On November 24, 2014 the Small Business Administration (“SBA”) Office of Hearings and Appeals (“OHA”) found that a mentor-protégé joint venture agreement between Kisan Engineering Company P.C. (“Kisan”), a small 8(a) business, and The Pike Company Inc. (“Pike”), its large business mentor, caused the joint venture to lose its status as a small business. As a result, the joint venture was not qualified to receive a contract award on a procurement reserved for small businesses. OHA disqualified the mentor-protégé joint venture despite the fact that the SBA had approved the Kisan-Pike mentor-protégé agreement, through which Pike was to mentor Kisan.
This decision serves to remind small and large businesses engaging in mentor-protégé relationships that the approval of a mentor-protégé agreement by the SBA does not create a safety net for the mentor-protégé joint venture formed to submit qualifying small business bids and proposals. The joint venture agreement itself must meet the separate requirements of 13 C.F.R. §§124.513(c) and (d), with specificity.
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