To better understand what is a mentor under the SBA All Small Mentor Protege Program (ASMPP), it might be useful to understand the underlying reason for the program. The purpose of the SBA’s Mentor Protege Program is for the Mentor to enhance and improve the protégé’s capabilities. Under 13 CFR 124.520, a mentor is supposed to help 8a certified companies to meet its business target goals in its business plan. The plan must be approved by the SBA.
According to the SBA, the underlying reason for this program is to develop sttronget small protege firms through mentor-provided business development assistance. The objective is to help small protégés successfully compete for government contracts. Mentor-provided assistance can be sought for any, or all of the following activities:
- Management and Technical Assistance;
- Financial Assistance;
- Contracting Assistance;
- Trade Education;
- Business Development Assistance; and
- General and/or Administrative Assistance.
Looking at the definition of what is a mentor under SBA regulations, the relationship between the mentor and the small business show the mentor’s ability to help its small business protégé to compete for government contracts.
What are Some Benefits of Having a Mentor?
Small businesses are generally at a disadvantage when competing for federal government contracts. By having an approved mentor, it can now show increased technical capability from the mentor’s technical and management assistance.
Having a mentor under SBA regulations allow the two companies to enter into a joint venture agreement while still avoiding tradition SBA affiliation rules. Without this level of protection, small businesses run the risk of losing government contracts through small business size protests due to affiliation.
Another benefit of having an SBA mentor is that it can legally provide financial assistance to the protege. Mentors can own up to forty percent of the protégé small business to help raise capital.
Requirements to Become an SBA Mentor Under the All Small Mentor Protégé Program 13 CFR 124.520
Understanding under the SBA ASMPP rules what is a mentor under 13 CFR 124.520 also means knowing the requirements for becoming a mentor. To qualify as an SBA mentor under, companies can be (a) graduates from the 8a Program;(b) current 8a companies in the transitional stage; (3) another small business that can demonstrate success; (d) a large business; or (e) a non-profit business. See more about the SBA mentor definition.
Under the SBA All Small Mentor Protege Program, mentors must also show a sound commitment to help members in the 8a Program, show good character, strong financials; cannot be suspended or debarred from government contracting. The mentor must also be willing to help its protege small business for at least one year.
- You should also be aware that an SBA mentor can only have one protege at a time unless approved by the SBA.
What are the Basics of Meeting the ASMPP Qualification Rules?
The SBA suggests that participants in the All Small Mentor Protege Program may joint venture as a small business, if the protégé qualifies as small for the procurement and the joint venture meets the requirements of 13 CFR 125.8(b)(2) and (c). The SBA will look at the Area Office reviewed the terms of the
joint venture agreement.
You want to make sure that your joint venture agreement satisfies each of the 12 requirements in CFR 125.8(b)(2). The JV must set forth a purpose; designating a managing venturer; providing for 51% ownership by the small business; stating that profits are commensurate to work performed; establishing a special bank account; itemizing resources for a service contract in accordance with Size Appeal of Alpine/First Preston JV II, LLC, SBA No. SIZ-5822 (2017); specifying responsibilities of negotiation, labor, and contract performance; ensuring performance; designating where records are kept; requiring that the managing joint venturer retain records; submitting quarterly financial statements for the JV; and submitting a project-end profit and loss statement. (Id. at 6.)
Be aware that under 13 CFR 125.8(c), the joint venture agreement “should at least show a division of labor or a division of responsibilities that would reasonably
allow the small business partner to perform 40% of the work done by the partners in the aggregate.”
For help becoming a mentor under SBA All Small Mentor Protege Program regulations 13 CFR 124.520, call our government small business contract lawyers at 1-866-601-5518 for a FREE INITIAL CONSULTATION.