by government employees and not by contractors.
For large businesses, this wasn’t really a problem – if their government contract got insourced, they would just move their people around to other jobs. They always have multiple opportunities and contracts on the go. But for small businesses, government insourcing meant significant loss of revenue.
The STAR act creates transparency by requiring agencies to publish their insourcing processes and allowing small business contractors to challenge those decisions in a protest action.
This bill was sponsored by Subcommittee on Contracting and Workforce Chairman Rep. Mick Mulvaney (R-SC).
The government buys a lot of stuff. Take paper clips, for example. It takes a lot of paper clips to manage a country of this size. So rather than go through a competition of every retailer who provides paper clips, the government created the GSA (General Services Administration) to manage the acquisition of their resources.
This way, retailers (paper clip and otherwise) don’t have to re-compete every time. Instead, GSA issues contracts, called GSA Schedules, also known as Multiple Award Schedules or MAS, so that government agencies can have assured price competition for commodity items, for example, office supplies.
So instead of shopping out of the Staples or Office Depot catalog, or maybe a local company in their town, each government agency can order their supplies right off the GSA Schedule and feel confident that a maximum discount was already negotiated by GSA.
Of course it’s not just about office supplies. There is a GSA schedule for IT, one for engineering labor, another for management consulting, etc. What if you want a mug that says, “Department of Homeland Security”? Or you want to get your carpets cleaned? What about advertising, or training? There are GSA Schedules that deal with all of these, along with professional services like accountants and lawyers.
If a government contracting office is placing a large order (a specific amount that varies based on the product or service), every contractor who holds a GSA Schedule will be notified so they can send in a proposal.
The GSA Schedule is a vehicle that allows you to do business with the government in your chosen field. Once you find the appropriate GSA Schedule and define your pricing schedule, then whenever the government needs your service they’ll send out a request for proposal and you can respond.
You won’t be the only one, though. You can be sure that other companies are also responding. It doesn’t mean you can’t beat them and get the work, but keep in mind that you’ll have a much better chance when you already have an existing relationship with the customer.
GSA Schedules are ideal because you don’t need to compete to win the schedule; you simply pass through an application process (assuming you’ve already registered your business) and as long as you meet the requirements, you’re in! The GSA is not going to reject you because your prices are higher, or even because the quality of your work is lower. The GSA won’t reject you for those things, but prospective customers may!
Holding a GSA Schedule is the only way to get one contract that’s immediately applicable across the country. This could be a huge benefit to you in your business.
Bill H.R. 3850 – Government Efficiency through Small Business Contracting Act of 2012 has some very promising outcomes for small business who work with the federal government.
The first provision would raise the small business contracting goal from 23% to 25%. While 2% doesn’t sound like a lot, it translates into prime contract revenue adjustments of $10 or $11 billion.
The second provision applies to small businesses who work as subcontractors to larger businesses or larger projects. In these larger contracts, the goal would raise from 35.9% to 40%. That translates to $25 or $50 billion dollars of business that would be mandated to small business.
The third provision relates to the bonuses awarded to the 13 top agencies with cabinet-level functions as well as 15-18 independent agencies. As you know, if you want to make someone do something, hit them in the pocketbook. In this case, no bonuses will be awarded if small business goals aren’t met. This makes it clear that the top agency-level officials are as equally responsible for small business success as they are for running the operations of their particular agency.
Bonuses are now awarded based on the agency’s PAR – Performance Accountability Report – a scorecard system initiated by Al Gore. Making the small business community part of each agency’s goals puts real teeth into small business contracting; if small business success becomes part of their portfolio, subcontracting to small business becomes much more important to top-level officials – a very good thing for the small business community.
This bill was sponsored by Small Business Committee Chairman Rep. Sam Graves (R-MO).
To find new customers, you need to be where they are. So where are your government customers hanging out? Where do they go when they want to network with non-government industry people?
The Chamber of Commerce seems like an obvious place to start. Even though government people don’t usually attend Chamber meetings, you can speak to your local Chamber office to get the whole story. There may be sub-groups geared towards government contractors, and they can also tell you which events your local government representatives might be attending.
Your best bet is to look for the organizations that actually specialize in bringing together government people and the vendors who serve them. If you’re in communications, security or technology, for example, you could join TAPE as members in the Armed Forces Communications and Electronics Association (AFCEA), a global organization with branches and meetings all over the world. Or look for a Technology Council near you.
Two examples of more localized groups are the Charleston Defense Contractors Association in South Carolina near the SPAWAR Naval base. Another excellent resource will be your local community’s Department of Economic and Community Development, such as the St. Mary’s County Association, which meets in South Maryland near the Patuxent River Naval Base. Their meetings attract government people, vendors and contractors alike.
In all these cases, big city or small, there are organizations that bring together the Federal contractors and that gets everyone networking. These are the kinds of meetings and events you want to look for and get involved in. Think it might be too boring? Show up anyway! You never know who will be seated next to you, and where a casual conversation (or even a dance) may take you. That person may not be a source of revenue today, but they may be your biggest source of revenue tomorrow.
There are plenty of online networks as well. On LinkedIn, I’m connected to groups that bring together government representatives and vendors in particular industries, such as Defense & Aerospace and the Federal IT Group. Look for similar groups in your own industries and geographic location.
Whether it’s a live meeting or an online group, show up regularly and get involved. That’s how you’ll build the long-term relationships that keep you in the loop when opportunities come along.
P.S. There’s a really easy way to find these groups, and that’s to start with your local PTAC office – they’re even on LinkedIn! They often have a list of just the type of organizations you’re looking for.
Tonya Speed of the Mid-Tier Advocacy recently forwarded “Federal Contracting and Subcontracting with Small Businesses: Issues in the 112th Congress,” a useful report prepared by the Congressional Research Service. She writes:
This report describes and evaluates certain measures proposed or enacted by the 112th Congress to promote government contracting with small businesses. The report also discusses changes to existing laws that may be required when these provisions are implemented as well as certain potential legal and/or constitutional issues.
The key topics addressed in this report include:
- Size standards, including new standards for early stage small businesses and mid-sized firms;
- Increase to government-wide and agency-specific goals for small business contracting and incentives to meet the goals;
- Set-aside eligibility, especially with respect to Alaskan Native Corporations. There is some concern expressed that if goals became mandatory, then they could be construed as quotas which could unfairly benefit one class of small businesses over others.
- Limitations on the amount of work that can be subcontracted under SBA programs
- Bundling and consolidation of requirements into contracts that would be inappropriate for small businesses to bid on;
- Expedited payments to small businesses;
- Agency insourcing practices;
- Responsibilities of Agency OSBDU’s and SBA Procurement Center Representatives;
- Mentor-Protegee programs;
- Waste, fraud and abuse within small business programs–detection and penalties;
- Subcontracting plans within prime contracts–reporting requirements and financial penalties for failure to meet commitments.
You can click here to view the report as posted on the Women Construction Owners & Executives website.