![]() If the joint venture will pursue some other type of contract, such as a small business set-aside, the SBA need not–and in fact, will not–pre-approve the joint venture for that contract, although the SBA will review the joint venture for eligibility (including ensuring that the joint venture agreement meets all mandatory regulatory requirements) if a protest is filed after announcement of the award. If the joint venture is pursuing an 8(a) contract, the SBA must separately approve the joint venture before award of that contract (although the SBA is considering eliminating the requirement). In other words, once a mentor-protégé agreement is approved, any subsequent requirement for SBA approval turns on the type of contract the joint venture will pursue. Importantly, this SBA joint venture approval requirement is limited to cases in which the joint venture is pursuing 8(a) work. And, under SBA’s 8(a) joint venture regulations, the SBA must approve a joint venture before the joint venture can be awarded an 8(a) contract. SBA mentor-protégé programs are the only way in which a joint venture between a small business and large business can qualify for set-aside contracts.Īlthough 8(a) mentor-protégé joint ventures aren’t limited to pursuing 8(a) contracts, most 8(a) mentor-protégé joint ventures exclusively or primarily pursue 8(a) work. Under the 8(a) mentor-protégé program, so long as the protégé qualifies for the prime contract by size and socioeconomic status, and so long as the joint venture meets the SBA’s regulatory criteria, the mentor member of the joint venture can be a large business–even a multi-billion dollar large business. The 8(a) mentor-protégé program exempts the mentor from the analysis. If, for example, an agency issues a small business set-aside solicitation under NAICS code 541310 (Architectural Services), a joint venture ordinarily cannot qualify unless both members fall below the associated $7.5 million size standard. Under the SBA’s size regulations, a joint venture ordinarily qualifies for a set-aside contract only if both members are small under the NAICS code assigned to the acquisition. So, to encourage prospective mentors and protégés alike to form these business development relationships, the SBA created a special exception to its ordinary joint venture rules. But when the SBA established the 8(a) mentor-protégé program, it knew that most prospective mentors would seek a more concrete benefit. ![]() Why would a large business agree to provide targeted business development assistance to an 8(a) company? Well, some of them may do it for the warm fuzzy feelings they get by helping small, disadvantaged businesses. Under the 8(a) mentor-protégé program, mentor companies (which are usually large businesses) provide various forms of business development assistance to their protégés. For many years, the SBA operated a special mentor-protégé program for participants in the 8(a) Business Development Program. In a recent bid protest decision, even the GAO appeared a little confused, repeatedly mentioning SBA approval of a joint venture even though no such approval was required for the contract in question.īefore we get to the GAO’s decision, a brief background on SBA mentor-protégé agreements may be helpful. One very common misconception is that the SBA must pre-approve a mentor-protégé joint venture. ![]() But misunderstandings and misconceptions about how SBA mentor-protégé joint ventures work are pervasive. The SBA’s All Small Mentor-Protégé program offers a tremendous opportunity for participants to pursue set-aside contracts as joint venture partners.
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