Additionally, protégés do not need to undergo a size determination before participating in the program, as the normal size protest procedures act as a sufficient “check” on participants’ size certifications.
SBA MENTOR PROTEGE PROGRAM FOR SDVOSB CODE
The protégé may have up to two mentors where it can demonstrate that the second relationship pertains to an unrelated, secondary NAICS code or the first mentor does not possess the specific expertise that is the subject of the mentor-protégé agreement with the second mentor. However, the protégé must have prior experience in the secondary NAICS code and bring more to any potential joint venture with its mentor other than its small business status. Protégés must qualify as small for the size standard corresponding to its primary NAICS code or identify that it is seeking business development assistance with respect to a secondary NAICS code and qualify as small for the size standard corresponding to that NAICS code. A firm that is a protégé under a mentor-protégé relationship may also concurrently serve as a mentor in a second mentor-protégé relationship, where the firm can demonstrate that the second relationship will not compete or otherwise conflict with the first mentor-protégé relationship. Mentors are also limited to having a total of three protégés at one time. The Final Rule also changes the long-standing requirement that mentors must demonstrate “good financial condition.” Now, a mentor must only demonstrate that it can fulfill its obligations as specified under the mentor-protégé agreement. Mentors must be for-profit concerns of any size. At least initially, SBA does not intend to utilize “open and closed” enrollment periods, but reserves the right to revisit the concept if the new unit becomes overwhelmed with applications and oversight responsibilities. The new unit will process and make determinations with respect to all small business mentor-protégé agreements, with the ultimate decision-making authority vested in the Associate Administrator of Business Development. Applications for the new small business mentor-protégé program will be administered by a newly created unit within the Office of Business Development, whose sole function will be to process mentor-protégé applications and review the mentor-protégé agreements and the assistance provided under them once approved. In the Final Rule, SBA reiterates that it decided to keep the 8(a) mentor-protégé program separate and distinct from the new small business mentor-protégé program, which includes SDVOSBs, WOSBs, HUBZone concerns, and small businesses. While the Final Rule does not specify the date on which SBA will start accepting applications for the new small business mentor-protégé program, SBA officials have signaled that it will begin accepting applications on October 1, 2016. The Final Rule becomes effective on August 24, 2016. The Final Rule also contains changes in other areas of SBA’s regulations, such as the rules applying to the 8(a) and HUBZone programs. While there are a few departures from the details outlined in the Proposed Rule released nearly a year and half ago, the Final Rule generally adheres to the plan outlined in the Proposed Rule, which was modeled on the existing 8(a) mentor-protégé program. On July 25, 2016, SBA published the eagerly anticipated Final Rule establishing a governmentwide mentor-protégé program for all small business concerns.
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