Mentor-Protégé Program

An Overview
The SBA Mentor-Protege Program

 

The Design and Purpose of the Program

The Mentor-Protege Program is designed to encourage approved Mentors to provide various forms of assistance to eligible protege Participants. The purpose of the mentor-protege relationship is to enhance the capabilities of the Proteges; and to improve their ability to successfully compete for federal contracts.

 

Who is Qualified to Participate

Mentors – Any concern that demonstrates both a commitment and the ability to assist 8(a) Participants may serve as a Mentor. Mentors include: businesses that have graduated from the 8(a)BD Program; firms that are in the transitional stage of the Program; other small businesses; as well as large businesses.

  • 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 from lessons learned and practical experience gained from the 8(a) BD program, or through its general knowledge of government contracting.

  • Generally, a Mentor will not have more than one Protege at a time. However, the SBA may authorize a concern to mentor more than one protégé.
  • 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.
  • Once approved, a Mentor must annually certify that it continues to possess good character and a favorable financial position.

 

Proteges

  • To qualify initially as a Protege, an 8(a) Participant must: (i) Be in the developmental stage of the 8(a) Program, or (ii) Have never received an 8(a) contract; or, (iii) Its size is less than half the size standard corresponding to its primary SIC code.
  • The firm must be in good standing in the 8(a) BD program (i.e., firms that do not have termination or suspension proceedings against them; and are up to date with all reporting requirements).
  • A Protege firm may have only one Mentor at a time. (No exception.)

 

The Mentor-Protégé Agreement

  • The Mentor and Protege firms must enter into a written Agreement setting forth the Protege's needs and describing the assistance the Mentor is committed to provide to address those needs. These include: management, financial 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 specify that the Mentor will provide such assistance to the Protege firm for at least one year. The SBA’s AA/8(a)BD must approve the written Agreement. For its approval, the Agreement must set forth the assistance to be provided by the Mentor for promoting real and sufficient gains significant to the Protégé. The Agreement must NOT be merely a vehicle to enable the non-8(a) participant to continue to receive 8(a) contracts.
  • The Agreement must provide that either the Protege or the Mentor may terminate the Agreement with 30 days advance notice to the other party in the mentor-protege relationship; and a copy to SBA.
  • The mentor must annually certify to favorable financial health and good character.
  • SBA will review the mentor-protege relationship annually to determine whether to approve its continuation for another year.
  • SBA must approve all changes to a Mentor-Protege Agreement in advance.

 

Annual Evaluation of the Mentor-Protege Relationship

  • In its annual business plan update, as required by Sec. 124.403(a,), the Protege must report to SBA for the Protege's preceding program year:
    • All technical and/or management assistance provided by the Mentor to the Protege;
    • All loans to and/or equity investments made by the Mentor in the Protege;
    • All subcontracts awarded to the Protege by the Mentor, and the value of each subcontract;
    • 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 in the joint venture; and
    • A narrative describing the success such assistance has had in addressing the developmental needs of the Protege and addressing any problems encountered.
  • The Protege must annually certify to SBA whether there has been any change in the terms of the Agreement.
  • The mentor must annually certify to favorable financial health and good character.
  • SBA will review the Protege's report on the mentor-protege relationship as part of its annual review of the firm's business plan pursuant to Sec. 124.403. 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 to the Protege.

 

What Are the Benefits

  • In order to raise capital for the Protege firm, the Mentor may invest an equity interest of up to 40% in the Protege firm.
  • Notwithstanding the mentor-protege relationship, a Protege firm may qualify for other assistance as a small business, including SBA financial assistance.
  • 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.

 

Effective Dates

June 30, 1998: Final Rules published in the Federal Register.

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Where to Contact Us

(202) 205-6423, Office of 8(a) Business Development

U.S. Small Business Administration
8(a)BD Mentor-Protégé Program
409 – Third Street, SW
Washington, DC 20416



Where and How to Apply

  • Qualified 8(a) Participants may apply to be considered as a Protégé or Mentor with the SBA District Office where it is registered.

 

Additional Information

The SBA has a number of other programs and services available. These include training and educational programs, advisory services, publications, financial programs, and contract assistance. The agency also offers specialized programs for women business owners, veterans, international trade, and historically underutilized business zone (HUBZone) for development.

The SBA has offices located around the country. For the one nearest you, consult the telephone directory under U.S. Government; or call the Small Business Answer Desk at 1-800-8-ASK-SBA, or (202) 205-7064 (FAX). For the hearing impaired, the TDD number is (202) 205-7333.

The U.S. Small Business Administration, established in 1953, provides financial, technical and management assistance to help Americans start, run, and grow their businesses. With a portfolio of business loans,loan guarantees and disaster loans worth more than $45 billion, the SBA is the nation’s largest single financial backer of small businesses. Last year, the SBA offered management and technical assistance to more than one million small business owners. The SBA also plays a major role in the government’s disaster relief efforts by making low-interest recovery loans to both homeowners and businesses.

America’s 23 million small businesses employ more than 50 percent of the private workforce, generate more than half of the nation’s gross domestic product, and are the principal source of new jobs in the U.S. economy.

All of SBA’s programs and services are extended to the public on a non-discriminatory basis.