SBA MENTOR PROTEGE CODE

Mentor-proteges in the SBA program should be rigorous in seeking and obtaining SBA approval for any extensions of their joint venture before they make an offer as a joint venture. The Office of Hearings and Appeals held that the Area Office was correct in determining that the joint venture was not an eligible small business for the instant procurement. Also, the joint venture agreement had lapsed and its extension had not been approved by the SBA as of the bid date, so the affiliation exclusion discussed above was not available. The Area Office of SBA found the joint venture “not small” because Magnus Pacific was not small under the size regulations. However, the SBA’s approval letter stated that the “agreement shall expire after one year, unless SBA approves an extension.” On July 15, 2015, before SBA approved an extension that had been requested, the two firms bid as a joint venture on an Army Corps of Engineers flood management program. entered into a mentor-protégé agreement, which the SBA approved on July 5, 2014. In North Star, two firms, North Star Construction and Engineering (an 8(a) participant) and Magnus Pacific Corp. The regulations, however, are clear that the SBA must approve the mentor-protégé agreement before the joint venture’s offer is submitted, to receive the above exclusion from affiliation. If the procurement is to be awarded through the 8(a) BD program, SBA must approve the joint venture pursuant to § 124.513.ġ3 CFR §121.103(h)(3)(iii).

SBA MENTOR PROTEGE CODE

Two firms approved by SBA to be a mentor and protégé under § 124.520 of these regulations may 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 and, for purposes of 8(a) sole source requirements, has not reached the dollar limit set forth in § 124.519 of these regulations. The resources of However, the SBA’s mentor-protégé program is unique in that the SBA rules make an exception for joint ventures formed by 8(a) mentor and protégé firms, as follows: When SBA calculates the size of a business to determine if it is a small business, it includes the annual receipts and the employees of all affiliates.

(Usually, joint ventures are examined only with respect to the particular procurement they bid on). Generally, when two firms form a joint venture to perform a contract, the two firms will be considered affiliates for purposes of that contract, even though one firm may be small and in the 8(a) program.

Because the agreement had lapsed, OHA held that the joint venture was “not small” and not eligible for the procurement. 17, 2016, the Small Business Administration (“SBA”) Office of Hearings and Appeals (“OHA”) considered a size protest of a joint venture consisting of a large business and a small business that, at one time, had an SBA mentor-protégé agreement. This change is effective as of December 27, 2016.In North Star Magnus Pacific Joint Venture, SBA No. Rather than receiving profits based on ownership interests, Service-Disabled Veteran-Owned, Women-Owned, and HUBZone small business program participating in joint ventures must now receive profits commensurate with the work they perform. To ensure that SBA’s intent is properly conveyed throughout the mentor-protégé regulations, joint venture profit requirements have been changed for the rest of the small business programs as well. To eliminate the anomaly, rather than requiring strict percentages, the rule now requires 8(a) Participant(s) in a joint venture to receive profits from the joint venture that is commensurate with the work performed. Under the original rule, the protégé could perform only 40% of the total work of the joint venture, but was required to receive at least 51% of the profit. Under the corrected version of the rule, the SBA has removed ambiguity in the profits allocated to a joint venture participating in the 8(a) program. On December 27, 2016, the SBA published technical modifications to the mentor-protégé regulations in addition to minor revisions previously issued in October 2016. And as with any new program, in an effort to eliminate confusion and provide clarity for the program’s participants, the SBA has issued corrections to the rule. Though effective as of August 24th, the SBA didn’t fully transition into the new system until November 2016. As previously reported, on July 22, 2016, the Small Business Administration (SBA) issued a final rule establishing a government-wide mentor-protégé program encompassing all small business concerns.

Sba mentor protege