SBA 8(a) Certification
Facts
 Mentor/protege program.
(a) General. The
mentor/protege program is designed to encourage approved mentors to provide various forms
of assistance to eligible Participants. This assistance may include technical and/or
management assistance; financial assistance in the form of equity investments and/or
loans; subcontracts; and/or assistance in performing prime contracts with the Government
in the form of joint venture arrangements. The purpose of the mentor/protege relationship
is to enhance the capabilities of the protege and to improve its ability to successfully
compete for contracts.
(b) Mentors. Any concern that demonstrates a commitment and the ability to assist
developing 8(a) Participants may act as a mentor and receive benefits as set forth in this
section. This includes businesses that have graduated from the 8(a) BD program, firms that
are in the transitional stage of program participation, other small businesses, and large
businesses.
(1) In order to qualify as a mentor, a concern must demonstrate that it:
(i) Possesses favorable financial health, including profitability for at least the last
two years;
(ii) Possesses good character;
(iii) Does not appear on the
federal list of debarred or suspended contractors; and
(iv) Can impart value to a protege firm due to lessons learned and practical experience
gained because of the 8(a) BD program, or through its general knowledge of government
contracting.
(2) Generally, a mentor will have no more than one protege at a time. However, the
AA/8(a)BD may authorize a concern to mentor more than one protege at a time where the
concern can demonstrate that the additional mentor/protege relationship will not adversely
affect the development of either protege firm (e.g., the second firm cannot be a
competitor of the first firm).
(3) In order to demonstrate
its favorable financial health, a firm seeking to be a mentor must submit its federal tax
returns for the last two years to SBA for review.
(4) Once approved, a mentor must annually certify that it continues to possess good
character and a favorable financial position.
(c) Proteges.
(1) In order to initially qualify as a protege firm, a Participant must:
(i) Be in the developmental stage of program participation;
(ii) Have never received an
8(a) contract; or
(ii) Have a size that is less
than half the size standard corresponding to its primary SIC code.
(2) Only firms that are in good standing in the 8(a) BD program (e.g., firms that do not
have termination or suspension proceedings against them, and are up to date with all
reporting requirements) may qualify as a protege.
(3) A protege firm may have
only one mentor at a time.
(d) Benefits.
(1) A mentor and protege may joint venture as a small business for any government
procurement, including procurements less than half the size standard corresponding to the
assigned SIC code and 8(a) sole source contracts, provided both the mentor and the protege
qualify as small for the procurement and, for purposes of 8(a) sole source requirements,
the protege has not reached the dollar limit.
(2) Notwithstanding the
requirements, in order to raise capital for the protege firm, the mentor may own an equity
interest of up to 40% in the protege firm.
(3) Notwithstanding the mentor/protege relationship, a protege firm may qualify for other
assistance as a small business, including SBA financial assistance.
(4) No determination of
affiliation or control may be found between a protege firm and its mentor based on the
mentor/protege agreement or any assistance provided pursuant to the agreement.
(e) Written agreement.
(1) The mentor and protege firms must enter a written agreement setting forth an
assessment of the protege's needs and describing the assistance the mentor commits to
provide to address those needs (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). The agreement must also provide that the mentor
will provide such assistance to the protege firm for at least one year.
(2) The written agreement must be approved by the AA/8(a)BD. The agreement will not be
approved if SBA determines that the assistance to be provided is not sufficient to promote
any real developmental gains to the protege, or if SBA determines that the agreement is
merely a vehicle to enable a non-8(a) participant to receive 8(a) contracts.
(3) The agreement must provide
that either the protege or the mentor may terminate the agreement with 30 days advance
notice to the other party to the mentor/protege relationship and to SBA.
(4) SBA will review the mentor/protege relationship annually to determine whether to
approve its continuation for another year.
(5) SBA must approve all changes to a mentor/protege agreement in advance.
(f) Evaluating the mentor/protege relationship.
(1) In its annual business plan update, the protege must report to SBA for the protege's
preceding program year:
(i) All technical and/or management assistance provided by the mentor to the protege;
(ii) All loans to and/or
equity investments made by the mentor in the protege;
(iii) All subcontracts awarded
to the protege by the mentor, and the value of each subcontract;
(iv) All federal contracts
awarded to the mentor/protege relationship as a joint venture (designating each as an
8(a), small business set aside, or unrestricted procurement), the value of each contract,
and the percentage of the contract performed and the percentage of revenue accruing to
each party to the joint venture; and
(v) A narrative describing the success such assistance has had in addressing the
developmental needs of the protege and addressing any problems encountered.
(2) The protege must annually certify to SBA whether there has been any change in the
terms of the agreement.
(3) SBA will review the
protege's report on the mentor/protege relationship as part of its annual review of the
firm's business plan. SBA may decide not to approve continuation of the agreement if it
finds that the mentor has not provided the assistance set forth in the mentor/protege
agreement or that the assistance has not resulted in any material benefits or
developmental gains to the protege.
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