The Small Business Administration (SBA) just expanded its “mentor-protégé” program that gives small businesses a better chance to compete for federal contracts. The program was limited to disadvantaged businesses in the SBA’s 8(a) Business Development Program – now it’s open to all small businesses.
Under the program, small companies, the protégés, can get developmental help from larger firms, the mentors, and form a joint venture to benefit both.
The larger company is able to qualify to compete for government contracts set aside for small companies while the protégé firm can receive financial help as well as technical and management assistance.
Mentors must be approved by the SBA, which will evaluate the company’s financial health and ensure that the mentor has good character. The SBA can authorize a large company to have more than one protégé at the same time, as long as neither of the protégé companies would be adversely affected.
SBA rules make it clear that no mentor can have three protégé relationships at the same time.
Small companies can qualify as a protégé by meeting size standards set out by the SBA. In the same way that a mentor is limited to a relationship with no more than two small businesses, a protégé firm cannot have more than two mentors are the same time.
A written agreement establishing the mentor-protégé relationship is required and must be approved by the SBA in advance. The agreement can be no longer than three years, although the companies can extend an initial agreement for a second three-year term.
Here are the details on the expanded program from the SBA.