Small Business Administration Mentor-Protege Program Expansion

There are several pending regulatory changes previously designated by the SBA for release this year, including a rule that will clarify the agency’s suspension, revocation and debarment procedures for contracting agents, and another that will ease eligibility requirements for the Historically Underutilized Business Zones Program, which covers businesses located in certain “historically underutilized business” areas.

But the upcoming change that has prompted the most interest for many contractors  is a pending final rule expanding the SBA’s Mentor-Protege Program, first floated in a February 2015 proposed rule.

The program allows small businesses to partner in a joint venture with a larger mentor business that can provide advice and assistance, for instance to help win or implement larger or more complex deals that the small businesses lack the resources to win on their own, while still maintaining eligibility for federal small-business set-aside contracts.

Currently, the program is limited to businesses that participate in the SBA’s 8(a) Business Development Program, which provides assistance for small businesses majority-owned and -operated by “socially and economically disadvantaged” individuals, but is expected to be extended to all businesses otherwise eligible for set-aside contracts under SBA rules.

While the exact shape of the program expansion has yet to be announced, SBA officials have most recently hinted that the rule should be finalized at some point in July, and have indicated that the program’s terms should be effectively identical to the current 8(a) Mentor-Protege Program.

If those prescriptions hold, then the program’s expansion will be overwhelmingly welcomed throughout the small-business contractor community.

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SBA Audit Finds Agencies Exaggerating Success of Small Business Contracts

The Small Business Administration’s inspector general’s office released a report this week in which it said that its review of federal agencies identified $400 million in contracts given to ineligible firms that the agencies nevertheless counted when measuring their success at working with small businesses facing socio-economic disadvantages. The report’s findings mean that flawed numbers were reported to Congress and the White House, the latter of which claimed for the first time last year that the government had met its small-business contracting goals. The federal government is required under law to attempt to award 23 percent of its contracts to small businesses, three percent of which is intended for business in economically struggling areas referred to as Historically Underutilized Business (HUB) Zones and five percent of which is intended for businesses facing social and economic disadvantages. The audit identified $208 million in contracts that federal agencies incorrectly claimed was awarded to business in HUB Zones and $219 million in contracts that federal agencies incorrectly claimed was awarded to disadvantaged businesses.

Martin Milita is a Senior Director with Duane Morris Government Strategies were he advocates on behalf of SBE, DBE AND MBE/WBE clients for the procurement of public contracts and offers assistance when clients deal with the complex issues that can arise when working with the  Federal or New Jersey legislature and other national and state offices and agencies.