Small businesses and large businesses can both enjoy numerous benefits under the Small Business Administration’s (SBA) Mentor-Protégé Program (MPP). The first step to realizing these benefits is understanding the requirements, challenges, and opportunities of the MPP.

Designed to empower small businesses and help them succeed in the world of the U.S. Federal market, the MPP provides a framework for knowledge transfer, resource sharing, and growth. Through the MPP, protégé small businesses gain access to the networks, capacity, and support of larger, more established firms, while mentor companies can leverage more opportunities to support owners with small-business set-asides while helping the industry grow as a whole.

As presented at the 2024 Society of American Military Engineers (SAME) Small Business Conference in New Orleans, LA, by Hill Executive Consultant Jane Penny, PE; LRS Federal Vice President (SDVOSB) Robyn Scott, PMP; AECOM Small Business Director and SBLO Shawn Ralston; USACE Director of Small Business Liz Walker; Department of State Division Director, Buildings, Construction and Engineering James Waggoner; and U.S. Small Business Administration Deputy General Counsel John Klein, this article discusses how the MPP works, offers tips for maximizing the mentor-protégé relationship, and clarifies what joint venture (JV) partners must do to maintain their MPP status.

Ground Rules

For companies looking to enter into a formal mentor-protégé agreement, it is important to note that there are clear requirements in place to realize the benefits of the MPP. Specifically:

• This is not a “get to know you” program. A strong previous working relationship is required, especially once you start performing work through the JV – expectations must be aligned.
• The SB is the managing partner (with all the standard managing partner responsibilities) and for LBs this can create challenges – education is key.
• The larger the mentor, the more work required to ensure that everyone in the organization is onboard and is fully incorporated into all relevant efforts, including business development efforts.
• There must be at least two agreement champions (one lead & one back-up) to ensure the relationship stays on track.
• The SB Program Manager needs to have a seat at the table and conduct separate plus check with the protégé throughout the agreement.
• Monthly status calls are recommended – MPA & BD activities covered.
• The agreement champions should be the conduit for communication – a large business can easily overwhelm a SB with communications.
• Be selective. SB’s may only engage in two SBA Mentor-Protégé relationships for the duration of the SB’s existence. For mentors, they many only support three protégé firms at a time. Choose partnerships wisely.

Responsibilities

Once entered in the JV, each partner has specific responsibilities. For the larger partner, these include:

• Management and technical assistance.
• Financial assistance.
• Contracting assistance.
• International trade education.
• Business development assistance.
• Administrative assistance.

For protégé firms, specific responsibilities include:

• Perform at least 40% of contracted work.
• Submit annual reports.
• Submit project-end and end-of-year compliance reports.

If either partner does not comply with these requirements, the SBA may terminate the agreement for non-compliance.

Best Practices

To make the most of the mentor-protégé partnership, champions, the SB manager, and all others involved (especially at the larger firm), can follow several general lessons learned and best practices. These include:

• Work plans are key for individual contract pursuits. The more details you can get into the addendums, the better for conducting work through the JV – at least 40% of JV performance is done by SB – What is the plan?
• Plan for JV activities to outlast the mentor-protégé agreement. There must be a plan to keep the relationship healthy once the agreement ends and the mentor has started mentoring new firms, and even if the SB has grown into a larger company.
• It is important for both parties to have a long-term focus. Do not get bogged down on any one pursuit or contract. Think of the overall benefit and less on the immediate project/pursuit.

Once the mentor-protégé agreement is finalized by the SBA District Office, the JV can now pursue opportunities with contracting agencies.

Growing with USACE

USACE offers an excellent partner for JV’s seeking to support construction programs and projects, and often utilizes mentor-protégé JVs. The benefits to USACE and other owners is direct support for small business set-asides and small business goal achievements along with the development of a strong small business industrial base. USACE data points to note include:

• 70% USACE Industrial Base are Small Businesses
• $827.6M small business obligations awarded to JVs in FY24 (8% SB Spend)
• 10-15% of Small Business IDIQ awards are to JVs
• Joint Ventures support construction, facilities support, remediation and engineering services

Given these trends, it is unsurprising more firms are entering into mentor-protégé JV agreements. The MPP demonstrates the power of collaboration in driving growth and enhancing expertise at a time when the AEC industry as a whole and the U.S. Federal government specifically is seeking innovate ways to deliver complex programs and projects.

For small businesses, participating in a MPP JV can be transformative, enabling smaller firms to pursue new opportunities and achieve sustainable growth. For mentors, the program can support strategic business goals while also expanding the pool of industry talent.

For more information on navigating the SBA’s MPP, reach out to the panelists below:

John Klein:  [email protected]

Liz Walker: [email protected]

James Waggoner: [email protected]

Shawn Ralston: [email protected]

Robyn Scott: [email protected]

Jane Penny: [email protected]