An estimated $2 billion annual government contract market has been opened up to an estimated 2,000 small businesses, according to the SBA, as a result of its recently-expanded Mentor-Protégé program.All small businesses, and not just 8(a) firms, may now become protégés to joint venture with large businesses – and even other small businesses – competing for small business set-aside contracts as part of the SBA’s “all small business” Mentor-Protégé program.
The SBA has expanded the reach of the new program even wider, to include specific types of small business: HUBZone small businesses, Service Disabled Veteran Owned Small Businesses, 8(a) firms and Woman Owned Small Businesses. For example, a HUBZone small business can joint venture with a non-HUBZone firm (large or small) on a HUBZone set-aside solicitation.
Getting these benefits requires, at minimum, that the Mentor-Protégé team submit an application to the SBA for approval. Modeled after the 8(a) Mentor-Protégé program application, the all small business Mentor-Protégé application must describe the protégé’s needs, the assistance the mentor will provide (e.g., management and/or technical assistance, loans and/or equity investments, cooperation on joint venture projects, or subcontracts under prime contracts being performed by the mentor), and how this assistance will meet the protégé’s needs.
Berenzweig Leonard is well equipped to help its clients apply for the expanded Mentor-Protégé process as well as execute compliant JV agreements because we have helped our clients through the 8(a) Mentor-Protégé program on which the new Mentor-Protégé program is modeled.
We add one caution: SBA expects that the significant opportunities opened up by the new Mentor-Protégé program will lead to a flood of applications, and has raised the possibility of closing the Mentor-Protégé application process temporarily to deal with any backlog.
For that reason, we are urging interested clients to file Mentor-Protégé applications as soon as possible after the October 1, 2016 start of SBA acceptance of applications. Delay in applying can seriously delay benefitting from the new Mentor-Protégé program.