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2 min read

SBA Issues Proposed Changes to Mentor Protege Program

President Trump wasted no time in issuing executive orders. His first executive order was on the same day he was inaugurated. Ten days later, President Trump issued Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs,” designed to reduce regulations as well as the costs associated with them.

Consolidating Mentor Protege Programs

The Small Business Administration (SBA) followed suit by conducting a review of its regulations to determine which rule can be revised or eliminated. As a result of its review, the SBA has proposed to merge the 8(a) Business Development (BD) Mentor-Protégé Program with the All Small Mentor-Protégé Program to eliminate confusion and duplication of functions within the SBA.

Program Background

The SBA created the mentor-protégé program in 1998 to encourage mentorship and provide business assistance to eligible 8(a) participants. Participants receive assistance in management, financial, and in performing Federal prime contracts through joint venture (JV) arrangements. Tribes benefit from the 8(a) program by helping diversify their economies. It supplements underfunded federal programs that include education, housing, preservation of tribal culture and language, and government services.

The Proposed New Rule

The new rule proposed eliminates the requirement that 8(a) Participants seeking 8(a) contracts as a joint venture submit the joint venture to the SBA for review and approval, revise business development program regulations to reduce the burden on its participants and clarify other regulated provisions to eliminate confusion among small businesses. The proposed rule would recognize 8(a) Participants, “as any other small business” to participate in SBA’S Small Business Mentor- Protégé Program. Under this new rule, the requirement a joint venture be “awarded no more than three contracts over a two-year period” would be eliminated. Instead, it would allow a joint venture to be awarded to an unlimited number of contracts over a two-year period. The SBA claims that removing the limit of three awards to any joint venture would reduce the burden of small businesses required to form additional joint venture entities to perform an additional contract within the two-year period.

Recertify Status

The proposed rule also requires a business concern to recertify its socioeconomic status for set-aside orders where the socioeconomic status for the order differs from the Multi-Award (MAC) contracts. The rules clarify that a concern that is at least 51% owned by an entity or tribe would not be required to recertify its status as a small business when the ownership of the concern changes to or from a wholly-owned business concern of the same entity, as long as the ultimate owner remains that entity.” The proposed rule would also allow participants in SBA’s 8(a) BD program owned by tribes not be required to request a change of ownership from the SBA. According to the SBA, these changes hold the patenting of helping small businesses save time and money.

You can make your opinion know about these proposed changes. You have until January 17, 2020 where you can submit comments by mail, hand delivery/courier, or at the Federal eRulemaking Portal at where all comments will be posted as well. The SBA may amend its proposed rules depending on the comments it receives. If you have questions about how the SBA’s proposed rules might affect you, call Whitcomb Selinsky at (866) 476-4558.