However, the mentor-protected agreement is only the first step. In order to further protect small businesses, the SBA only allows the mentor to apply for decommissioning contracts through a joint venture with their protégé. Any joint venture agreement must include provisions stipulating that the small business owns at least 51% of the joint venture. Given these minimal changes, companies that have a mentor-protected relationship that has already been approved by the SBA should not need to change or update their mentor-protected agreement. Companies considering drafting a new mentor-protected agreement should only be aware that the SBA focuses on the section of the agreement that highlights the support to be provided to the protégé. SBA has only made a few changes to the information that must be included in the mentor-protected agreement. In particular, the SBA has made it clear that it wishes to see the details of the business development assistance that the mentor will provide to the protégé by refining an existing requirement regarding the information to be included in the mentor-protégé agreement and revising the regulation so that the parties must “specifically identify the business development assistance to be provided”. before they take care of how she will improve the skills of the protégé. The SBA noted that the driving force behind this consolidation was to eliminate confusion about the perceived differences between the two programs, eliminate unnecessary duplication of functions within the SBA, and establish a unified staff to better coordinate and process requests for mentoring-protected.
As the SBA has acknowledged, the objective and benefits of both programs are identical. Many protected people do not have strong policies, procedures, or business systems. One form of mentor support is to design, compile or provide corporate documents such as record retention policies, annual review forms or proposal templates. Mentors can also provide advice on the procedures or systems that best suit the protégé. What should an internal audit process look like? What system should be used to properly document and track contract dates? Each and other of these are areas where the mentor`s experience helps a protégé avoid some of the traditional growth difficulties of a small business. Third, mentors can drive internal growth or ideas through the ideas of a protégé. Startups traditionally thrive by bringing new and innovative products or services to market. As a mentor, a company receives first-hand knowledge and access to innovative products and services from the protégé. This not only helps a company measure the pulse of new business activities, but also promotes internal growth and development through interactions with these innovative products and services. There`s no reason why mentor-protégé pairs should be a secret.
Congratulations to the SBA for publishing the list, which will be useful to contract managers and the industry (as well as those of us who are simply curious by nature). Previously, the SBA prohibited a mentor from having two protégés at the same time who were competitors of each other. The SBA has slightly simplified this regulation and provided additional guidance in its commentary on the final regulation. According to the 2019 NDAA, the SBA has added two provisions to encourage mentors to establish mentor-protégé relationships with protégés headquartered in the Commonwealth of Puerto Rico: SBA continues to focus on preventing abuse of this program. Commenting on the final rule, the SBA noted that it “does not want a company that has become different from small in its primary NAICS codes to enter into a mentor-protected relationship in a NAICS code in which it had no experience simply because it qualified as small in that other NAICS code.” The SBA expressed concern about the downstream consequences of a joint venture between a mentor and a protégé who has no experience with the NAICS code in which the relationship is established. Qualification for this exemption requires the approval of the Mentor-Protégé agreement proposed by the SBA. Once the agreement is approved, the mentor and protégé can form joint ventures to pursue small business opportunities without having to worry about the size of the mentor. .
