On February 28, 2022, the Department of Defense (“DoD”) published a proposed rule to reauthorize and improve DoD’s Mentor-Protégé Program (“the Program”).
Briefly, under the Program, approved mentor firms enter into mentor-protege agreements with eligible protege firms to provide developmental assistance to enhance the capabilities of the protégé firms to perform as subcontractors and suppliers under DoD contracts and other contracts and subcontracts. The mentor may receive either cost reimbursement or credit against applicable subcontracting goals established under contracts with DoD or other Federal agencies.
This proposed rule implements Section 872 of the National Defense Authorization Act (“NDAA”) for Fiscal Year (“FY”) 2020, which among other actions, extended the date through which participants could enter into a mentor-protégé agreement from September 30, 2018 to September 24, 2024 and shortened the program participation term.
DoD reports that this Program has since the following changes in participation since the expiration of authority to enter into new agreements in September 30, 2018 followed by the reauthorization in the FY 2020 NDAA:
- In FY 2018 and FY 2019, there were 90 on-going agreements, with 4 expiring in FY 2019 and no new agreements approved in FY 2019;
- In FY 2020, there were 86 on-going agreements, with 29 expiring in FY 2020;
- As of June 2021, there were 57 on-going agreements, with 12 expiring, as well as 50 new mentor-protégé agreements; and
- DoD estimates there will be 66, 82, and 98 new agreements in FY 2022, FY 2023, and FY 2024, respectively.
Among other administrative changes, the proposed rule would impact Defense Federal Acquisition Regulation Supplement (“DFARS”) subpart 219.71 and Appendix I, Policy and Procedures for the DoD Pilot Mentor-Protégé Program by the following:
- The date for entering into a mentor-protégé agreement will be extended to September 30, 2024 in Appendix I-103;
- The date for mentor reimbursements to be paid for developmental assistance costs incurred under the Program will be extended to September 30, 2026 in DFARS 219.7104(b);
- The date for a mentor to receive credit toward attainment of the subcontracting goals in its small business subcontracting plan for developmental assistance costs incurred under the Program will be extended to September 30, 2026 in DFARS 219.7104(d);
- Program participation reduced from three to two years—unless approval is otherwise obtained for an additional period not to exceed three years—in Appendix I-107;
- Eligibility of protégés expanded by removing the requirement that an entity be “less than half” the SBA size standard for its primary NAICS code in Appendix I-102 and rendering eligible to be a protégé all entities that do not exceed the size standard of their primary NAICS code; and
- DoD Office of Small Business Programs cybersecurity readiness assessment is added in DFARS 219-7102 as a benefit of program participation to be provided to protégés.
No new solicitation provisions or contract clauses would be created. In addition to expanding the industrial base, DoD anticipates the proposed rule change will benefit all parties involved—i.e., large contractors, small businesses, and the Government.
Comments are due on or before April 29, 2022. Crowell will continue to report on any developments concerning the DoD’s Mentor-Protégé Program.