The Mentor-Protégé Program was recently in the news when the GSA paused the small business and women-owned small business solicitations for the government-wide Polaris contracts. Today we are sitting down with GovContractPros Managing Director, John Shoraka to unpack why the solicitations were paused, how small businesses should move forward, and what the GSA should do next.
GCP: The Mentor-Protégé Program was recently in the news when the GSA paused the small business and women-owned small business solicitations for the government-wide Polaris contracts. What is the backstory?
Shoraka: The Mentor-Protégé Program and the ability to create joint ventures under a Mentor-Protégé agreement used to be limited to 8(a) certified companies. The Small Business Jobs Act of 2010 expanded that program to all small businesses. Because programs take a long time to launch it did not launch until 2016. The new program allowed small businesses to team up with a large mentor, get assistance in development, and then create a joint venture.
GCP: Why are joint ventures such a good option?
Shoraka: Joint Ventures are incredibly competitive because they inherit the qualifications of both members. Imagine a company that is qualified for programs that are set aside for small businesses but then have the past performance and experience of a large company. And beyond that, a JV inherits the designations of the protégé, so if the protégé is a woman-owned business, then the JV is woman-owned. If the protégé is 8(a) certified, so is the JV. So then you have this JV superpower with all the corporate qualifications of a large company that then qualifies for programs for small companies.
GCP: So in an effort to give a leg up to small businesses it opens the door for more opportunities for large corporations. People are beginning to wonder, is this benefitting the small businesses it was created to help?
Shoraka: Category management, bundling, and consolidation is creating contracts that are larger and more complex. The intent of the program was that individually the small business can’t win, but maybe if they teamed up with a mentor then they can be more competitive and win. The goal was to open more doors for small businesses.
GCP: Why is this under a microscope now?
Shoraka: Several months ago, we saw this play out under the CIO-SP4 acquisition vehicle. In that instance, GSA attempted to limit the number of past performance references that a JV could submit from its partner venturer. This approach was protested and ultimately, JVs were allowed to submit two of the three past performance references from the partner venturer.
More recently, the Polaris acquisition vehicle allowed a JV to submit all of the past performance references from its partner venturer. In this instance, the GSA seems to have swung the pendulum in the total opposite direction. Here, individual small businesses basically threw up their hands, because they felt that they would be competing against large businesses on a small business set-aside requirement.
GCP: How do we know if the program is working?
Shoraka: Data and cost benefit analysis. The program was established to assist small businesses to contend in a much more competitive federal marketplace. Category Management, consolidation, and bundling makes it almost impossible for small businesses to be awarded large government wide acquisition vehicles. Partnering with a mentor was a solution for that environment. We knew that the cost of helping small businesses was allowing large mentors to get a share of the small business set-aside dollars; but we now have enough data to analyze to see if the cost is worth the benefits to small businesses. The government should calculate how many small business dollars are actually flowing to large mentors and if that “cost” is worth the benefit to small business in the aggregate. It may be time to tweak the program to address concerns, but we shouldn’t make changes blindly; we should let the data guide the changes.