The joint venture must be unpopulated and can be informal or formal (i.e., incorporated as an LLC or a corporation). Like the SBA 8(a) joint ventures rules, failure to obtain approval of the mentor protégé joint venture will amount to an affiliation between the mentor and protégé. The joint venture arrangement must be in writing and approved by the SBA. For example, if the protégé happens to be SDVOSB and WOSB, both the mentor and protégé can joint venture for SDVOSB, WOSB and small business set-aside contracts as long as the protégé qualifies as small for the specific procurement. However, under the new MP Program, a large business can now joint venture with its protégé to participate in small business set-aside contracts applicable to the protégé’s small business status. Likewise, many large businesses were simply not willing to work for a small business as a subcontractor. While some small business contractors have that capacity, they don’t have past performance or expertise in a particular area of work. For instance, many small businesses lack personnel, bonding capacity, startup costs, equipment, financing, or the ability to work in other geographical areas. Many small businesses have outstanding expertise in their industry, but simply don’t have the capacity to perform the work as a prime contractor. Mentor Protégé Joint Ventures – the Game Changer The SBA anticipates a large volume of applications, so I suggest that you plan the mentor protégé relationship now in order to be ready to apply. It is estimated that the program will open for application in October 2016. The SBA will likely develop standardized forms to be used for the approval process. The SBA is currently making final arrangements to implement the protocol to process and review applications. The SBA intends to have a single office review and process all applications. The mentor protégé agreement must be in writing and approved by the SBA. Generally, the mentor protégé relationship cannot extend more than three years, but the SBA may approve an extension for a second three-year term under certain circumstances. The mentor can also be a protégé at the same time if the SBA determines that the second relationship makes sense and does not create a conflict. The mentor can have up to a total of three protégé firms at one time. The mentor must be able to demonstrate that it can fulfill its obligations as a mentor. In any event, a protégé can have no more than two mentors at the same time.Īny large or small business entity organized for profit may be eligible to be a mentor. ![]() ![]() However, the SBA will approve a second mentor relationship under certain conditions. Generally, a protégé may only have one mentor at a time. However, the protégé must be small under the size standard corresponding to its primary NAICS code or identify and prove that it is seeking business development assistance with respect to a secondary NAICS code under which it is small under such size standard and has prior experience. The protégé need not be in business for any length of time. However, the assistance must make sense, which means that the protégé must need this type of training and support and the mentor must have the capacity and capability to provide such assistance.Īny SDVOSB, WOSB, HUBzone or small business may participate in the MP Program with a qualified mentor. The assistance includes, but is not limited to, technical assistance, management assistance, business development assistance, financial assistance in the form of equity investments and/or loans and bonding support, subcontracting and assistance in performing federal prime contracts through joint venture arrangements. The mentor can provide a variety of assistance to the protégé. 24, 2016.Īssistance the Mentor Can Provide Under the MP Program The New MP program rules will become effective on Aug. The SBA reports that the new MP program is substantially similar to the 8(a) mentor protégé program. The new MP Program is designed to allow mentors to provide assistance to protégé firms in order to improve the protégé’s ability to successfully compete for and perform federal project work. Now, Service Disabled Veteran Owned Small Businesses (SDVOSB), Women Owned Small Businesses (WOSB), HUBZone and Small Businesses (SB) are eligible to participate in the new MP Program. While the SBA has had a well-established mentor protégé program for SBA 8(a) certified firms, it lacked a mentor protégé program for other small businesses. ![]() On July 25, 2016, the SBA published its new Small Business Mentor Protégé Program Rules (MP Program).
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