Mentor-Protégé Agreements

1. Mentor-Protégé Agreements Jennie Montgomery Business Development Specialist

2. What is the SBA Mentor- Protégé Program? • The SBA Mentor-Protégé Program is a program designed to encourage approved Mentors to provide various forms of assistance to eligible 8(a) Participants as Protégés established by the Mentor-Protégé Agreement (MPA).

3. What is the Purpose of the SBA Mentor-Protégé Program? • The purpose of the Mentor-Protégé relationship is to enhance the capabilities of the protégé and to improve its ability to successfully compete for Federal contracts.

4. The various assistance that a Mentor may provide to a Protégé include: • Technical and/or management assistance; • Financial assistance in the form of equity investments, and/or loans; • Offerings of subcontracts; • Assistance in the performance of prime contracts with the Federal government in the form of Joint Venture arrangements.

5. Eligibility & Qualifications • Eligibility for participation in the Mentor-Protégé Program is subject to the approval of the SBA. • Mentors: To be eligible as a Mentor, a concern must demonstrate a commitment and the ability to assist developing 8(a) Participants. The concern may have graduated from the 8(a) Program, or be in the Transitional Stage of the program. Other small businesses or large businesses with the same commitment and ability may also qualify to serve as Mentors.

6. To qualify as a Mentor, a concern must demonstrate that it: • Possesses a favorable financial health, including profitability for at least the last two years; • Possesses a good character; • Does not appear on the Federal list of Debarred or Suspended Contractors; and • Can impart value to a Protégé firm due to lessons learned and practical experience gained through the 8(a) Program, or through its general knowledge of government contracting.

7. To initially qualify as a Protégé, a firm must: • Be in the Developmental Stage of the 8(a) Program; • Have NOT yet received an 8(a) contract; or • Have a size that is less than half the Size Standard corresponding to its primary NAICS code. • The firm must also be in good standing in the 8(a) Program, i.e., the firm must not have termination or suspension proceedings against it, and is up-to-date with all reporting requirements .

8. The Benefits of Participating in the Mentor-Protégé Program • Expertise, resources and capabilities of the Mentor are made available to the 8(a) Participant Protégé. • To aid the Protégé to raise capital (Mentors may own an equity interest up to 40% in the Protégé firm.). • No determination of affiliation or control may be found between a protégé firm and its mentor based on the mentor/protégé agreement or any assistance provided pursuant to the agreement. • The Protégé, due to the additional capabilities gained from the Mentor, may better qualify for other assistance as a small business, including SBA financial assistance.

9. A Mentor and Protégé may joint venture as a small business for any government procurement, including procurements with a dollar value less than half the size standard code and 8(a) sole source contracts, provided the protégé qualifies as a small for the procurement and, for purposes of 8(a) sole source requirements, the protégé has not reached the dollar limit set forth in § 124.519. • --- Revenue-based primary NAICS code at time of program entry, the limit is five times the size standard or $100 million whichever is less. • --- Employee-based primary NAICS code is $100.0 million. More Benefits of Participating in the Mentor-Protégé Program

10. Terms & Conditions for Program Participation  • The SBA must approve both Mentors and Protégés in order to participate in the Program. • The Mentor and Protégé firms must enter into a written Agreement setting forth the needs of the Protégé and the assistance to be provided by the Mentor. The Agreement must be approved by the SBA; and thereafter, will be reviewed annually for continuation. All changes to Mentor-Protégé Agreements must be approved in advance.

11. Terms & Conditions for Program Participation Cont’d • The Agreement must provide that either the Protégé or the Mentor may terminate the relationship with 30-days advance notice to the other party and to SBA. • A Protégé firm may have only one Mentor at a time. • Generally, a Mentor will have no more than one Protégé at a time. The SBA must authorize any additional Protégés.

12. Evaluating the Mentor-Protégé Relationship • In its annual updated, the Protégé must report to SBA for the protégé’s preceding program year: • All technical and/or management assistance provided by the Mentor to the Protégé; • All loans to and/or equity investments made by the Mentor in the Protégé; • All subcontracts awarded to the Protégé by the Mentor, and the value of each subcontract;

13. Further Evaluating the Mentor-Protégé Relationship • All Federal contracts awarded to the Mentor-Protégé relationship ; • A narrative describing the success such assistance has had in addressing the development needs of the Protégé and addressing any problems encountered. All technical and/or management assistance provided by the Mentor to the Protégé.

14. Mentor-Protégé Relationship Annual Requirements • The Protégé must annually certify to SBA whether there has been any change in the terms of the Agreement. • A copy of the Mentor’s and Protégé’s request to extend their Mentor-Protégé Agreement for another year to include any changes to the initial MPA; i.e., additional weaknesses to be addressed and how to be addressed by the Mentor. • A written narrative describing any problems encountered and how they were resolved since the Protégé’s last annual review (or since the Mentor-Protégé Agreement was approved, if less than a year).

15. Questions & Answers

16. U.S. Small Business Administration Dallas/Fort Worth District Office4300 Amon Carter Blvd., Suite 114Fort Worth, TX 76155(817) 684-5500