SBA takes oversight of mentor-protege programs

Agencies’ mentor-protégé programs soon will fall under the Small Business Administration’s scrutiny and its coming regulations.

The fiscal 2013 National Defense Authorization Act, which became law Jan. 2, gives agencies 10 specific guidelines to help them prepare for the new regulations. The intent is to protect small firms and create a standard structure across civilian agencies.

The regulations will address:

•  Eligibility criteria for participants, such as the number of mentor-protégé relationship one company can have;
•  Types of assistance mentors can provide;
•  Whether any assistance may affect a small companies’ size status due to the affiliation;
•  Length of a mentor-protégé relationship;
•  Effects of the relationship on contracting;
•  Benefits a mentor may get from the relationship;
•  Reporting requirements while a company is in the program;
•  Reporting requirements after participation ends;
•  Acceptance of a mentor-protégé pair at all similar federal programs;
•  How to ensure protégés benefit and are protected against a mentor that affects a size status or that yield more economic benefits than the protégé.

Mentor-protégé programs pair small companies and experienced contractors, which provide technical and managerial development assistance. Currently, 13 agencies have mentor-protégé programs.

Based on the law, agencies will have to submit plans to SBA for approval, with an exclusion for the Defense Department.

“While it’s too soon to get into specifics, SBA looks forward to working with our stakeholders, including other federal agencies, over the coming months to write and implement new regulations for the mentor-protégé program,” an SBA spokesman said.

Studies have shown the various programs are duplicative, which lead to unnecessary paperwork, and they lack standard measures for success. Moreover, small firms risk losing their size status due to an affiliation with other companies, according to a report on the Building Better Business Partners Act (H.R. 3985). It is the basis for the NDAA language. The Government Accountability Office found similar issues in 2011 when it studied the programs.

“When the Government Accountability Office raised concerns last year about the effectiveness of mentor-protégé programs and questioned the accuracy of data in the Small Business Association’s Government Contracting Area Report, I knew something had to be done,” Rep. Judy Chu (D-Calif.), a co-sponsor of the bill, said in March.