SBA Modifies 8(a) Mentor/Protégé Requirements By Jonathan T. Williams One of the tools in a successful government contractor’s toolkit is the SBA’s 8(a) mentor/protégé program. Like similar mentor/protégé programs offered by other federal agencies, the SBA’s program is designed to aid the development of 8(a) firms by facilitating their receipt of needed financial, business development, marketing, and management assistance from a mentor that possesses greater resources and expertise. A protégé can also utilize a joint venture with its mentor to pursue contracts without being subject to the SBA’s joint venture affiliation rules. The advantages of the program flow to the mentor as well. It gains a valuable small business partner and potentially greater access to set-aside contracts. Businesses interested in serving as an SBA-approved mentor or protégé need to know about several recent modifications to the application process. Many of the changes are reflected in the newly-revised Mentor/Protégé Agreement template available on the SBA’s website. For example, the agreement must now include provisions indicating whether the mentor or the protégé has another SBA-approved mentor/protégé agreement or is participating in any other such programs. This information was previously requested elsewhere in the application package, but not directly in the agreement. Additionally, the “assessed needs” section of the agreement now must specifically reference and tie to the protégé’s most recent SBA-approved business plan (SBA Form 1010C). This is designed to ensure that the value the mentor imparts to the protégé is relevant to, and advances, the protégé’s business development goals. And along these same lines, the revised agreement must include a specific timeline indicating when the proposed assistance will be provided, and it must establish goals for completion of the assistance. The aim here is to assure that the protégé fully and timely realizes the benefits from its mentor. Another recent shift pertains to the experience required of the mentor. Though the mentor has always needed to have sufficient contracting experience, we are seeing the SBA focus more on whether the mentor holds three current federal government contracts. The greater focus on mentors’ experience with federal contracts will obviously impact prospective mentors that have operated primarily, if not exclusively, in the commercial sector. In our view, experience in a commercial industry is transferable for purposes of the mentor/protégé program application, as it permits the SBA to assess the skills the mentor can impart to the protégé as well as the mentor’s past performance. Nevertheless, mentors need to be aware that the lack of federal contracting experience may now present more of a hurdle during the application process. The new application requirements reflect a refining and tightening of the admission process rather than a major overhaul. Nevertheless, the changes are noteworthy because it appears that the SBA is now applying more scrutiny to mentor/protégé program applications. This is not surprising given the current governmentwide focus on increasing contractor accountability and transparency. Indeed, the last several months have seen the Obama administration express its desire to move away from sole-source and cost-reimbursement contracts, to relax Freedom of Information Act standards, and to step up efforts to collect overdue taxes from contractors. In a similar vein, the Government Accountability Office issued a report in March on purported abuses of the HUBZone program, and legislation has been introduced this year to increase contractors’ False Claims Act liability and to create websites to publicly report problem contractors. In this climate, prospective mentor/protégé program participants are advised to ensure compliance with the latest program requirements. This is particularly important because the American Recovery and Reinvestment Act of 2009 is expected to foster many new government projects for which a mentor/protégé relationship can provide a real advantage. In fact, the Naval Facilities Engineering Command in Hawaii recently awarded one of its first contracts using Recovery Act funds to a joint venture under the Department of Defense’s similar mentor/protégé program. Accordingly, contractors that heed the new program requirements and gain access to the SBA’s mentor/protégé program will have a valuable tool at their disposal. Jonathan T. Williams, a partner with PilieroMazza PLLC, practices in the areas of government contracts, litigation and corporate transactions, with an emphasis on federal procurement programs such as the SBA’s 8(a), HUBZone, and SDVOSB programs. He can be reached at jwilliams@pilieromazza.com.