TheSBAAllSmallMentorProtégéprogramandchanges
totheLimitationsonSubcontractingregulations
DouglasGerardProcurementCenterRepresentativeforAlabamaandGeorgia
SmallBusinessAdministrationGovernmentContractingAreaIII
TheSBAAllSmallMentor-ProtégéProgram
• Newprogramregulatedunder13CFR§125.9• Patternedonexisting8(a)Mentor-Protégéprogram• Designedasabusinessdevelopmenttool• Providefinancial,technical,and/ormanagementassistance• AllowsALLsmallbusinessprotégéstojointventurewiththeirlargebusinessmentors• Mentorcanownupto40%oftheprotégé• Exceptiontoaffiliation
Benefits
• Mentor-protégéjointventuresmayqualifyasasmallbusinessforanyfederalgovernmentcontractorsubcontractwheretheprotégéqualifiesassmallforthesizestandardassignedtotheprocurement• Protégéfirmshieldedfromafindingofaffiliationwherealargebusinessmentorownsnomorethan40%ofprotégé• Oncementor-protégérelationshipends,anyprotectionfromaffiliationalsoends• AgenciesmayprovideincentivesincontractevaluationprocesstoafirmthatwillprovidesignificantsubcontractingworktoitsSBA-approvedprotégé
BenefitsforContractingOffices
• Largersetasides• EasiertomeetSBgoalsfortheorganization
• Thementor’squalificationsareaddedtothatofthesmallbusinessreducingrisk.• Lesschanceofasizeprotest:SolongastheASMPPofficehasapprovedtheMP,theaffiliationbetweenthetwocompaniesisnegated.• Smallernumberofproposalsreceived:thenumberofapprovedMPsislessthanthenumberoflargeandsmallbusinesses
BenefitsforSmallBusinesses
• Nocosttraining• Opportunitytoparticipateinlarger,morecomplexcontracts• Funding:upto40%ofthetotalownershipequitycanbepurchasedbythementorfirmundermutuallyagreeabletermsbetweentheMPpartners.• Newrelationships:workingwithaJVpartnercanleadtoapreferredsubcontractorinfuturework.• Protectionfromaffiliationconcerns(fortheMPpartneronly)
Howtoapply
• NewlycreatedunitwithinOfficeofBusinessDevelopment• FinaldecisionmakingauthorityvestedintheSBAAA/BD• Duetoapplicationvolume/oversight,SBAmayinstituteopenenrollmentperiodsinthefuture• 8(a)mentor-programremainsseparateanddistinct• OfficeofBusinessDevelopmentwillcontinueprocessing8(a)andsmallbusinessmentor-protégéapplicationsseparately• 8(a)firmscanapplytoeitheroffice
HowtoApply
• ProspectiveapplicantsmustregisterintheSystemforAwardManagement(SAM)priortosubmittingtheirAllSmallMentor-ProtégéProgram(ASMPP)application.• Additionally,bothprospectiveProtégésandMentorsarerequired tocompleteanonlinetrainingmoduleaspartoftheapplicationprocess.• PleasenotethataMentor-Protégérelationshipshouldbeestablishedbeforestartingthisapplication– theASMPPisnotamatchingprogram.
HowtoApply
• Onlyapplicationssubmittedthroughcertify.sba.govwillbeconsidered.• IfyouappliedtotheASMPPpriortoNovember1,youwillbeinstructedtofinalizetheadministrativeprocessbyaddingyourprofiletocertify.sba.gov,anduploadingyourapplicationanddocumentsintothatrepository.PleasenotethatbothyouandyourMentorwillneedtocompletetheonlinetrainingmoduleinordertoestablishyourprofileincertify.sba.gov.• ASampleASMPAgreementtemplateisincludedattheendofthispresentation
Applications
• Applicationswillonlybeacceptedelectronicallyusingnewonlineapplicationavailableatcertify.sba.gov• Alldocuments(e.g.,signedMPAs)tobeuploadedtocertify.sba.gov• SBAretainsrighttorequestfinancialstatementsandtaxreturnsduringreportingandevaluatingprocess• ApplicantsrequiredtoregisterinSAMPRIORtocreatingprofileincertify.sba.gov• Applicants(bothmentorsandprotégés)requiredtocompleteonlinetrainingmoduleanduploadcertificateofcompletiontocertify.sba.govBEFOREcompletionofapplicationprocess
Protégéeligibility• MustbesmallunderitsprimaryNAICScodeORseekingassistanceinsecondaryNAICScodeunderwhichitissmall• Mayself-certifythatitqualifiesassmallforitsprimaryorsecondaryNAICScode• ForsecondaryNAICScodeapproval,mustdemonstratepriorexperienceandlogicalbusinessprogression• Willapprovea2nd mentoronlyif:• 2nd relationshippertainstounrelatedNAICScodeAND• Protégéseekstoacquirespecificexpertisefirstmentordoesnotpossess• SBAmayexamineprotégé’sSDVOSBorWOSBself-certificationaspartofapplicationprocess
Mentoreligibility
• Mustdemonstratecapabilityoffulfillingobligationsundermentor-protégéagreement• Maysubmitcopiesoffederaltaxreturns,auditedfinancialstatementsor,ifpubliclytraded,SECfilings• Possessgoodcharacter• Notsuspendedordebarred• Impartvalueduetolessonslearnedandpracticalexperience• Onlyfor-profitfirmsforboth8(a)andnewMPprograms• Canbeanysize• Generally,nomorethanoneprotégéatatime• Limitofthreeprotégésatonetimeifthereisnoadverseimpactonanyprotégé• Protégésmayconcurrentlyserveasamentor
WrittenMPAgreement• Agreementmustsetforthassessmentofprotégé’sneeds• Detaileddescriptionandtimelineforthedeliveryoftheassistancebythementorwhichwillenableprotégétomeetitsgoals• Minimumoneyearcommitment• SinglepointofcontactformentorresponsibleformanagingandimplementingtheMPA• Identifyanyothermentor-protégérelationshipheldbytheprotégé(eitherSBAorAgency)• WrittenagreementapprovedbyAA/BD• ChangesmustbeapprovedbytheSBA• Eitherpartymayterminatewith30daysadvancenotice• ReviewedannuallybySBA–SBAmayterminateatanytime• MustfollowtheASMPPtemplate,NOTthe8(a)template
MPparticipationperiod
• Uptothreeyearsinoneagreement,maximumofsixyearsoverall• Protégémayhavetwothree-yearMPAswithdifferentmentors• •EACHmaybeextendedanadditionalthreeyears• 8(a)approvedmentor-protégérelationshipsmaytransfertothenewmentor-protégéprogramaftergraduatingfromthe8(a)program• 8(a)participantsinlastsixmonthsoftheirprogramstermsmayapplyforan8(a)mentor-protégérelationship,asitcouldcarryovertonewsmallbusinessmentor-protégéprogram
Declinedapplications• IfSBAdeclinesapplication,protégémayfilerequestforreconsiderationwithin45days• AbletoreviseMPAduringreconsiderationtoprovideadditionalinformationanddocumentation• SBAtoissuereconsiderationdecisionwithin45days–ifdeclinedagainbutfordifferentreasons,protégécansubmitnewreconsiderationrequest• Ifapplicationisdeclined,proposedprotégécannotattempttoenterintoanothermentor-protégérelationshipwiththesamementorfora60dayperiod• Cansubmitapplicationwithnewmentoratanytime
Lessonslearned
• Makesurethatboththepotentialprotégéandmentorhavecompletedtheonlinetutorialandhavetheircertificatessavedbeforebeginningtheapplicationprocessonline• UsetheMentor-ProtégéAgreement(MPA)fortheAllSmallMentorProtégéProgram(ASMPP),whichislocatedontheSBAwebsiteandprovidedinthistraining• DONOTUSEthe8(a)Mentor-Protégétemplate-submissionsusingthattemplatewillberequireresubmissionwiththeASMPPtemplatebasedapplication.
6monthsintotheprogram…
• OfthetotalsubmissionstheSBAhasreceived,161ASMPPapplicationshavebeenapprovedasof5/5/17and26havebeendeclined• Themainreasonfordeclinesiswhenafirmdoesnotproviderequestedadditionalinformation/correctionsinthetimerequestedorfailuretomeettheprogrameligibilityrequirements.• TherewillbealistofapprovedASMPPrelationshipsontheSBAASMPPwebpageshortly– pleasecheckthatwebsiteforupdates• [email protected]
Similarlysituatedentities
• 13CFR§ 125.6(c)• Subcontractstosimilarlysituatedentities.Asmallbusinessconcernprimecontractorthatreceivesacontractlistedinparagraph(a)ofthissectionandspendscontractamountsonasubcontractorthatisasimilarlysituatedentityshallnotconsiderthosesubcontractedamountsassubcontractedforpurposesofdeterminingwhetherthesmallbusinessconcernprimecontractorhasviolatedparagraph(a)ofthissection,totheextentthesubcontractorperformstheworkwithitsownemployees.AnyworkthatthesimilarlysituatedsubcontractordoesnotperformwithitsownemployeesshallbeconsideredsubcontractedSBAwillalsoexcludeasubcontracttoasimilarlysituatedentityfromconsiderationundertheostensiblesubcontractorrule(§ 121.103(h)(4)).
Similarlysituatedentities:Example1
• Example1toparagraph(c):• AnSDVOSBCsolesourcecontractisawardedinthetotalamountof$500,000forhammers.Theprimecontractorisamanufacturerandsubcontracts51%ofthetotalamountreceived,lessthecostofmaterials($100,000)or$204,000,toanSDVOSBCsubcontractorthatmanufacturesthehammersintheU.S.Theprimecontractordoesnotviolatethelimitationonsubcontractingrequirementbecausetheamountsubcontractedtoasimilarlysituatedentity(lessthecostofmaterials)isexcludedfromthelimitationonsubcontractingcalculation.
Similarlysituatedentities:Example2
• Example2toparagraph(c):• Acompetitive8(a)BDcontractisawardedinthetotalamountof$10,000,000forjanitorialservices.Theprimecontractorsubcontracts$8,000,000ofthejanitorialservicestoanother8(a)BDcertifiedfirm.Theprimecontractordoesnotviolatethelimitationonsubcontractingforservicesbecausetheamountsubcontractedtoasimilarlysituatedentityisexcludedfromthelimitationonsubcontracting.
Similarlysituatedentities:Example3
• Example3toparagraph(c):• AWOSBset-asidecontractisawardedinthetotalamountof$1,000,000forlandscapingservices.Theprimecontractorsubcontracts$500,001toanSDVOSBCsubcontractorthatisnotalsoaWOSBundertheWOSBprogram.Theprimecontractorisinviolationofthelimitationonsubcontractingrequirementbecauseithassubcontractedmorethan50%ofthecontractamounttoanSDVOSBCsubcontractor,whichisnotconsideredsimilarlysituatedtoaWOSBprimecontractor.
Similarlysituatedentities:Exemptions
• 13CFR§ 125.6(f)Inapplicabilityoflimitationsonsubcontracting.Thelimitationsonsubcontractingdonotapplyto:
• (1)Smallbusinessset-asidecontractswithavaluegreaterthan$3,500butnot$150,000,or
• (2)Subcontracts(exceptwhereaprimeisrelyingonasimilarlysituatedentitytomeettheapplicablelimitationsonsubcontracting).
Similarlysituatedentities:Penalties
• 13CFR§ 125.6(h)• Penalties.Whoeverviolatestherequirementssetforthinparagraph(a)ofthissectionshallbesubjecttothepenaltiesprescribedin15U.S.C.645(d),exceptthatthefineshallbetreatedasthegreaterof$500,000orthedollaramountspent,inexcessofpermittedlevels,bytheentityonsubcontractors.Aparty'sfailuretocomplywiththespiritandintentofasubcontractwithasimilarlysituatedentitymaybeconsideredabasisfordebarmentonthegrounds,includingbutnotlimitedto,thatthepartieshaveviolatedthetermsofaGovernmentcontractorsubcontractpursuanttoFAR9.406-2(b)(1)(i)(48CFR9.406-2(b)(1)(i)).
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