SBA Proposes Merging 8(a) and All Small Mentor-Protégé Programs

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The Small Business Administration (SBA) recently issued a proposed rule “to merge the 8(a) Business (BD) Mentor-Protégé Program and the All Small Mentor-Protégé Program to eliminate confusion and remove unnecessary duplication of functions within SBA.”

What are the purposes of the programs?

The mentor-protégé program currently available to companies participating in the 8(a) BD Program – a business assistance program for small disadvantaged businesses – is “used as a business development tool in which mentors provide diverse types of business assistance to eligible 8(a) BD protégés.” The “explicit purpose” of the 8(a) BD mentor-protégé relationship is to “enhance the capabilities of protégés and to improve their ability to successfully compete for both government and commercial contracts.”

Similarly, the All Small Mentor-Protégé Program, which applies to all small businesses – including 8(a) Program participants, Historically Underutilized Business Zone (HUBZone) small businesses, veteran-owned and service-disabled veteran-owned small businesses (VOSB/SDVOSBs), woman-owned and economically disadvantaged woman-owned small businesses (WOSBs/EDWOSBs) – is designed to “require approved mentors to aid protégé firms so that they may enhance their capabilities, meet their business goals, and improve their ability to compete for contracts.”

As such, the purposes of the two programs are identical.

What are the benefits of the programs?

Additionally, the benefits available under both programs are identical. Small businesses and 8(a) Program participants receive “valuable business development assistance and any joint venture formed between a protégé firm and its SBA-approved mentor receives an exclusion from affiliation, such that the joint venture will qualify as a small business provided the protégé individually qualifies as small under the size standard corresponding to the NAICS code assigned to the procurement.”

A protégé company may enter a joint venture with its SBA-approved mentor and be eligible for any contract opportunity for which the protégé qualifies. If a protégé company is an 8(a) Program participant, a joint venture between the protégé and its mentor “could seek any 8(a) contract, regardless of whether the mentor-protégé agreement was approved through the 8(a) BD Mentor-Protégé Program or the All Small Mentor-Protégé Program.”

Further, a company could be certified as an 8(a) Program participant after its mentor-protégé relationship has been approved by the SBA under the All Small Mentor-Protégé Program and be eligible for 8(a) contracts as a joint venture with its mentor once certified.

What is the SBA proposing?

Because the benefits and purposes of the two programs are identical, the SBA “believes that having two separate mentor-protégé programs is unnecessary and causes needless confusion in the small business community.” Accordingly, this proposed rule would eliminate a separate 8(a) BD Mentor-Protégé Program and continue to allow any 8(a) participant to enter a mentor-protégé relationship through the All Small Mentor-Protégé Program. More specifically, the proposed rule would “revise [13 CFR] § 124.520 to merely recognize that an 8(a) Participant, as any other small business, may participate in SBA’s Small Business Mentor-Protégé Program.”

In merging the two programs, the proposed rule would also make “conforming amendments” to the SBA’s size regulations (13 CFR part 121), the joint venture provisions (13 CFR 125.8), and the All Small Mentor-Protégé Program regulations (13 CFR 125.9).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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