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.
This bill was co-sponsored by Rep. Bobby Schilling (R-IL), Subcommittee on Contracting & Workforce Ranking Member and Rep. Judy Chu (D-CA).
Bill Jaffe is a co-founder and the Senior Vice President/General Manager for TAPE, LLC.