In the same vein, such joint ventures will qualify for a contract reserved or set-aside for specific programs, such as for Service-Disabled Veteran-Owned Small Businesses (SDVO SBs) or Women-Owned Small Businesses (WOSBs), if the protégé firm also meets the particular program-specific requirements. Moreover, a protégé may joint venture with its SBA-approved mentor and still qualify as a small business for any Federal government contract or subcontract, provided that the protégé qualifies as small for the size standard corresponding to the NAICS code assigned to the procurement. Absent this affiliation exemption, any of these types of assistance could lead to a finding of affiliation between two companies, which, in turn, could cause the small business to exceed the applicable size threshold. This assistance can vary, including: (1) technical and/or management assistance (2) financial assistance in the form of equity investments and/or loans (3) subcontracts (either from the mentor to the protégé or vice versa) (4) trade education and/or (5) assistance in performing prime contracts with the Government through joint venture arrangements. Under the program, a firm that has an SBA-approved MPA is not affiliated with its mentor firm solely because the protégé firm receives assistance from the mentor under the MPA. SBA’s mentor-protégé program is supposed to “allow all small businesses to tap into the expertise and capital of larger firms, which in turn should help small business concerns become more knowledgeable, stable, and competitive in the Federal procurement arena.” This program serves an important development function that should ultimately enable small businesses to independently perform larger and more complex contracts on their own. SBA’s Mentor-Protégé Program – The Basics A separate blog post will address the changes that the SBA is implementing in the final rule to the SBA’s current regulations governing the 8(a) business development (BD) program. Given the numerous benefits to participating in this program, including the opportunity to joint venture, the SBA has layered into this final rule the requirement for numerous express certifications of compliance and severe consequences for violation of the SBA’s regulations, MPAs, and/or joint venture agreements. Effective August 24, 2016, this new program is expected to unleash a flood of new mentor-protégé agreements (MPAs) as well as joint ventures eligible to compete on set-aside procurements, and it could likely result in an increase in the number of set-aside procurements.īelow we discuss the benefits from participating in this program, the requirements for the mentor-protégé agreement (“MPA”), the eligibility criteria for mentors and protégés, and the requirements for joint ventures established pursuant to the MPAs. This widely-anticipated rule, implementing provisions of the Small Business Jobs Act of 2010 and the National Defense Authorization Act for Fiscal Year 2013, provides increased opportunity for small and large businesses to partner with one another. Please contact our office if you need help with a mentor-protégé JV agreement.On July 25, 2016, the SBA published its final rule establishing a government-wide mentor-protégé program for the benefit of all small businesses as protégés. For VA procurements, the Joint Venture must be verified by CVE.The joint venture must also submit annual reports to the SBA and the contracting agencies explaining how the work is being performed for each contract and § 125.8(b)(2) and (c). Note that the joint venture must perform the appropriate percentage of work based on the subcontracting requirements the protégé must perform 40% of that. The joint venture agreement must meet the requirements at 13 C.F.R.The protégé must qualify as a small business under the size standard corresponding to the NAICS code assigned to the procurement. The mentor-protégé agreement must have been approved before proposal submission.There are three (3) requirements that must be met in order to for a mentor-protégé Joint Venture to compete on a small business set aside: The SBA has established an All-Small Mentor-Protégé Program. Businesses who have a mentor-protégé relationship can form a joint venture to compete together for government contracts set aside for businesses that are small, service-disabled veteran-owned, women-owned, or HUBZone businesses - as long as the protégé qualifies for the contract.
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