In this edition of the Bid Protest Beat, Partner Stephanie Wilson and Summer Law Clerk Alexis Nguyen discuss a recent bid protest decision from the U.S. Court of Federal Claims that confirmed that for a joint venture to be eligible for a small business set-aside as a mentor-protégé joint venture under SBA’s rules, there must be a valid mentor-protégé agreement both when the joint venture submits its initial bid and on the date of final proposal revisions.
On May 12, 2026, the U.S. Court of Federal Claims issued their opinion in the case of Primary Health Care, LLC v. United States, No. 25-1795C (Fed. Cl. May 12, 2026). In this bid protest, Primary Health Care challenged an SBA finding that it was “other than small,” preventing it from being awarded a contract that had been set aside for small businesses. The Court found that the SBA’s decision was not arbitrary nor capricious and granted judgment in favor of the Government.
To be eligible for award of a contract set aside for small businesses, the offeror must meet the SBA’s size standard for the contract. Generally, the date for determining an offeror’s size is the date on which the offeror submits a self-certification as part of its initial offer that includes price, referred to as the “snapshot-in-time” rule.
The mentor-protégé program allows for a joint venture between a small business protégé and its SBA-approved mentor to qualify as a “small business,” even if the mentor is not small, provided that the rest of the conditions for the program are met. Following a 2020 update to the SBA regulations that overhauled the mentor-protégé program, the SBA evaluates compliance with mentor-protégé joint venture agreements as of the date of the final proposal revisions.
On October 24, 2022, Distinctive Home Care (“Distinctive”) and Anglin Consulting Group (“Anglin”) entered into a mentor-protégé agreement, with Anglin as the small business protégé and Distinctive serving as its mentor. On November 15, 2022, the Defense Health Agency (“DHA”) issued a small-business set-aside. Then, on November 17, 2022, Distinctive and Anglin formed Primary Health Care, LLC, a mentor-protégé joint venture (MPJV). In its initial offer that included price, Primary Health Care self-certified that it was an eligible mentor-protégé joint venture that qualified as small for the procurement.
Prior to DHA’s award of the contract, on January 30, 2024, Distinctive notified the SBA that it wished to terminate its mentor-protégé agreement with Anglin, and it was so terminated. However, Primary Health Care continued to exist between the two parties as a joint venture and continued with the procurement process for the DHA contract, and the DHA subsequently issued a pre-award notice identifying Primary Health Care as one of the apparently successful offerors.
Another offeror filed a size status protest with the SBA, alleging that Primary Health Care was “other-than-small,” because Distinctive and Anglin did not have a valid mentor-protégé agreement. The SBA Area Director agreed, finding that Primary Health Care’s joint venture was other-than-small for the purposes of the small-business set-aside, because Distinctive and Anglin no longer had a valid mentor-protégé agreement at the time of the final proposal revision date.
Primary Health Care appealed to the SBA’s Office of Hearings and Appeals (“OHA”). While that appeal was pending, Anglin, the small business, informed the contracting officer that it was withdrawing from the joint venture, leaving Distinctive as the only member of Primary Health Care. The OHA denied Primary Health Care’s appeal and affirmed the decision of the SBA Area Director.
Primary Health Care then filed a bid protest with the Court of Federal Claims, challenging the OHA’s resolution of the size protest. Primary Health Care attempted to rely on the “snapshot-in-time” rule to claim that because it was “small” at the time it initially submitted an offer, subsequent developments are irrelevant to its size determination. In support of its argument, Primary Health Care attempted to rely on two cases, one decided in 2018 and the other in 2019, where expired or terminated mentor-protégé agreements still qualified for set-aside contracts. The Court rejected this argument, holding that under current SBA regulations, in order for a joint venture to be considered a mentor-protégé joint venture, there must be a valid mentor-protégé agreement on the date of final proposal revisions. It distinguished the two cases cited by Primary Health Care from the present one by pointing out that those cases came before the SBA changed their regulations in 2020 to have the final date for size evaluation be the final proposal revision date. The Court ruled in favor of the Government, stating that Primary Health Care was “other-than-small” by SBA standards.
What Can Government Contractors Learn From This?
Strategic partnerships between small and large government contractors can provide a pathway to new contracting opportunities and set-asides through mentor-protégé joint ventures – but they also introduce new compliance requirements. As covered in a previous edition of the Bid Protest Beat, submitting an early proposal can lock in a contractor’s small business size certification using the “snapshot-in-time” rule, but only if the offeror is a stand-alone business. Because Primary Health Care was created as a mentor-protégé joint venture, it was subject to the SBA regulations specifically governing the mentor-protégé program that established the size status determination date as the date final proposal revisions are due, which is often much later in the solicitation process.
When considering whether to use a mentor-protégé joint venture to pursue an opportunity, contractors should carefully consider the impact of the proposal timeline, the time remaining in the mentor-protégé relationship, and the status of their ongoing relationship with their mentor-protégé partner. Mentor-protégé agreements must remain active until final proposal revisions for the mentor-protégé joint venture to qualify for a set-aside contract. Understanding the procurement timeline and mentor-protégé rules, as well as choosing the right mentor-protégé partner, are important pieces of the procurement puzzle, otherwise contractors risk losing out on competitive contract awards due to expiring mentor-protégé relationships or preventable relationship breakdowns.
Interested in learning how mentor-protégé JVs could impact your eligibility? Contact Stephanie Wilson at swilson@berenzweiglaw.com.
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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