Is the Mentor-Protégé Program Right for Your Government Business Strategy?
The government contracting world can be challenging—there are lots of rules and regulations to keep track of, billions of dollars being spent through various procurement methods, and tough competition among established contractors. We often hear the question “how do we make a name of ourselves amongst all of this?” from many new businesses who are wanting to break into the federal market.
While there are many strategies to consider, one that is frequently overlooked is the Small Business Administration’s (SBA) Mentor-Protégé Program. A large number of organizations seem to dismiss this method because from the outset, it can be a difficult and complex relationship to organize. However, many businesses benefit from the Mentor-Protégé Program and find it well worth the payoff. In this blog, we’ll cover what the program is and how you can get involved.
What is the SBA Mentor Protégé Program?
The SBA Mentor-Protégé Program (also referred to as MPP) helps eligible small businesses gain capacity and win government contracts through partnerships with more experienced companies. Essentially, a small business pairs up with a qualified mentor to enter and gain experience in the federal marketplace.
In terms of GSA Schedules, a GSA prime contractor can become a mentor and form a Joint Venture (JV) with a small business (protégé) to compete on contracts. GSA wants to encourage contractors to help small businesses gain access to government procurement. This program is a combination of the former 8(a) Mentor-Protégé and the All-Small Mentor-Protégé programs.
Mentor Protégé Program Benefits
There are many benefits to the Mentor-Protégé Program other than gaining more leverage into the federal market. Below, you can find some instances of how the Mentor-Protégé Program may be a good fit for your business.
- Guidance on internal business management systems, accounting, marketing, manufacturing, and strategic planning
- Financial assistance in the form of equity investments, loans, and bonding
- Assistance navigating federal contract bidding, acquisition, and the federal procurement process
- Education about international trade, strategic planning, and finding markets
- Business development, including strategy and identifying contracting and partnership opportunities
- General and administrative assistance, like human resource sharing or security clearance support
It’s important to note that a mentor and its protégé can form a Joint Venture as a small business for any small business contract, provided the protégé individually qualifies as small. The Joint Venture may also pursue any type of small business set-aside contract for which the protégé qualifies, including contracts set aside for 8(a), Service-Disabled Veteran-Owned (SDVOSB), Women-Owned (WOSB), and HUBZone businesses.
How to Qualify for the Mentor-Protégé Program
To qualify as a protégé, your business must:
- Be a small business with industry experience. You can find out if your business qualifies as small by using the Size Standards Tool. Both the tool and the table can help you find the small business classification requirements according to individual NAICS codes.
- Be organized for profit or as an agricultural cooperative
- Have a proposed mentor prior to applying for the program
To qualify as a mentor, your business must:
- Be organized for profit or as an agricultural cooperative
- Be able to carry out its responsibilities to assist the protégé
- Possess good character
- Not appear on the federal list of debarred or suspended contractors
- Be able to provide value to a protégé firm from practical experience gained or through knowledge of general business operations and government contracting
To approve the Mentor-Protégé Program agreement:
- The SBA must determine that the mentor-provided assistance will promote real developmental gains for the protégé, not just act as a vehicle to receive federal small business set-asides
- An applicant protégé and its prospective mentor may not be affiliated at the time of application
Businesses are considered “affiliates” when one party has the power to control the other, or a third-party controls or has the power to control both. It does not matter whether control is exercised, so long as the potential to control exists. SBA considers factors such as ownership, management, previous relationships with or ties to another concern, and contractual relationships in determining whether affiliation exists.
How to Apply to the SBA Mentor-Protégé Program
If you have decided you want to become a protégé or mentor in the program, it’s time to apply. Before you apply, you must:
- Make sure both businesses are registered at SAM.gov
- Decide whether you are applying for an MPA using your primary or secondary NAICS Code
- Both businesses must complete SBA’s online tutorial (save your completion certificates)
- Execute a Mentor-Protégé Agreement (MPA Addendum)
One thing to note: the Mentor Protégé Program is not a matchmaking program. You must have either a mentor or protégé in mind to apply. SBA will not find one for you.
As of November 16, 2020, the 8(a) Mentor-Protégé program and the All-Small Mentor-Protégé program have merged into one SBA Mentor-Protégé program (MPP). Given the programs’ identical purpose and benefits to participating businesses, the merger made it easier for eligible businesses to use, saving both time and resources. Additionally, it also:
- Removes the need for businesses to choose between two mentor-protégé programs
- Streamlines the new program while keeping the same benefits as the two former programs
- Requires less SBA involvement for joint ventures
Beyond merging the two programs, the final ruling includes changes to:
- Mentor-protégé agreement clarifications of Title 13 Part 125.9 of the Code of Federal Regulations (CFR)
- New and updated tools to encourage participation in the MPP
- Changes to the Joint Venture review and approval process
Succeeding as a Small Business in the Federal Marketplace
Navigating through these programs can be difficult and hard to understand. However, if you are aware of the options available to you and which program is right for your company, you’ll have better success in the government market. If you want to learn about other partnerships for small businesses, check out our blog: “GSA Schedule Partnerships for Small Businesses.” If you have any questions regarding the Mentor-Protégé Program and its benefits, don't hesitate to get in touch with us. We can help you figure out which path is best for you and your company.