Pros, cons of mentor-protege changes for vendors: analysts
The Small Business Administration’s recent massive proposed rule to merge its mentor-protege programs and make dozens of other changes has attracted--not surprisingly--a large number of comments.
To date, 178 comments with a mix of positive and negative reviews have been submitted.
Many who commented offered support for various provisions, while others raised objections to measures they believe could cause harm to small business federal contractors.
In the Nov. 8 proposed rule, the SBA said it wants to merge the 8(a) Business Development Mentor-Protégé Program and the All Small Mentor-Protégé Program. The agency also outlined more than 90 changes it intends to make to 8(a), joint venture, size standards and other rules.
Several analysts noted that the rule, as written, raises a number of questions.The American Bar Association’s Public Contract Law Section asked if the transfer of 8(a) to All Small will be automatic, what the process would be for amending the existing agreements and whether the transfers would affect the duration of the existing agreements, and others.
Other analysts questioned the SBA’s changes on specific issues, such as with the cap on mentor size, recertifications and joint venture partner. For example:
- $100 million cap on mentor size: The ABA attorneys strongly objected to SBA’s plan to allow only mentors with average annual revenues less than $100 million, asserting that the change is likely to harm, rather than help, small business proteges.
“The beneficiaries from such a cap
would not be small proteges, but instead would be mid-large mentors who would no longer have to compete against joint ventures with $100+ million large-firm mentors in the program,” the ABA lawyers wrote.
- Size/status recertification on MACs: SBA’s proposal to order recertification of size for orders set aside under unrestricted Multiple-Award Contracts (MACs) would be damaging to small vendors, according to PilieroMazza PLLC’s comment statement.
Currently, small businesses need to certify their size status at the time of initial offer for a MAC and is considered small throughout the life of the MAC unless a contracting officer specifically request a size review. Under the proposed rule, every task order set-aside on a MAC would require a size and/or status recertification.
“SBA’s proposal undermines the general rule that a concern maintains its small business/socioeconomic status for the life of a contract,” PilieroMazza attorneys wrote. “It would punish concerns that qualify and certify as small at the time of award of an unrestricted MAC, and thereafter experience organic growth that causes them to exceed the MAC’s size standard.” It also could discourage small vendors from participating in MACs at all, they added.
- SBA to allow recertification requests “at any time”: PilieroMazza also opposed SBA’s plan to allow contracting officers to request a size/status recertification at any point in time during a long-term contract.
While the SBA called it a clarification of existing rules, PilieroMazza attorneys asserted that the authority to make such a change does not exist in current regulations. Under current law, a contracting officer can only ask for recertification for a specific task order issued under a MAC. The attorneys also wrote that it would violate the general rule that size should be determined only at the time of the initial offer.
- Past and present joint venture partners: The Native Hawaiian Organizations Association opposes the SBA’s plans regarding past and present joint venture partners.
Under the proposed rule, for joint ventures not in the mentor-protege program, SBA would determine the size of the joint venture based on the size, status and affiliation of all past and present joint venture partners, even if a partner has left. The association said only present partners should be considered.
More Information:
Regulations.gov: Docket #3245-AG94.
