SBA Seeks Comment on Prospective Policy Change Regarding Mentor-Protégé Joint Venture Eligibility For Multiple Award Contracts

On July 22, 2024, the Small Business Administration (SBA) posted a notification of tribal consultation meeting and request for comments regarding updates to the HUBZone and 8(a) Business Development Programs.  Of critical importance for any contractors participating in the SBA’s Mentor-Protégé Program, SBA is also seeking comments on prospective policy changes addressing joint venture participation in SBA's programs.  SBA has identified perceptions that:

• mentor-protégé joint ventures are winning an inordinate number of orders issued under small business multiple award contracts (MACs), therefore SBA is seeking suggestions on how to incentivize a more equitable marketplace for individual small businesses who compete against mentor-protégé joint ventures for small business MACs; and
• small businesses often enter joint ventures to seek MACs because procuring-agency past performance and experience requirements make it difficult for many small businesses to qualify for the awards individually.

As such, SBA is considering a few different proposals.  First, SBA could eliminate the exception to affiliation between an SBA-approved mentor and its protégé for MACs.  Second, SBA could allow an exclusion from affiliation for a joint venture between a protégé firm and its mentor only for contracts or orders that do not exceed five years.  However, it appears that under either approach SBA intends to continue allowing mentor-protégé joint ventures to seek and be awarded single award small business contracts.

Separate and apart from comments requested on MAC eligibility for mentor-protégé joint ventures, SBA is:

• seeking comments on whether it is appropriate for a HUBZone mentor-protégé joint venture to benefit from the HUBZone price evaluation preference “when the joint venture is already benefitting from its large business mentor's lower cost structures and pricing”;
• proposing to consolidate and re-designate the separate recertification requirements for SBA's size, 8(a) BD, HUBZone, Woman-Owned Small Business, and Service-Disabled Veteran-Owned Small Business programs to reduce confusion and to ensure consistent application of the size and status recertification requirements; and
• seeking commentary on several potential opportunities for improvement to execute policy reforms designed to promote accessible, equitable, and flexible administration of federal funding and support programs for Tribal Nations.

SBA has published three dates for Tribal Consultations in August 2024 and one date for a Listening Session in Hawaii in September 2024.  SBA is requesting comments pertaining to the planned rulemaking concerning the HUBZone and 8(a) Business Development programs; general issues as they pertain to the HUBZone and 8(a) Business Development regulations; opportunities for reform under E.O. 14112; or the unique concerns of the Tribal communities.  SBA is planning to issue a proposed rule concerning the HUBZone program regulations under RIN 3245-AH68 prior to holding the Tribal Consultations.  We will provide another update once SBA has published the proposed rulemaking and seeks comments from the broader community.