Wednesday, September 28, 2016

Changes Coming to DoD's Mentor-Protege Program

The Department of Defense (DoD) published a proposed rule regarding its Mentor-Protege program last week. The Mentor-Protege program has been around since 1991 and was intended to provide incentives to major DoD contractors to furnish eligible small business - primarily disadvantaged small business -concerns with assistance designed to enhance the capabilities of eligible small business concerns to perform as subcontractors and suppliers under DoD contracts (and subcontracts) and to increase the participation of such business concerns as subcontractors and suppliers under DoD contracts as well as non-DoD contracts and commercial contracts.

The revised rule is intended to implement section 861 of the 2016 National Defense Authorization Act (NDAA) which added new reporting requirements to Mentor firms participating in the program. Specifically, mentors are required to report all technical or management assistance provided, any new awards of subcontracts to the protege firm, extensions, increases in scope of work, or additional, unreported payments to the protege firm, among other reports.

One of the purposes for including a provision into the NDAA is to ensure that the mentor-protege program is achieving its primary purpose. According to the conference report that preceded enactment, there was concern that the program may not always be executed to most effectively achieve mandated goals. Their analysis indicated that in some cases, protege firms participating in the program had received millions of dollars in federal prime contract awards prior to the establishment of their mentor-protege agreements, indicating they may have possessed sufficient ability to market their goods and services without the need for additional developmental assistance.

Under the proposed reporting requirements, mentor firms must submit semi-annual performance reports that cover the following:

  • Dollars obligated
  • Expenditures
  • Dollars credited toward applicable subcontracting goals as a result of developmental assistance provided to the protege
  • Any new awards of subcontracts on a competitive or noncompetitive basis to the protege firm
  • All technical or management assistance provided by mentor firm personnel
  • Any extensions, increases in the scope of work, or additional pyaments not previously reported for prior awards of subcontracts
  • The amount of any progress payments or advance payments made to the protege firm
  • Any loans made by the mentor firm
  • All federal contracts awarded to the mentor firm and the protege firm as a joint venture
  • Any assistance obtained by the mentor firm for the protege firm
  • Whether there have been any changes to the terms of the mentor-protege agreement
  • A narrative describing the success assistance provided including the developmental needs of the protege firm, the impact on DoD contracts, any problems encountered, any milestones achieved, and impact of the agreement in terms of capabilities enhanced, certifications received, and technology transferred.
Section 861 of the 2016 NDAA also requires DoD to submit a report detailing whether the program is effective - thus the need for all of the aforementioned data- and for the GAO to review the program to see if it is achieving its intended resulte.

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