![]() ![]() ![]() In its recently-published Final Rule, the SBA has confirmed that having two separate mentor-protégé programs is unnecessary and creates confusion in the small business community. § 125.9.Īs a result of the success of the ASMPP and because the ASMPP and the 8(a) mentor-protégé program have very similar benefits and purposes, the SBA is ending the 8(a) program and consolidating it into the ASMPP on November 16, 2020. The program has been very popular because it gives small businesses more capability to compete for larger and more sophisticated work while simultaneously giving mentors the opportunity to conduct up to 60 percent of the work on a federal government set-aside contract when that mentor may not otherwise qualify to do any of that small business work. As of the date of this publication, more than 1,200 active mentor-protégé agreements exist under the ASMPP. Since the creation of the ASMPP, Baker Donelson has helped multiple clients evaluate and create these relationships and also has given several presentations on the topic to various government contracting industry groups and to other lawyers. The creation of the ASMPP greatly expanded mentor-protégé opportunities and opened the flood gates of small businesses seeking mentor-protégé relationships. The affiliation exceptions under the mentor-protégé program are important because SBA's regulations require a small business to count its own annual receipts or employees 1, plus the annual receipts or employees of each affiliate, when determining its size status. Similar to the previously-created 8(a) mentor-protégé program, the ASMPP also provides an exception to affiliation for assistance that a protégé firm receives under the approved mentor-protégé agreement, and allows two firms with an SBA-approved mentor-protégé agreement to joint venture as a small business for any federal government prime contract or subcontract, provided the protégé qualifies as small for the size standard corresponding to the NAICS code assigned to the procurement. The All-Small Mentor-Protégé Program (ASMPP) expanded the SBA's mentor-protégé program from only 8(a) small businesses to all small businesses, including women-owned small businesses (WOSB), service-disabled veteran-owned small businesses (SDVOSB), Historically Under-Utilized Business Zone (HUBZone) small businesses, and any other qualifying small business. However, on July 25, 2016, the SBA published a Final Rule Creating the All-Small Mentor-Protégé Program, 81 FR 48558, which went into effect on October 1, 2016. Before October 1, 2016, the SBA's mentor-protégé program was available only to 8(a) small businesses. SBA's rules also confirmed that parties with an approved 8(a) mentor-protégé agreement would not be affiliated under SBA's affiliation rules solely based on the assistance that a protégé received from a mentor under the mentor-protégé agreement. A related significant benefit of the 8(a) mentor-protégé relationship was that the mentor and protégé could joint venture as a small business for any government prime contract or subcontract provided that the protégé qualified as small for the procurement and, for purposes of 8(a) sole source requirements, the protégé had not reached the dollar limits that an 8(a) participant may receive. The primary purpose of that program was to encourage SBA-approved experienced businesses (mentors) to aid in the development of SBA-approved 8(a) small businesses (protégés). SBA originally created a mentor-protégé program solely for 8(a) small businesses in 1998. Consolidation of SBA's Mentor-Protégé Programs We will publish additional alerts addressing other parts of the Final Rule in the near future. In this alert, we have summarized some of the most significant items related to the SBA's mentor-protégé programs and joint venture regulations. Large and small government contractors should review and be aware of these changes in this Final Rule. The Final Rule makes substantial changes to the SBA's Mentor-Protégé programs, revises SBA's existing affiliation rules, and makes various other technical corrections to better clarify the SBA's intentions for its size regulations. 66146) (the Final Rule), which goes into effect on November 16, 2020. On Octothe Small Business Administration (SBA) published its Final Rule related to Consolidation of Mentor-Protégé Programs and Other Government Contracting Amendments (85 Fed. ![]()
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