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Joint ventures also must be formalized in writing-something that wasn’t a requirement in the past. The agency might accept proposals only during certain times of the year. To give itself some breathing room, the SBA will have the power to schedule “open” and “closed” periods for applications. When the SBA sought public comment on the rule, several people were concerned about the agency’s ability to process the volume of applications. Not only does the SBA have to approve a mentor-protégé agreement, it also has to OK any joint ventures between a mentor and a protégé. The SBA’s Office of Business Development is creating a unit that will review proposals for mentor-protégé partnerships. You can read it at What Else Should Small Businesses Know? The final rule change was published in the Federal Register in late July and took effect in late August. The protégé company must perform at least 40 percent of the work under the contract. Those joint ventures can then compete for any federal set-aside contracts the protégé small business would qualify for. The idea is to help small businesses increase their capacity for tackling bigger projects.Īs a result of this partnership, mentors and protégés also have the ability to form joint ventures. When a small business and another company enter an official, SBA-sanctioned mentor-protégé arrangement, the “mentor” company will provide the small business with management assistance, training, loans, equity investment and other help. Why Are Mentor-Protégé Partnerships Important?

Thanks to the new rules, the SBA estimates that 2,000 small businesses could form mentor- protégé partnerships-and go on to land more than $2 billion in federal contracts. It’s something that used to be open only to participants in the SBA’s 8(a) Business Development Program for socially and economically disadvantaged small businesses. Small Business Administration will now make its mentor-protégé program available to all small businesses. All small businesses can now qualify for SBA’s mentor-protégé program.Ī new change in federal rules could create a huge opportunity for small businesses interested in federal contracts.