Under a final rule published on July 25, 2016, the U.S. Small Business Administration’s Mentor-Protégé Program is now open to all small businesses. See 81 Fed. Reg. 48558 (July 25, 2016). This significant expansion can be expected to provide real benefits to small businesses, large businesses, and government agencies. The revamped program will no doubt increase the popularity of mentor-protégé agreements among companies seeking federal contracts for goods, services, and construction. With more small-business ventures available to compete, it may also increase the number of contract opportunities actually set aside for small business.
Origin of SBA’s 8(a) Mentor-Protégé Program
The Mentor-Protégé Program was authorized by Congress in 1991 as a pilot program to help certain small businesses compete for Defense Department contracts. By 1998, the SBA was administering a program to help socially and economically disadvantaged small businesses. These businesses were called “8(a) companies” because the program was authorized by section 8(a) of the Small Business Act. Qualified companies acting as mentors provided technical, managerial, and financial assistance to help 8(a) companies compete for federal contracts.
By 2011, roughly 1,000 participating mentor-protégé joint ventures held federal contracts, with about half of those monitored by the SBA. Twelve other participating agencies oversee and administer the other half of existing mentor-protégé participants. Each agency has its own rules and monitoring program.