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Expanding the SBA Mentor-Protégé Program

On July 25, 2016, the Small Business Administration (“SBA”) issued a much-anticipated final rule regarding the government-wide mentor-protégé program for small businesses. All small businesses, not only 8(a)s, will now be able to participate in the mentor-protégé program.

The changes will benefit both large and small businesses. Large businesses will now have a larger pool of small businesses to mentor, and additional disadvantaged companies now have the opportunity to participate. The rule specifically states that the mentor-protégé program will now have four new programs:

  • Small businesses;
  • Women-owned small businesses;
  • Service-disabled, veteran-owned small businesses; and
  • Historically Underutilized Businesses.

Other notable changes include:

  • Businesses that do not qualify as small under their primary North American Industry Classification System (“NAICS”) code may qualify as small under a secondary NAICS code, as long as the company has previously performed work under the secondary NAICS code.
  • The new rule eliminates the requirement that the mentor needs to be in good financial condition. The new rule simply states that the mentor must only be able to meet the obligations outlined in the mentor-protégé agreement.
  • Joint venture entities must be unpopulated or populated only with administrative personnel. They no longer have the option to be populated with contract employees.
  • Firms outside the 8(a) program are not required to report on joint venture awards. The new rule does require joint ventures under the mentor-protégé program to register in SAM, with separate DUNS and CAGE numbers, listing the joint venture partners.

Click here to read the final rule effective August 24, 2016.

For assistance with the mentor-protégé application and process, please contact your Cherry Bekaert GovCon professional.

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