Small Business Mentor-Protégé Programs
Robert Jay Dilger
Senior Specialist in American National Government
Kate M. Manuel
Legislative Attorney
June 4, 2012
Congressional Research Service
7-5700
www.crs.gov
R41722
CRS Report for Congress
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epared for Members and Committees of Congress

Small Business Mentor-Protégé Programs

Summary
Mentor-protégé programs typically seek to pair new businesses with more experienced businesses
in mutually beneficial relationships. Protégés may receive financial, technical, or management
assistance from mentors in obtaining and performing federal contracts or subcontracts, or serving
as suppliers under such contracts or subcontracts. Mentors may receive credit toward
subcontracting goals, reimbursement of certain expenses, or other incentives.
The federal government currently has several mentor-protégé programs that seek to aid small
businesses in various ways. For example, the 8(a) Mentor-Protégé Program is a government-wide
program designed to assist small businesses “owned and controlled by socially and economically
disadvantaged individuals” that are participating in the Small Business Administration’s (SBA’s)
Minority Small Business and Capital Ownership Development Program (commonly known as the
8(a) program) in obtaining and performing federal contracts. Toward that end, mentors may (1)
form joint ventures with protégés that are eligible to perform federal contracts set aside for small
businesses; (2) make certain equity investments in protégé firms; (3) lend or subcontract to
protégé firms; and (4) provide technical or management assistance to their protégés. The
Department of Defense (DOD) Mentor-Protégé Program, in contrast, is agency-specific. It is
designed to assist various types of small businesses and other entities in obtaining and performing
DOD subcontracts and serving as suppliers on DOD contracts. Mentors may (1) make advance or
progress payments to their protégés that DOD reimburses; (2) award subcontracts to their
protégés on a noncompetitive basis when they would not otherwise be able to do so; (3) lend
money to or make investments in protégé firms; and (4) provide or arrange for other assistance.
Other agencies also have agency-specific mentor-protégé programs designed to assist various
types of small businesses or other entities in obtaining and performing subcontracts under agency
prime contracts. The Department of Homeland Security (DHS), for example, has a mentor-
protégé program wherein mentors may provide protégés with rent-free use of facilities or
equipment, temporary personnel for training, property, loans, or other assistance. Because these
programs are not based in statute, unlike the SBA and DOD programs, they generally rely upon
preexisting authorities (e.g., authorizing use of evaluation factors) or publicity to incentivize
mentor participation. See Table A-1 for a summary comparison. Although there are some issues
with the accuracy and thoroughness of some federal agency records, there are currently more than
1,100 mentor-protégé agreements in place.
Congressional interest in small business mentor-protégé programs has increased in recent years,
in part because of reports that large businesses serving as mentors have improperly received
federal contracting assistance intended for small businesses. The first session of the 112th
Congress enacted legislation (P.L. 112-81) extending the DOD Mentor-Protégé Program through
FY2015 for the formation of new agreements, and FY2018 for the reimbursement of incurred
costs under existing agreements. Also, H.R. 3985, the Building Better Business Partnerships Act
of 2012, and H.R. 4310, the National Defense Authorization Act for Fiscal Year 2013, would
require the SBA to oversee and establish standards for most federal mentor-protégé programs and
establish a mentor-protégé program for all small business concerns. The 111th Congress had
previously enacted legislation (P.L. 111-240) authorizing the SBA to establish mentor-protégé
programs for small businesses owned and controlled by service-disabled veterans, owned and
controlled by women, and small businesses located in a HUBZone, which the SBA is in the
process of doing. The programs are to be modeled on the mentor-protégé program for small
businesses participating in the SBA’s 8(a) program.
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Small Business Mentor-Protégé Programs

Contents
Introduction...................................................................................................................................... 1
8(a) Mentor-Protégé Program and Other Mentor-Protégé Programs Administered by
the SBA......................................................................................................................................... 3
8(a) Mentor-Protégé Program.................................................................................................... 3
Regulations Governing the 8(a) Mentor-Protégé Program.................................................. 4
Participant Benefits ............................................................................................................. 6
Recent Developments.......................................................................................................... 7
Mentoring Networks Under the Federal and State Technology Partnership Program............. 10
Recent Developments........................................................................................................ 11
DOD Mentor-Protégé Program...................................................................................................... 11
Regulations Governing the DOD Mentor-Protégé Program.................................................... 12
Incentives for Mentors............................................................................................................. 14
Recent Developments.............................................................................................................. 14
Other Agency-Specific Mentor-Protégé Programs ........................................................................ 15
DHS Mentor-Protégé Program ................................................................................................ 16
Regulations Governing the DHS Mentor-Protégé Program.............................................. 16
Incentives for Mentors ...................................................................................................... 17
Mentor-Protégé Programs of DOT Funding Recipients ................................................................ 19
Regulations Governing DOT Mentor-Protégé Programs ........................................................ 20
Participant Benefits ................................................................................................................. 20
Concluding Observations............................................................................................................... 21

Tables
Table 1. Other Agencies with Agency-Specific Mentor-Protégé Programs................................... 17
Table A-1. Tabular Comparison of Selected Agencies’ Mentor-Protégé Programs ....................... 23

Appendixes
Appendix. Comparison of Selected Agencies’ Mentor-Protégé Programs .................................... 23

Contacts
Author Contact Information........................................................................................................... 24

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Introduction
Mentor-protégé programs typically seek to pair new businesses and more experienced businesses
in mutually beneficial relationships. Protégés may receive financial, technical, or management
assistance from mentors in obtaining and performing federal contracts or subcontracts, or serving
as suppliers under such contracts or subcontracts, while mentors may receive credit toward
subcontracting goals, reimbursement of certain expenses, or other incentives for assisting
protégés.
Currently, the federal government has several mentor-protégé programs that seek to assist small
businesses1 in various ways, including
• the 8(a) Mentor-Protégé Program, which assists “small businesses owned and
controlled by socially and economically disadvantaged individuals” participating
in the Small Business Administration’s (SBA’s) Minority Small Business and
Capital Ownership Development Program (commonly known as the 8(a)
program) in obtaining and performing contracts with executive-branch agencies;
• the Department of Defense (DOD) Mentor-Protégé Program, which assists
various types of small businesses and other entities in performing as
subcontractors or suppliers on DOD contracts;
• other agency-specific mentor-protégé programs, such as that of the Department
of Homeland Security (DHS), which provide mentor firms incentives to
subcontract agency prime contracts with small businesses; and
• mentor-protégé programs established by recipients of certain Department of
Transportation (DOT) funding, which assist “disadvantaged business enterprises”
in obtaining and performing federally funded contracts and subcontracts.
Congressional interest in small business mentor-protégé programs has increased in recent years,
in part because of reports that large businesses serving as mentors have improperly received
federal contracting assistance intended for small businesses.2 The SBA’s suspension (and later

1 For purposes of federal procurement law, a business is “small” if it is independently owned and operated; is not
dominant in its field of operations; and meets any definitions or standards established by the SBA. 15 U.S.C.
§632(a)(1)-(2)(A). These standards focus primarily upon the size of the business as measured by the number of
employees or its gross income, but they also take into account the size of other businesses within the same industry. 13
C.F.R. §§121.101-121.108.
2 For example, in one notable instance, in October 2010, the SBA suspended a mentor participating in the 8(a) Mentor-
Protégé Program from government contracting because of allegations that the firm used “front companies” to obtain the
majority of the work and revenue under contracts set aside for small businesses. See, e.g., U.S. Small Business
Administration, “Statement from Administrator Mills on the Suspension of GTSI from Federal Contracting Program,”
Washington, DC, October 1, 2010, available at http://www.sba.gov/about-sba-services/7367/5533; U.S. Small Business
Administration, “Administrative Agreement, between GTSI Corp. (“GTSI”) and the United States Small Business
Administration (“SBA”),” Washington, DC, October 19, 2010, available at http://www.sba.gov/sites/default/files/
gtsi_admin_agreement_0.pdf. Although this suspension was lifted after changes were made in the firm’s management,
the incident highlighted broader concerns about fraud in small business programs, which can include noncompliance by
large or small businesses with the rules governing mentor-protégé programs. See, e.g., U.S. Small Business
Administration, Office of the Inspector General, “Audit of Two 8(a) Sole-Source Contracts Awarded to Contractors in
SBA’s Mentor-Protégé Program,” Report No. 07-19, Washington, DC, March 30, 2007, available at
http://archive.sba.gov/idc/groups/public/documents/sba/oig_gcbd_7-19.pdf; U.S. Government Accountability Office,
Small Business Administration: Undercover Tests Show HUBZone Program Remains Vulnerable to Fraud and Abuse,
(continued...)
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reinstatement) of a mentor in the 8(a) Mentor-Protégé Program for possible fraud, as well as
reports of other fraud in several of the SBA’s contracting programs, has also contributed to
congressional interest.
The first session of the 112th Congress enacted legislation (P.L. 112-81, the National Defense
Authorization Act for Fiscal Year 2012) extending the DOD Mentor-Protégé Program through
FY2015 for the formation of new agreements, and FY2018 for the reimbursement of incurred
costs under existing agreements. In addition, H.R. 3985, the Building Better Business
Partnerships Act of 2012, was introduced on February 8, 2012. It would authorize the SBA to
oversee and establish standards for most federal mentor-protégé programs and establish a mentor-
protégé program for all small business concerns. H.R. 4310, the National Defense Authorization
Act for Fiscal Year 2013, introduced on March 29, 2012, and passed by the House on May 18,
2012, includes these same provisions. The 111th Congress had previously enacted legislation (P.L.
111-240, the Small Business Jobs Act) authorizing the SBA to establish mentor-protégé programs
for small businesses owned and controlled by service-disabled veterans, owned and controlled by
women, and small businesses located in a HUBZone, which the SBA is in the process of doing.3
The programs are to be modeled on the mentor-protégé program for small businesses
participating in the SBA’s 8(a) program. The Small Business Jobs Act also required the
Government Accountability Office (GAO) to assess the effectiveness of mentor-protégé programs
generally.4 GAO’s findings were reported on June 15, 2011.5
This report provides an overview of the various small business mentor-protégé programs of the
federal government. As is discussed below, while all these programs are intended to assist small
businesses in performing as contractors, subcontractors, or suppliers on federal or federally
funded contracts, the programs differ significantly in their scope and operations. Table A-1 in the
Appendix provides an overview of key differences among the programs.

(...continued)
GAO-10-920T, July 28, 2010, pp. 2-4, available at http://www.gao.gov/new.items/d10920t.pdf; U.S. Government
Accountability Office, 8(a) Program: Fourteen Ineligible Firms Received $325 Million in Sole-Source and Set-Aside
Contracts
, GAO-10-425, March 30, 2010, pp. 7-22, 29, available at http://www.gao.gov/new.items/d10425.pdf; U.S.
Government Accountability Office, Service-Disabled Veteran-Owned Small Business Program: Case Studies Show
Fraud and Abuse Allowed Ineligible Firms to Obtain Millions of Dollars in Contracts
, GAO-10-108, October 23, 2009,
pp. 4-13, available at http://www.gao.gov/new.items/d10108.pdf.
3 U.S. Small Business Administration, “Small Business Jobs Act: Small Business Mentor-Protégé Programs,” 75
Federal Register
79869, December 20, 2010; and U.S. Small Business Administration, “Semiannual Regulatory
Agenda, Small Business Jobs Act: Small Business Mentor-Protégé Programs,” 76 Federal Register 40140, July 7,
2011.
4 Small Business Jobs Act of 2010, P.L. 111-240, §§1345 & 1347, 124 Stat. 2546-47 (September 27, 2010).
5 U.S. Government Accountability Office, Mentor-Protégé Programs Have Policies That Aim to Benefit Participants
But Do Not Require Postagreement Tracking
, GAO-11-548R, June 15, 2011, p. 1, available at http://www.gao.gov/
new.items/d11548r.pdf. The statute required that the report be submitted by March 26, 2011─180 days after the act’s
date of enactment, which was September 27, 2010. P.L. 111-240, §1345(c), 124 Stat. 2546.
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8(a) Mentor-Protégé Program and Other Mentor-
Protégé Programs Administered by the SBA

The SBA currently administers two mentor-protégé programs, one for firms participating in the
8(a) program6 and the other for firms in its Small Business Innovation Research (SBIR) and
Small Business Technology Transfer (STTR) programs.7 In addition, Section 1347 of the Small
Business Jobs Act of 2010 authorizes the SBA to establish additional mentor-protégé programs
for “small business concerns owned and controlled by service-disabled veterans, small business
concerns owned and controlled by women, and HUBZone small business concerns modeled on
the [8(a)] mentor-protégé program.”8 The SBA initially announced on December 20, 2010, that it
intended to issue a notice of proposed regulations regarding the establishment of mentor-protégé
programs for these three groups sometime in January 2011.9 Then, the SBA announced on July 7,
2011, that it intended to issue the proposed rules for these groups in August 2011.10 The SBA later
indicated that it planned to issue the proposed rules for these groups in either March or April
2012.11 In addition, as mentioned previously, H.R. 3985, the Building Better Business
Partnerships Act of 2012, and H.R. 4310, the National Defense Authorization Act for Fiscal Year
2013, would, among other things, authorize the SBA to establish a mentor-protégé program for all
small business concerns that is modeled on the SBA’s 8(a) Mentor-Protégé Program.
8(a) Mentor-Protégé Program
Amendments made to the Small Business Act in 1978 directed the SBA to develop a program to
“assist” small businesses owned and controlled by socially and economically disadvantaged
individuals that are eligible to receive contracts under Section 8(a) of the act (“8(a) small
businesses”) in performing these contracts.12 The SBA implemented this direction, in part, by
establishing a mentor-protégé program on July 30, 1998,13 wherein mentors “enhance the
capabilities” of 8(a) firms and “improve [their] ability to successfully compete for contracts”14 by
providing various forms of assistance. Such assistance may include

6 For more on the 8(a) program, see generally CRS Report R40744, The “8(a) Program” for Small Businesses Owned
and Controlled by the Socially and Economically Disadvantaged: Legal Requirements and Issues
, by Kate M. Manuel
and John R. Luckey.
7 For more on the SBIR and STTR programs, see generally CRS Report 96-402, Small Business Innovation Research
(SBIR) Program
, by Wendy H. Schacht.
8 P.L. 111-240, §1347(b)(3), 124 Stat. 2547.
9 U.S. Small Business Administration, “Small Business Jobs Act: Small Business Mentor-Protégé Programs,” 75
Federal Register
79869, December 20, 2010.
10 U.S. Small Business Administration, “Semiannual Regulatory Agenda, Small Business Jobs Act: Small Business
Mentor-Protégé Programs,” 76 Federal Register 40140, July 7, 2011.
11 U.S. Small Business Administration, Office of Congressional and Legislative Affairs, correspondence with Robert
Jay Dilger, Washington, DC, December 19, 2011.
12 An Act to Amend the Small Business Act and the Small Business Investment Act of 1958, P.L. 95-507, §204, 92
Stat. 1766 (codified, as amended, at 15 U.S.C. §636(j)(10)).
13 U.S. Small Business Administration, “Small Business Size Regulations; 8(a) Business Development/Small
Disadvantaged Business Status Determinations; Rules of Procedure Governing Cases Before the Office of Hearings
and Appeals: Final Rule,” 63 Federal Register 35739, June 30, 1998.
14 13 C.F.R. §124.520(a). See also U.S. General Accounting Office, Small Business: SBA Could Better Focus Its 8(a)
Program to Help Firms Obtain Contracts
, GAO/RCED-00-196, July 20, 2000, p. 14, available at http://www.gao.gov/
(continued...)
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technical and/or management assistance; financial assistance in the form of equity
investments and/or loans; subcontracts; and/or assistance in performing prime contracts with
the Government in the form of joint venture agreements.15
Although the SBA was directed to establish this mentor-protégé program, and SBA rules govern
participation in the program, as discussed below, the 8(a) Mentor-Protégé Program is
government-wide in the sense that firms in the program may enjoy the benefits of participation in
it while performing the contracts of any federal agency.16 In fact, when agencies that do not have
their own mentor-protégé programs, like those discussed below, are involved, the 8(a) Mentor-
Protégé Program may be referred to as if it were that agency’s program.17
In general, the Office of Small and Disadvantaged Business Utilization (OSDBU) at each federal
agency is responsible for administering and overseeing the agency’s mentor-protégé program, and
some agencies also coordinate the program with their contracting offices. The one exception is
the SBA’s 8(a) Mentor-Protégé Program, which is administered by the SBA’s Office of Business
Development and does not involve an OSDBU.18
As of December 16, 2011, there were 515 active mentor-protégé agreements in place.19 Also, in
FY2010, there were 469 mentor-protégé joint ventures in existence, and 187 of them won federal
contracts totaling $739.4 million.20
Regulations Governing the 8(a) Mentor-Protégé Program
SBA regulations govern various aspects of the 8(a) Mentor-Protégé Program, including who may
qualify as a mentor or protégé, the content of written agreements between mentors and protégés,
and the SBA’s evaluation of the mentor-protégé relationship. Under these regulations, “[a]ny

(...continued)
new.items/rc00196.pdf.
15 13 C.F.R. §124.520(a).
16 For example, mentor-protégé joint ventures may qualify as “small” for purposes of contracts set aside for small
businesses by any executive branch agency, not just by the SBA. The same is not necessarily true for joint ventures
involving mentors and protégés in agency-specific programs. See, e.g., U.S. Small Business Administration, “Small
Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status Determinations,” 74
Federal Register 55694, October 28, 2009 (“[A]n exception to affiliation for protégés in other Federal mentor/protégé
programs will be recognized by SBA only where specifically authorized by statute (e.g., the Department of Defense
mentor/protégé program) or where SBA has authorized an exception to affiliation for a mentor/protégé program of
another Federal agency under the procedures set forth in §121.903.”). This requirement was incorporated in the final
rule. U.S. Small Business Administration, “Small Business Size Regulations; 8(a) Business Development/Small
Disadvantaged Business Status Determinations,” 76 Federal Register 8222-8223, February 11, 2011.
17 See, e.g., Listing of Mentor Protégé Programs, available at http://www.eds-gov.com/mentorprotege/links.asp
(characterizing the Department of Agriculture as having a “mentor-protégé office”). This is a reference to the
Department of Agriculture’s Office of Small and Disadvantaged Business Utilization, which provides information
about the 8(a) Mentor-Protégé Program and other federal mentor-protégé programs. The department does not have its
own mentor-protégé program.
18 U.S. Government Accountability Office, Mentor-Protégé Programs Have Policies That Aim to Benefit Participants
But Do Not Require Postagreement Tracking, GAO-11-548R, June 15, 2011, p. 3, available at http://www.gao.gov/
new.items/d11548r.pdf.
19 U.S. Small Business Administration, Office of Congressional and Legislative Affairs, “Correspondence with Robert
Jay Dilger,” Washington, DC, December 19, 2011.
20 U.S. Small Business Administration, Office of Congressional and Legislative Affairs, “Correspondence with Robert
Jay Dilger,” Washington, DC, March 9, 2011.
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concern that demonstrates a commitment and ability to assist developing 8(a) Participants may
act as a mentor,” including large firms, small firms, firms that have graduated from the 8(a)
program, and other 8(a) firms that are in the
“transitional stage,” or final five years of the
“Socially and economically disadvantaged
8(a) Program.21 Only firms approved by the
individuals,” for purposes of the 8(a) Program
SBA may serve as mentors, and SBA regulations
require that mentors (1) possess “favorable
Individuals who belong to one of the fol owing racial
or ethnic groups, or who can prove that they are
financial health”;22 (2) possess “good
personally socially disadvantaged, and who have a
character”;23 (3) not be debarred or suspended
personal net worth of $250,000 or less at the time of
from government contracting; and (4) be able to
application to the program ($750,000 for continuing
“impart value to a protégé firm due to lessons
eligibility) may be approved by the SBA to participate
learned and practical experienced gained
in the 8(a) Program for up to nine years:
because of the [8(a) program], or through …
Black Americans; Hispanic Americans; Native
general knowledge of government
Americans (American Indians, Eskimos, Aleuts, or
Native Hawaiians); Asian Pacific Americans (persons
contracting.”24 Protégés, in turn, are required by
with origins from Burma, Thailand, Malaysia, Indonesia,
SBA regulations to be small businesses “owned
Singapore, Brunei, Japan, China (including Hong Kong),
and controlled by socially and economically
Taiwan, Laos, Cambodia (Kampuchea), Vietnam,
disadvantaged individuals” that are in good
Korea, The Philippines, U.S. Trust Territory of the
standing in the 8(a) Program.
Pacific Islands (Republic of Palau), Republic of the
Marshall Islands, Federated States of Micronesia, the
Commonwealth of the Northern Mariana Islands,
In addition, under these regulations, protégés
Guam, Samoa, Macao, Fiji, Tonga, Kiribati, Tuvalu, or
must (1) be in the “developmental stage,” or the
Nauru); Subcontinent Asian Americans (persons with
first four years of the program; (2) have never
origins from India, Pakistan, Bangladesh, Sri Lanka,
received an 8(a) contract; or (3) have a size that
Bhutan, the Maldives Islands, or Nepal); and members
of other groups designated from time to time by SBA.
is less than half the size standard corresponding
Source: 13 C.F.R. §§124.103-124.104
to their primary North American Industry
mentor at a time, and a mentor generally could
not have more than one protégé.25 However, these restrictions were removed effective March 14,
2011.26
The SBA requires that mentors and protégés enter a written agreement, approved by the SBA’s
Associate Administrator for Business Development, that assesses the protégé’s needs and
describes the assistance the mentor will provide.27 This agreement generally obligates the mentor

21 13 C.F.R. §124.520(b).
22 This includes demonstrating profitability for at least the past two years. 13 C.F.R. §124.520(b)(1)(i). Until recently,
SBA regulations required that prospective mentors submit their federal tax returns for the past two years to the SBA for
review in order to demonstrate their “favorable financial health.” 13 C.F.R. §124.520(b)(3) (2010). However, this
requirement changed effective March 14, 2011. See U.S. Small Business Administration, “Small Business Size
Regulations; 8(a) Business Development/Small Disadvantaged Business Status Determinations,” 76 Federal Register
8243, February 11, 2011, and discussion under recent developments. Approved mentors must also certify annually that
they continue to possess favorable financial health and good character. 13 C.F.R. §124.520(b)(4).
23 “Good character” is not defined for purposes of this provision, although SBA regulations otherwise address what it
means for individuals applying to the 8(a) program to possess “good character.” See 13 C.F.R. §124.108(a).
24 13 C.F.R. §124.520(b)(1)(i)-(iv).
25 13 C.F.R. §124.520(b)(2) & (c)(3) (2010).
26 See U.S. Small Business Administration, “Small Business Size Regulations; 8(a) Business Development/Small
Disadvantaged Business Status Determinations,” 76 Federal Register 8243, February 11, 2011, and discussion under
recent developments.
27 13 C.F.R. §124.520(e)(1). The SBA will not approve the agreement if it determines that the assistance to be provided
is insufficient to promote any developmental gains by the protégé, or if the SBA determines that the agreement is
(continued...)
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to furnish assistance to the protégé for at least one year,28 although it does allow either mentor or
protégé to terminate the agreement with 30 days’ advance notice to the other party and the SBA.29
In addition, the agreement provides that the SBA will review the mentor-protégé agreement
annually to determine whether to approve its continuation.30 The SBA’s evaluation is based, in
part, on the protégé’s annual reports regarding its contacts with its mentor and the benefits it has
received from the mentor-protégé relationship, including (1) all technical or management
assistance the mentor has provided to the protégé; (2) all loans to or equity investments made by
the mentor in the protégé; (3) all subcontracts awarded to the protégé by the mentor; and (4) all
federal contracts awarded to a joint venture of the mentor and protégé.31
Participant Benefits
Participation in the 8(a) Mentor-Protégé Program is intended to benefit both mentors and
protégés. Serving as a mentor to an 8(a) firm counts toward any subcontracting requirements to
which the mentor firm may be subject under Section 8(d) of the Small Business Act.32 Section
8(d) requires that all federal contractors awarded a contract valued in excess of $650,000 ($1.5
million for construction contracts) that offers subcontracting possibilities agree to a
“subcontracting plan” which ensures that small businesses have “the maximum practicable
opportunity to participate in [contract] performance.”33 In addition, in certain circumstances,
mentors may form joint ventures with their protégés that are eligible to be awarded an 8(a)
contract or another contract set aside for small businesses.34 Mentor firms and joint ventures
involving mentor firms would otherwise generally be ineligible for such contracts because they
would not qualify as “small” under the SBA regulations.35 Mentor firms may also acquire an
equity interest of up to 40% in the protégé firm in order to help the protégé firm raise capital.36
Because mentor firms are not 8(a) participants, they would generally be prohibited from owning
more than 10%-20% of an 8(a) firm.37 However, their participation in the 8(a) program permits
them to acquire a larger ownership share.

(...continued)
merely a vehicle to enable a non-8(a) firm to receive 8(a) contracts. 13 C.F.R. §124.520(e)(2). The SBA must also
approve all changes to the agreement in advance. 13 C.F.R. §124.520(e)(5).
28 13 C.F.R. §124.520(e)(1).
29 13 C.F.R. §124.520(e)(3).
30 13 C.F.R. §124.520(e)(4).
31 13 C.F.R. §124.112(b)(6); 13 C.F.R. §124.520(f)(1)-(3).
32 13 C.F.R. §125.3(b)(3)(ix).
33 15 U.S.C. §637(d)(3)(A).
34 13 C.F.R. §124.513(b)(3); 13 C.F.R. §124.520(d)(1). For the joint venture to be eligible for the award, the protégé
must qualify as small for the size standard corresponding to the NAICS code assigned to the procurement, and must not
have “reached the dollar limit set forth in §124.519.” Id. §124.519 generally prohibits 8(a) firms from receiving
additional sole-source awards once they have received a combined total of competitive and sole-source awards in
excess of $100 million, in the case of firms whose size is based on their number of employees, or in excess of an
amount equivalent to the lesser of (1) $100 million or (2) five times the size standard for the industry, in the case of
firms whose size is based on their revenues.
35 See 13 C.F.R. §124.520(d)(3); 13 C.F.R. §§121.101-121.108; and generally 13 C.F.R. §121.103.
36 13 C.F.R. §124.520(d)(2).
37 13 C.F.R. §124.105(h)(1). Ownership is limited to 10% when the 8(a) firm in is the “developmental stage” of the
8(a) program and 20% when it is in the “transitional stage.” Id. The developmental stage consists of the first four years
of the 8(a) program, while the transitional stage consists of the last five years.
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Protégés not only receive various forms of assistance from their mentors, but also may generally
retain their status as “small businesses” while doing so.38 If they received similar assistance from
entities other than their mentors, they could risk being found to be other than “small” because of
how the SBA determines size. The SBA combines the gross income of the firm, or the number of
its employees, with those of its “affiliates” when determining whether the firm is small,39 and the
SBA could potentially find that firms are affiliates because of assistance such as that which
mentors provide to protégés.40 However, SBA regulations provide that “[n]o determination of
affiliation or control may be found between a protégé firm and its mentor based on the mentor-
protégé agreement or any assistance provided pursuant to the agreement.”41
Recent Developments
The 8(a) Mentor-Protégé Program has recently been the subject of congressional and agency
attention for a number of reasons, including reports of fraud in the program.42 In addition, in
2010, the Government Accountability Office (GAO) reported that the “SBA did not maintain an
accurate inventory of 8(a) Mentor-Protégé Program participant data, which limited the agency’s
ability to monitor these firms,”43 and concluded that the “SBA has not been able to properly
oversee this program.”44
Legislation enacted in the 111th Congress required GAO to conduct a study of the 8(a) program
and “other relationships and strategic alliances pairing a larger business and a small business
concern” to gain access to federal contracts.45 The purpose of this study was “to determine
whether the programs and relationships are effectively supporting the goal of increasing the
participation of small business concerns in government contracting,”46 and GAO’s report was
submitted to the House and Senate Committees on Small Business on June 15, 2011.47
In this report, GAO examined mentor-protégé programs in 13 federal agencies it identified as
having a mentor-protégé program, including the SBA. It reported that “similar policies and
procedures exist in most federal mentor-protégé programs,” but that some differences exist.48 For

38 13 C.F.R. §124.520(d)(3). But see 13 C.F.R. §121.103(b)(6) (noting that, while a protégé is not an affiliate of its
mentor because it receives assistance from its mentor under the mentor-protégé program, “[a]ffiliation may be found
for other reasons”).
39 13 C.F.R. §§121.101-121.108. Firms are “affiliates” when “one controls or has the power to control the other, or a
third party or parties controls or has the power to control both.” 13 C.F.R. §121.103(a)(1).
40 See generally 13 C.F.R. §121.103.
41 13 C.F.R. §124.520(d)(4).
42 For more on the 8(a) Program, see generally CRS Report R40744, The “8(a) Program” for Small Businesses Owned
and Controlled by the Socially and Economically Disadvantaged: Legal Requirements and Issues
, by Kate M. Manuel
and John R. Luckey.
43 U.S. Government Accountability Office, Small Business Administration: Steps Have Been Taken to Improve
Administration of the 8(a) Program, but Key Controls for Continued Eligibility Need Strengthening
, GAO-10-353,
March 30, 2010, preface, available at http://www.gao.gov/new.items/d10353.pdf.
44 Id. at 24.
45 P.L. 111-240, §1345(a), 124 Stat. 2546.
46 Id.
47 See U.S. Government Accountability Office, Mentor-Protégé Programs Have Policies That Aim to Benefit
Participants But Do Not Require Postagreement Tracking
, GAO-11-548R, June 15, 2011, p. 1, available at
http://www.gao.gov/new.items/d11548r.pdf.
48 Id. at 4.
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example, GAO noted that “different agencies have varying guidance regarding the length of
mentor-protégé agreements and whether protégés are allowed to have more than one mentor,” and
the “DOD mentor-protégé program is the only mentor-protégé program mandated by law and
receiving appropriated funding.”49
GAO also reported that “most agencies have policies and reporting requirements to help ensure
that protégés are benefiting from participation in their mentor-protégé programs.”50 However, it
found that only the Department of Defense, the National Aeronautics and Space Administration,
and the U.S. Agency for International Development “have policies in place to collect information
on protégé progress after the mentor-protégé agreements have terminated.”51 GAO recommended
that all of the agencies it examined “consider collecting and maintaining protégé post-completion
information” because that information “could be used to help [the agencies] further assess the
success of their programs and help ensure that small businesses are benefiting from participation
in the programs as intended.”52
H.R. 3985, the Building Better Business Partnerships Act of 2012, proposes to reduce the
variation that GAO found among federal mentor-protégé programs by requiring the SBA
administrator to issue regulations with respect to mentor-protégé programs not later than 270 days
after the bill’s enactment. The bill would require that these regulations address, at a minimum, 10
items, including the eligibility criteria for program participants, the types of developmental
assistance to be provided by mentors, the length of mentor-protégé relationships, the effect of
mentor-protégé relationships on contracting, the benefits that accrue to a mentor as a result of
their program participation, reporting requirements, and post-participation reporting
requirements. The bill would also prohibit federal agencies from implementing a mentor-protégé
program unless the agency submits a plan for the program to the SBA for approval, and the SBA
administrator approves the plan. DOD’s Mentor-Protégé Program and mentoring assistance under
the Small Business Innovation Research Program and the Small Business Technology Transfer
Program would be exempt from the approval process.53 The bill would also authorize the SBA to
establish a mentor-protégé program for all small business concerns that is modeled on the SBA’s
8(a) Mentor-Protégé Program. H.R. 4310, the National Defense Authorization Act for Fiscal Year
2013, also includes these provisions.
As mentioned previously, P.L. 111-240, the Small Business Jobs Act of 2010, authorized the SBA
to establish mentor-protégé programs for small businesses owned and controlled by service-
disabled veterans, owned and controlled by women, and small businesses located in a HUBZone,
which the SBA is in the process of doing.54 The programs are to be modeled on the mentor-
protégé program for small businesses participating in the SBA’s 8(a) program.

49 Id. at 4 and 5.
50 Id. at 9.
51 Id.
52 Id.
53 Any federal mentor-protégé program in effect at the date of the bill’s enactment would be provided a year to submit
and receive SBA approval to carry out a mentor-protégé program.
54 U.S. Small Business Administration, “Small Business Jobs Act: Small Business Mentor-Protégé Programs,” 75
Federal Register
79869, December 20, 2010; and U.S. Small Business Administration, “Semiannual Regulatory
Agenda, Small Business Jobs Act: Small Business Mentor-Protégé Programs,” 76 Federal Register 40140, July 7,
2011. The Small Business Jobs Act of 2010 did not provide a deadline for the SBA to establish the mentor-protégé
programs for small businesses owned and controlled by service-disabled veterans, owned and controlled by women,
and small businesses located in a HUBZone.
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The SBA has also revised its regulations pertaining to the 8(a) program.55 Among the changes,
which took effect on March 14, 2011, are some pertaining to the 8(a) Mentor-Protégé Program.
These changes
• require that assistance provided through the mentor-protégé relationship be tied
to the protégé’s SBA-approved business plan;
• allow mentors to have up to three protégés;
• allow firms seeking to become mentors to submit audited financial statements or
other evidence to demonstrate their “favorable financial health”;
• explicitly recognize non-profits as potential mentors;
• permit protégés to have a second mentor in certain circumstances;56
• prohibit SBA from approving a mentor-protégé agreement if the proposed
protégé has less than six months remaining in its term in the 8(a) program;
• permit firms to request reconsideration of SBA’s denial of a proposed mentor-
protégé agreement;
• require firms whose proposed mentor-protégé agreement is rejected to wait at
least 60 calendar days before submitting a new mentor-protégé agreement with
the same proposed mentor;
• authorize SBA to recommend the issuance of a “stop work” order on any
executive branch contract performed by a mentor-protégé joint venture when it
determines that the mentor has not provided the protégé with the development
assistance set forth in the mentor-protégé agreement; and
• prohibit mentors who are terminated for failure to provide assistance under their
mentor-protégé agreement from serving as a mentor for two years.57
In addition, the SBA made several changes to the regulations governing joint ventures between
8(a) mentors and protégés to ensure that “non-sophisticated 8(a) firms” are not “taken advantage
of by certain non-8(a) joint venture partners.”58 Specifically, the SBA now requires that (1) the
8(a) firm receive profits from the joint venture commensurate with the work it performs; (2) the
8(a) firm perform at least 40% of the work done by the joint venture; and (3) each 8(a) firm that
performs an 8(a) contract through a joint venture report to the SBA how it performed the required
percentages of the work (i.e., how the joint venture performed at least 50% of the work of the
contract, as well as how the 8(a) participant to the joint venture performed at least 40% of the
work done by the joint venture).59 Further, under the amended regulations, non-8(a) firms that

55 U.S. Small Business Administration, “Small Business Size Regulations; 8(a) Business Development/Small
Disadvantaged Business Status Determinations,” 76 Federal Register 8222-8223, February 11, 2011.
56 To obtain a second mentor, a protégé would have to demonstrate that (1) the second relationship pertains to an
unrelated secondary NAICS code; (2) the first mentor does not possess the specific expertise that is the subject of the
mentor-protégé agreement with the second mentor; and (3) the two relationships will not compete or otherwise conflict
with each other.
57 76 Federal Register at 8244-47.
58 Id. at 8243.
59 Id. at 8242-43. Under the revised regulations, joint ventures established and approved by SBA would also be eligible
to receive additional contracts if an addendum to the joint venture agreement setting forth the performance
requirements on such contracts is provided to and approved by the SBA prior to the contract award.
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form joint ventures with 8(a) firms to perform sole-source contracts in excess of $4 million ($6.5
million for manufacturing contracts) are generally prohibited from serving as subcontractors (at
any tier) on the contract.60 However, this latter provision is arguably most relevant to joint
ventures involving 8(a) firms owned by Alaska Native Corporations or other entities which, until
recently, were eligible for sole-source awards of any amount without any justifications or
approvals required from the procuring agency.61
Mentoring Networks Under the Federal and State Technology
Partnership Program

In 2000, Congress amended the Small Business Act by directing the SBA Administrator to
establish the Federal and State Technology (FAST) Partnership Program in order to “strengthen
the technological competitiveness of small business concerns in the States”62 by providing a wide
range of assistance, including mentoring. Congress further authorized SBA to make grants and
enter cooperative agreements with states and state-endorsed non-profit organizations as part of
the FAST program so as to enhance
outreach, financial support, and technical assistance to technology-based small business
concerns participating in or interested in participating in an SBIR program, including
initiatives … to establish or operate a Mentoring Network within the FAST program to
provide business advice and counseling that will assist small business concerns that have
been identified by FAST program participants, program managers of participating SBIR
agencies, the [SBA], or other entities that are knowledgeable about the SBIR and STTR
program as good candidates for the SBIR and STTR programs, and that would benefit from
mentoring.63
Such mentoring networks are to (1) provide business advice and counseling; (2) identify
volunteer mentors to guide small businesses in proposal writing, marketing, etc.; (3) have
experience working with small businesses participating in the SBIR and STTR programs; and (4)
agree to reimburse volunteer mentors for out-of-pocket expenses related to service as a mentor.64
In FY2010, the SBA made FAST partnership awards of $100,000 to 20 states, for a total of $2
million.65 The program received an appropriation of $2 million in FY2011 and FY2012.66

60 Id. at 8241. The non-8(a) firm may serve as a subcontractor only if the SBA’s Associate Administrator for Business
Development determines that other potential subcontractors are not available. Id.
61 See generally CRS Report R40855, Contracting Programs for Alaska Native Corporations: Historical Development
and Legal Authorities
, by Kate M. Manuel, John R. Luckey, and Jane M. Smith.
62 Consolidated Appropriations Act, 2001, P.L. 106-554, §111, 114 Stat. 2764A-674 to 2764A-680 (December 21,
2000) (codified at 15 U.S.C. §657d(b)). The program expired on September 30, 2005, and was reauthorized under the
Consolidated Appropriations Act, 2010, P.L. 111-117, “Small Business Administration”—“Salaries and Expenses,”
123 Stat. 3198 (December 16, 2009) (codified at 15 U.S.C. §657d(b)).
63 15 U.S.C. §657d(c)(1)(E)(ii).
64 15 U.S.C. §657e(c)(1)-(5).
65 U.S. Small Business Administration, “Office of Technology - SBIR/STTR: 2010 FAST Award Recipients,”
Washington, DC, available at http://archive.sba.gov/aboutsba/sbaprograms/sbir/SBIR_2010-FAST-
AWARD_RECIP.html.
66 P.L. 112-8; and P.L. 112-74, “Small Business Administration”—“Salaries and Expenses.”
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Recent Developments
During its consideration of the National Defense Authorization Act for FY2012 (P.L. 112-81), the
Senate adopted a provision to increase funding for the FAST program, including Mentoring
Networks, to $15 million “for each of FYs 2011 through 2016.”67 The Senate also adopted a
provision that would have required the SBA administrator to report annually to the Senate
Committee on Small Business and Entrepreneurship, the House Committee on Science and
Technology, and the House Committee on Small Business regarding (1) the number and amount
of awards provided and cooperative agreements entered into under the FAST program during the
prior year; (2) a list of funding recipients, including their locations and the activities performed
with the awards made, or under the cooperative agreements entered into; and (3) the Mentoring
Networks and mentoring database, including the status of the inclusion of mentoring information
in the database.68 These provisions were not included in the final version of the bill that became
law.
DOD Mentor-Protégé Program
Congress authorized a pilot mentor-protégé program for DOD in 1990
to provide incentives for major [DOD] contractors to furnish disadvantaged small business
concerns with assistance designed to enhance the capabilities of disadvantaged small
business concerns to perform as subcontractors and suppliers under [DOD] contracts and
other contracts and subcontracts in order to increase the participation of such business
concerns as subcontractors and suppliers under [DOD] contracts, other Federal Government
contracts, and commercial contracts.69
This program, which began on October 1, 1991, was the first federal mentor-protégé program to
become operational. Originally scheduled to expire in 1994,70 it has been repeatedly extended,
most recently through FY2015 for the formation of new agreements, and FY2018 for the
reimbursement of incurred costs under existing agreements.71 It differs from the SBA’s 8(a)
Mentor-Protégé Program in that its primary focus is upon small businesses performing
subcontracts and as suppliers on federal contracts, not upon small businesses performing federal
contracts. In addition, mentors in the DOD program may provide assistance to their protégés that
is somewhat different than that which mentors may provide to protégés in the 8(a) program.
Notably, such assistance may include advance payments, which federal agencies are generally

67 Engrossed Amendment Senate, H.R. 1540, §5201 (December 1, 2011).
68 Id.
69 An Act to Authorize Appropriations for Fiscal Year 1991 for Military Activities of the Department of Defense, for
Military Construction, and for Defense Activities of the Department of Energy, to Prescribe Personnel Strengths for the
Armed Forces and for Other Purposes, P.L. 101-510, §831, 104 Stat. 1607-08 (November 5, 1990) (codified, as
amended, at 10 U.S.C. §2302 note).
70 Id. at §831(j)(1), 104 Stat. 1610 (providing that firms eligible to participate in the program may enter mentor-protégé
agreements during the period commencing on October 1, 1991, and ending on September 30, 1994). Under this
provision, firms could incur costs for reimbursement through September 30, 1996, and could receive credit for
unreimbursed costs through September 30, 1999. Id. at §831(j)(2)-(3). See also U.S. General Accounting Office,
Defense Contracting: Interim Report on Mentor-Protégé Program for Small Disadvantaged Firms, GAO/NSIAD-92-
135, March 30, 1992, pp. 1-3, available at http://archive.gao.gov/d32t10/146376.pdf.
71 See, e.g., National Defense Authorization Act for FY2012, P.L. 112-81, §867,—Stat.—.
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prohibited from making, and progress payments, which are generally discouraged under federal
procurement law.72 Mentors may also (1) award subcontracts on a noncompetitive basis to their
protégés even if they are otherwise subject to “competition in subcontracting” requirements;73
(2) make investments in protégé firms in exchange for an ownership interest in the firm (not to
exceed 10% of the total ownership interest); (3) lend money; (4) provide assistance in general
business management, engineering and technical matters, etc.; and (5) arrange for Small Business
Development Centers, Procurement Technical Assistance Centers, Historically Black colleges and
universities, and minority institutions of higher education to provide assistance to their protégés.74
Regulations Governing the DOD Mentor-Protégé Program
Mentor firms are prime contractors with at least one active subcontracting plan negotiated as
required under Section 8(d) of the Small Business Act, or under the DOD Comprehensive
Subcontracting Test Program.75 Initially, only small businesses owned and controlled by socially
and economically disadvantaged individuals could qualify as protégés.76 However, the listing of
eligible protégés was later expanded77 to include (1) businesses owned and controlled by Indian
tribes or Alaska Native Corporations; (2) businesses owned and controlled by Native Hawaiian
Organizations; (3) qualified organizations employing the “severely disabled”; (4) women-owned
small businesses; (5) service-disabled veteran-owned small businesses; and (6) Historically
Underutilized Business Zone (HUBZone) small businesses.78 Mentors may generally rely in good
faith on their protégés’ written representations that they are eligible.79

72 Advance payments are payments made to a contractor before any costs have been incurred on a contract, while
progress payments are payments made during the performance of work, but before completion of the contract, on the
basis of either a percentage of completion of the work or the incurrence of costs. Advance payments are generally only
authorized when (1) the contractor gives adequate security; (2) the payments do not exceed the contract price; and (3)
the agency head or a designee determines that advance payment is in the public interest or facilitates the national
defense. See, e.g., 48 C.F.R. §32.402(b). Progress payments made on the basis of percentage of completion under
construction or architect-engineer contracts are considered invoice payments and are permissible. 48 C.F.R. §32.903.
Progress payments made on the basis of performance milestones are considered financing payments and are likewise
permissible. 48 C.F.R. Subpart 32.5. Any other progress payments based on costs are considered “unusual progress
payments” and may be used only when authorized in “exceptional cases.” See 48 C.F.R. §§501-1-501.2.
73 48 C.F.R. §52.244-5(a)-(b). Some contracts provide that the contractor “shall select subcontractors (including
suppliers) on a competitive basis to the maximum practicable extent consistent with the objectives and requirements of
the contract.” See generally 48 C.F.R. §44.204(c).
74 48 C.F.R. Ch. 2, Appendix I, I-106(d)(1)-(7).
75 48 C.F.R. §219.7102(a). Mentors may generally not be small businesses. See 48 C.F.R. Ch. 2, Appendix I, I-
102(a)(1).
76 See P.L. 101-510, §831(m)(2), 104 Stat. 1611.
77 See, e.g., An Act to Authorize Appropriations for Fiscal Year 2001 for Military Activities of the Department of
Defense, for Military Construction, and for Defense Activities of the Department of Energy, to Prescribe Personnel
Strengths for Such Fiscal Year for the Armed Forces, and for Other Purposes, P.L. 106-398, §807, 114 Stat. 1654A-208
(October 30, 2000).
78 48 C.F.R. §219.7102(b)(1)(i)-(vii).
79 48 C.F.R. Ch. 2, Appendix I, I-102(c).
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Under DOD regulations, mentors’ participation in the program must be approved by DOD.80
While protégés are selected by the mentor,81 the SBA or DOD may, at any time, determine that a
protégé is ineligible.82 Each mentor is allowed to have multiple protégés, but each protégé may
have only one mentor at any time.83 There were 74 active mentor-protégé agreements involving
43 mentors and 72 protégés as of April 30, 2012.84 Two mentors had five protégés (one mentor
had five protégés each with a single agreement and one mentor had four protégés each with a
single agreement and one protégé with two agreements), five mentors had three protégés, 11
mentors had two protégés (10 mentors had two protégés each with a single agreement and one
mentor had one protégé with two agreements), and 25 mentors had one protégé each with a single
agreement.85
“Socially and economically disadvantaged
Mentors and protégés are required, by
individuals,” for purposes of the DOD Mentor-
regulation, to enter into an agreement
Protégé Program
establishing a developmental assistance
Individuals who belong to one of the following racial or
program for the protégé.86 The agreement is to
ethnic groups, or who can prove that they are
include (1) the type(s) of assistance the mentor
personally socially disadvantaged, and who have a
will provide and how the protégé will benefit;
personal net worth of $750,000 or less may qualify as
(2) factors for assessing the protégé’s progress;
socially and economically disadvantaged without being
certified as such by SBA:
(3) an estimate of the dollar value and types of
subcontracts to be awarded to the protégé; (4) a
Black Americans; Hispanic Americans; Native Americans
program participation term that does not
(American Indians, Eskimos, Aleuts, or Native
Hawaiians); Asian Pacific Americans (persons with
exceed three years; (5) procedures whereby the
origins from Burma, Thailand, Malaysia, Indonesia,
mentor or protégé may withdraw from the
Singapore, Brunei, Japan, China [including Hong Kong],
program on 30 days’ advance notice; and (6)
Taiwan, Laos, Cambodia [Kampuchea], Vietnam, Korea,
procedures for the mentor firm to terminate the
The Philippines, U.S. Trust Territory of the Pacific
mentor-protégé agreement for cause.87 DOD
Islands [Republic of Palau], Republic of the Marshall
Islands, Federated States of Micronesia, the
generally requires that this agreement be
Commonwealth of the Northern Mariana Islands, Guam,
approved before the mentor incurs any costs.88
Samoa, Macao, Fiji, Tonga, Kiribati, Tuvalu, or Nauru);
The mentor firm is responsible for making
Subcontinent Asian Americans (persons with origins
semiannual reports on progress during the term
from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the
Maldives Islands, or Nepal); and members of other
of the agreement, while the protégé is required
groups designated from time to time by SBA.
to provide data on its progress at the end of
each fiscal year during the term of the
Source: 13 C.F.R. §124.1002
agreement, and for each of the two fiscal years

80 New mentor applications may be submitted to the Office of Small Business Programs (OSBP) of the cognizant
military service or defense agency (if concurrently submitting a reimbursable agreement), or to the DOD OSBP office
(prior to the submission of an agreement).
81 48 C.F.R. §219.7102(b)(3). Selection of protégé firms by mentor firms may not be protested other than as to the size
or disadvantaged status of the protégé. See 48 C.F.R. Ch. 2, Appendix I, I-104(b)-(c).
82 48 C.F.R. Ch. 2, Appendix I, I-102(d). When the protégé is determined to be ineligible, any assistance provided to
the protégé after the date of that determination may not be considered assistance furnished under the program.
83 48 C.F.R. Ch. 2, Appendix I, I-104(e).
84 U.S. Department of Defense, “Mentor-Protégé Program (MPP): Participants,” available at http://www.acq.osd.mil/
osbp/mentor_protege/.
85 Id.
86 48 C.F.R. Ch. 2, Appendix I, I-106.
87 48 C.F.R. Ch. 2, Appendix I, I-107.
88 48 C.F.R. Ch. 2, Appendix I, I-108.
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following the agreement’s expiration.89 In addition, the Defense Contract Management Agency
(DCMA) is to conduct annual performance reviews of all mentor-protégé agreements, and
determinations made in these reviews “should” be a major factor in determining the amount, if
any, of reimbursement the mentor firm is eligible to receive in the remaining years of the program
participation term under the agreement.90
Incentives for Mentors
Among the incentives that the DOD program provides for mentors are (1) reimbursement of
developmental assistance costs and (2) crediting of unreimbursed costs toward applicable
subcontracting goals.91 DOD and the mentor firm may agree that DOD will reimburse the mentor
for certain advance payments or progress payments made to assist protégé firms in performing a
subcontract or supplying goods or services under a contract.92 Alternatively, DOD may credit
toward the mentor’s subcontracting plan an amount equivalent to the amount of unreimbursed
assistance that the mentor provides to its protégé(s).93 For example, if a contractor provides
$10,000 in developmental assistance to its protégé, this $10,000 could count as if it were a
$10,000 subcontract awarded to a small business.
Recent Developments
The 112th Congress extended the DOD Mentor-Protégé Program through FY2015 for the
formation of new agreements, and FY2018 for the reimbursement of incurred costs under existing
agreements.94 Previously, in 2007, GAO conducted an analysis of this program. As part of its

89 48 C.F.R. Ch. 2, Appendix I, I-112.2(a) & (e).
90 48 C.F.R. §219.7106; 48 C.F.R. Ch. 2, Appendix I, I-113. The DCMA is an independent organization within DOD
that performs contract administration functions for DOD and other agencies.
91 48 C.F.R. §219.7102(d)(1)-(2); 48 C.F.R. §19.702(d). When a mentor receives credit toward its subcontracting goals
because of developmental assistance provided to its protégé, it is ineligible for monetary incentives for subcontracting
with small disadvantaged businesses. 48 C.F.R. §219.1203. Otherwise, under Subpart 19.12 of the Federal Acquisition
Regulation, agencies have authority to incorporate in their prime contracts “monetary incentives” for subcontracting
with small businesses owned and controlled by socially and economically disadvantaged individuals. Such incentives
reward prime contractors by paying them up to 10% of the amount by which their performance in subcontracting with
such businesses exceeds their targets for subcontracting with them. See 48 C.F.R. §§19.1201-19.1202-4. The Obama
Administration recently proposed relocating the regulations governing monetary incentives to Subpart 19.17 of the
Federal Acquisition Regulation. See Department of Defense, General Services Administration, and National
Aeronautics and Space Administration, “Federal Acquisition Regulation: Constitutionality of Federal Contracting
Programs for Minority-Owned and Other Small Businesses,” 76 Federal Register 55849, September 9, 2011.
92 48 C.F.R. §219.7103-2(b) & (f); 48 C.F.R. §252.232-7005. The amount of such payments generally may not exceed
$1 million per year. But see 48 C.F.R. Ch. 2, Appendix I, I-108(a)(6) (permitting developmental costs in excess of $1
million when a specific justification for such costs has been presented). When the mentor will be reimbursed for
developmental assistance provided to the protégé, the mentor must establish the accounting treatment of developmental
assistance costs before incurring such costs. 48 C.F.R. §218.7104(b). Additionally, under DOD regulations, the
subcontract between the mentor and protégé must include provisions substantially the same as the provisions in the
Federal Acquisition Regulation (FAR) regarding advance payments; the contractor must have administered the advance
payments in accordance with FAR Subpart 32.4; and the contractor must agree that any financial loss resulting from the
protégé’s failure or inability to repay any unliquidated advance payments is the sole financial responsibility of the
contractor. 48 C.F.R. §252.232-7005.
93 48 C.F.R. Ch. 2, Appendix I, I-110. Subcontracts awarded to certain current or former protégés also count toward
these goals. See 48 C.F.R. §252.219-7003(e)(1)-(2).
94 See National Defense Authorization Act for FY2012, P.L. 112-81, §867,—Stat.—.
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analysis, GAO administered a web-based survey of former DOD protégé firms and received
responses from 48 of the 76 protégé firms that completed or left the program during FY2004 and
FY2005. GAO concluded that most former protégé firms valued their experience in the DOD
program, with 93% of respondents reporting that their participation enhanced, at least to some
degree, their firm’s overall capabilities; 87% of respondents reporting that support from their
mentors helped their business development; and about 84% of respondents reporting that mentor
support helped their engineering or technical expertise.95 In addition, 71% of protégés responding
to the survey reported that they “were at least generally satisfied with their experience with the
program, with their reasons ranging from enhanced capabilities and heightened exposure in the
marketplace, to quantifiable business growth.”96 However, about 15% of protégés reported
dissatisfaction with their participation in the program, and about 21% reported that they did not
receive the level of mentoring that they had anticipated.97
DOD provided $237 million to mentor firms in FY2011 and anticipates providing $28 million to
mentor firms in FY2012.98
Other Agency-Specific Mentor-Protégé Programs
Other agencies, like the Department of Homeland Security (DHS), have established independent
mentor-protégé programs to encourage their large prime contractors to work with small business
subcontractors when performing agency contracts. Because these programs are not based in
statute, unlike the SBA and DOD programs discussed above, they generally rely upon existing
authorities (e.g., authorizing use of evaluation factors) or publicity to incentivize mentor
participation. Such programs generally supplement the 8(a) Mentor-Protégé Program, in that
firms in the 8(a) program may also participate in agency-specific programs.99 However, small
businesses that are not 8(a) firms and other entities may also be eligible to participate.100
DHS’s Mentor-Protégé Program is discussed here as a representative example of such programs.
Several other agencies have similar programs, which are described in Table 1.

95 U.S. Government Accountability Office, Contract Management: Protégés Value DOD’s Mentor-Protégé Program,
but Annual Reporting to Congress Needs Improvement
, GAO-07-151, January 31, 2007, p. 6, available at
http://www.gao.gov/new.items/d07151.pdf.
96 Id. at 7.
97 Id.
98 U.S. Department of Defense, Office of the Secretary of Defense, “Fiscal Year (FY) 2012 Budget Estimates,”
Washington, DC, February 2011, Exhibit P-40, Budget Item Justification Sheet, available at
http://comptroller.defense.gov/defbudget/fy2012/budget_justification/pdfs/02_Procurement/
OSD_PB12_PDW_Final.pdf.
99 See, e.g., 48 C.F.R. §519.7007(c) (“A protégé firm [in GSA’s Mentor-Protégé Program] must not have another
formal, active mentor-protégé relationship under GSA’s Mentor-Protégé Program but may have an active mentor-
protégé relationship under another agency’s program.”).
100 See, e.g., 48 C.F.R. §619.202-70 (small disadvantaged businesses; women-owned small businesses; Historically
Underutilized Business Zone small businesses; veteran-owned small businesses; and service-disabled veteran-owned
small businesses eligible for the Department of State Mentor-Protégé Program); 48 C.F.R. §919.7007 (8(a) firms and
other small disadvantaged businesses; Historically Black Colleges and Universities and other minority institutions of
higher education; women-owned small businesses; and service-disabled veteran-owned small businesses eligible for the
Department of Energy Mentor-Protégé Program).
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DHS Mentor-Protégé Program
DHS established its mentor-protégé program in 2003 to “motivate and encourage large business
prime contractor firms to provide mutually beneficial developmental assistance” to small
businesses.101 Mentor firms may provide various types of assistance to their protégés, including
temporary assignment of personnel to the protégé firm for the purpose of training, rent-free use of
facilities or equipment, overall business management/planning, financial and organizational
management, business development, technical assistance, property, loans, and other types of
assistance.102
There were 246 active DHS mentor-protégé agreements as of March 13, 2012, involving 192
mentors and 239 protégés.103 One mentor had five protégés, three mentors had four protégés, six
mentors had three protégés, 29 mentors had two protégés, and 153 mentors each had one
protégé.104 The DHS program does not receive a separate funding appropriation.
Regulations Governing the DHS Mentor-Protégé Program
Mentors are “large prime contractors capable of providing developmental assistance.”105 Protégé
firms can be small businesses, veteran-owned small businesses, service-disabled veteran-owned
small businesses, HUBZone small businesses, “small disadvantaged businesses,”106 and women-
owned small businesses.107 Although mentors and protégés apparently do not need to be approved
by DHS, they are required, by regulation, to have their mentor-protégé agreement approved by
the DHS Office of Small and Disadvantaged Business Utilization (OSDBU).108 This mentor-
protégé agreement is evaluated on the extent to which the mentor plans to provide developmental
assistance. If accepted into the program, the mentor-protégé relationship generally lasts for 36
months. The mentor and protégé are required to submit a jointly written mid-term progress report
at 18 months, and, at the end of the 36 months, the mentor and protégé are required to submit a
final report and complete a “lessons learned” evaluation separately. Protégés are also required to
submit a post-award report annually for two years.109

101 U.S. Department of Homeland Security, “Mentor-Protégé Program,” available at http://www.dhs.gov/xopnbiz/
smallbusiness/editorial_0716.shtm; U.S. Department of Homeland Security, “Department of Homeland Security
Acquisition Regulation,” 68 Federal Register 67868-67870, December 4, 2003.
102 U.S. Department of Homeland Security, “Mentor-Protégé Program,” available at http://www.dhs.gov/xopnbiz/
smallbusiness/editorial_0716.shtm.
103 U.S. Department of Homeland Security, “Mentor-Protégé Companies,” available at http://www.dhs.gov/xopnbiz/
smallbusiness/gc_1198248049694.shtm.
104 Id. Seven protégés had two mentors and 232 protégés had one mentor.
105 48 C.F.R. §3052.219-71(b)(1).
106 “Small disadvantaged businesses” (SDBs) are those owned and controlled by socially and economically
disadvantaged individuals. All 8(a) firms are SDBs. However, firms that are not participating in the 8(a) program may,
depending upon the program, also be certified or self-certify as SDBs. See generally CRS Report R40987,
“Disadvantaged” Small Businesses: Definitions and Designations for Purposes of Federal and Federally Funded
Contracting Programs
, by Kate M. Manuel.
107 48 C.F.R. §3052.219-71(b)(2).
108 48 C.F.R. §3052.219-71(b)(3).
109 U.S. Department of Homeland Security, “Mentor-Protégé Program Details,” available at http://www.dhs.gov/
xlibrary/assets/opnbiz/osdbu-mentor-protege-details.pdf.
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Incentives for Mentors
Participation as a mentor in the DHS Mentor-Protégé Program may serve as a source selection
factor or subfactor in certain negotiated procurements,110 potentially giving mentor firms an
advantage over non-mentors and, thereby, encouraging firms to become mentors. In addition,
mentors may credit costs incurred in providing assistance to their protégés toward their goals for
subcontracting with small businesses.111 Mentors are also eligible for an annual award presented
by DHS to the firm providing the most effective developmental support to a protégé.112
Table 1. Other Agencies with Agency-Specific Mentor-Protégé Programs
Agency
Eligible Protégés
Incentives for Mentors
Department of Energy
8(a) firms and other small disadvantaged
Eligibility for award fees based on their
businesses; Historically Black Col eges and
performance as mentors
48 C.F.R. Subpart
Universities and other minority institutions
919.70
of higher learning; women-owned smal
Subcontracts awarded to protégés count
businesses; service-disabled veteran-owned
toward subcontracting goals
small businesses
Department of Health
Small businesses; veteran-owned small
Certain assistance provided to protégés
and Human Services
businesses; service-disabled veteran-owned
credited toward subcontracting plans
small businesses; Historically Underutilized
48 C.F.R. §352.219-70
Business Zone (HUBZone) small
businesses; woman-owned smal businesses
Department of State
Small disadvantaged businesses; women-
Mentor-protégé agreement may be
owned small businesses; HUBZone small
considered in evaluating adequacy of
48 C.F.R. §619.202-70
businesses; veteran-owned smal businesses; proposed subcontracting plan and in
service-disabled veteran-owned smal
responsibility determinations
businesses
Agency mentoring award (non-monetary)
Department of the
Small businesses; women-owned small
Bonus (not to exceed 5% of the relative
Treasury
businesses; small disadvantaged businesses;
importance assigned to technical/
service-disabled veteran-owned smal
management factors) credited to mentor in
48 C.F.R. Subpart
businesses; HUBZone small businesses
negotiated procurements
1019.202-70
Mentor-protégé agreement may be
considered in evaluating adequacy of
proposed subcontracting plan and in
responsibility determinations

110 48 C.F.R. §3052.219-72.
111 48 C.F.R. §3052.219-71(d). (“For example, a mentor/large business prime contractor would report a $10,000
subcontract to the protégé/small business subcontractor and $5,000 of developmental assistance to the protégé/small
business subcontractor as $15,000.”)
112 U.S. Department of Homeland Security, “Mentor-Protégé Program Details,” available at http://www.dhs.gov/
xlibrary/assets/opnbiz/OSDBU_MentorProtegeDetails.pdf.
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Agency
Eligible Protégés
Incentives for Mentors
Department of
Veteran-owned small businesses; service-
Costs incurred in providing developmental
Veterans Affairs
disabled veteran-owned smal businesses
assistance to protégés may be considered in
determining indirect costs rates for
48 C.F.R. Subpart
reimbursement
819.71
Evaluation credits during source selection
Factor in evaluating past performance and
determining contractor responsibility
Agency mentoring award (non-monetary)
Invitation to mentor-protégé annual
conference
Environmental
Small disadvantaged businesses (women
Subcontracts of $1 million or less awarded to
Protection Agency
deemed to be socially disadvantaged)
protégés are exempt from the competition
requirements in 48 C.F.R. §44.202-2(a)(5),
48 C.F.R. §§1552.219-
52.244-2(b)(2)(i i), and 52.244-5
70 to 1552.219-71
Costs incurred in providing developmental
assistance to protégés may be considered in
determining indirect costs rates for
reimbursement
Federal Aviation
Small businesses; small socially and
Evaluation credits during source selection
Administration
economically disadvantaged businesses;
small disadvantaged businesses; service-
Subcontracts awarded to protégés count
FAA Mentor-Protégé
disabled veteran-owned smal businesses;
toward subcontracting goals
Program available at
Historically Black Col eges and Universities;
http://www.sbo.faa.gov/
Costs incurred in providing developmental
Minority Institutions; women-owned smal
MentorProtege.cfm
assistance to protégés may be considered in
businesses
determining indirect costs rates for
reimbursement
Procurements set aside for firms that are
“participants in the FAA Mentor-Protégé
Program”a
General Services
Small businesses; veteran-owned small
Costs incurred in providing developmental
Administration
businesses; service-disabled veteran-owned
assistance to protégés may be considered in
small businesses; Historically Underutilized
determining indirect costs rates for
48 C.F.R. Subpart
Business Zone (HUBZone) small
reimbursement
519.70
businesses; woman-owned smal businesses
Evaluation credits during source selection
Factor in evaluating past performance and
determining contractor responsibility
Agency mentoring award (non-monetary)
Invitation to mentor-protégé annual
conference
National Aeronautics
Small disadvantaged businesses; Historically
NASA contractor who is an approved DOD
and Space
Black Col eges and Universities; Minority
mentor can transfer credits to their NASA
Administration
Institutions
contracts
48 C.F.R. Subpart
Subcontracts to protégés may be awarded
1819.72
noncompetitively
May count costs of development assistance
provided to protégés toward subcontracting
plan
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Agency
Eligible Protégés
Incentives for Mentors
U.S. Agency for
Small businesses; veteran-owned small
Costs incurred in providing developmental
International
businesses; service-disabled veteran-owned
assistance to protégés may be considered in
Development
small businesses; Historically Underutilized
determining indirect costs rates for
Business Zone (HUBZone) small
reimbursement
48 C.F.R. Subpart
businesses; woman-owned smal businesses
719.273
Evaluation credits during source selection
Factor in evaluating past performance and
determining contractor responsibility
Agency mentoring award (non-monetary)
Invitation to mentor-protégé annual
conference
Source: Congressional Research Service, based on various sources cited in Table 1.
a. It is unclear whether “participant” here refers to mentors, protégés, or joint ventures involving mentors
and protégés. Because agencies general y may not restrict competition absent express statutory
authorization, such set-asides may be limited to small business protégés, as opposed to mentor firms. See
generally CRS Report R40516, Competition in Federal Contracting: An Overview of the Legal Requirements, by
Kate M. Manuel.
Mentor-Protégé Programs of DOT
Funding Recipients

Under Department of Transportation regulations, recipients of certain federal transportation
funding are authorized to establish mentor-protégé programs “in which another [disadvantaged
business enterprise (DBE)] or non-DBE firm is the principal source of business development
assistance to a DBE firm.”113 These programs are designed “to further the development of DBEs,
including but not limited to assisting them to move into non-traditional areas of work and/or
compete in the marketplace outside the DBE program, via the provision of training and
assistance.”114 For example, mentors in the Ohio Department of Transportation Mentor/Protégé
Program may assist protégés by (1) setting targets for improvement; (2) setting time tables for
meeting those targets; (3) assisting with the protégé’s business strategies; (4) assisting in
evaluating outcomes; (5) assisting in developing protégés’ business plans; (6) regularly reviewing
protégés’ business and action plans; and (7) monitoring protégés’ key business indicators,
including their cash flow, work in progress, and recent bids.115 Those in the Illinois Department of
Transportation Mentor-Protégé Program may similarly provide training and development,
technical and management assistance, personnel, financial assistance, and equipment to their
protégés.116

113 49 C.F.R. §26.35(b).
114 U.S. Department of Transportation, “DBE Final Rule, Appendix D to Part 26 - Mentor-Protégé Program
Guidelines,” available at http://www.osdbu.dot.gov/DBEProgram/final/final60.cfm. Recipients of DOT funding are
particularly encouraged to use mentor-protégé programs to assist DBEs in performing work outside of specific fields in
which DBEs are “overconcentrated.” 49 C.F.R. §26.33.
115 Ohio Department of Transportation Mentor/Protégé Program, p. 5 (copy on file with Kate M. Manuel).
116 Illinois Department of Transportation, Mentor-Protégé Program Sample Development Plan, available at
http://www.dot.state.il.us/obwd/Mentor%20Protege%20Sample%20Development%20Plan.pdf.
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According to DOT, data concerning the number and performance of DBE mentor-protégé
agreements are retained at the state level and are not reported to the DOT.117 The DOT program
does not receive a separate funding appropriation.
Regulations Governing DOT Mentor-Protégé Programs
DBEs may participate in DOT mentor-protégé
programs as either mentors or protégés. However,
“Disadvantaged business enterprises,” for
under DOT regulations, all DBEs involved in a
purposes of DOT funding programs
mentor-protégé agreement must be independent
Individuals who belong to one of the following
business entities that meet the requirements for
racial or ethnic groups, or who can prove that they
certification as a DBE. These regulations also
are personally socially disadvantaged, and who have
require that firms be certified before participating
a personal net worth of $1.32 million may qualify
in a mentor-protégé arrangement.118
as “disadvantaged business enterprises” upon
certification by a state funding recipient:
The relationship between mentor and protégé is
(i) "Black Americans," which includes persons
based on a written development plan, approved by
having origins in any of the Black racial groups of
Africa; (ii) "Hispanic Americans," which includes
the recipient of the DOT funding, “which clearly
persons of Mexican, Puerto Rican, Cuban,
sets forth the objectives of the parties and their
Dominican, Central or South American, or other
respective roles, the duration of the arrangement
Spanish or Portuguese culture or origin, regardless
and the services and resources to be provided by
of race; (iii) "Native Americans," which includes
persons who are American Indians, Eskimos,
the mentor to the protégé.”119 The formal mentor-
Aleuts, or Native Hawaiians; (iv) "Asian-Pacific
protégé agreement may establish a fee schedule to
Americans," which includes persons whose origins
cover the direct and indirect cost of services
are from Japan, China, Taiwan, Korea, Burma
provided by the mentor to the protégé.120 Services
(Myanmar), Vietnam, Laos, Cambodia
provided by the mentor may be reimbursable if
(Kampuchea), Thailand, Malaysia, Indonesia, the
Philippines, Brunei, Samoa, Guam, the U.S. Trust
these services and any associated costs are “directly
Territories of the Pacific Islands (Republic of
attributable and properly allowable.”121
Palau), the Commonwealth of the Northern
Marianas Islands, Macao, Fiji, Tonga, Kirbati,
[T]uvalu, Nauru, Federated States of Micronesia,
Participant Benefits
or Hong Kong; (v) "Subcontinent Asian
Americans," which includes persons whose origins
Mentor firms may generally count the amount of
are from India, Pakistan, Bangladesh, Bhutan, the
Maldives Islands, Nepal or Sri Lanka; (vi) Women;
assistance they provide to their protégés toward
(vii) [a]ny additional groups whose members are
their goals for contracting or subcontracting with
designated as socially and economically
DBEs. However, under DOT regulations, a non-
disadvantaged by the SBA, at such time as the SBA
DBE mentor firm cannot receive credit for meeting
designation becomes effective.
more than half of its goal on any contract by using
Source: 49 C.F.R. §26.5; 49 C.F.R. §26.67.
its own protégé.122 These regulations also prohibit a

117 U.S. Department of Transportation, Office of Small and Disadvantaged Business Utilization, telephone consultation,
March 1, 2011.
118 49 C.F.R. §26.35(b)(1).
119 49 C.F.R. Part 26, Appendix D, at (b)(1).
120 Id.
121 49 C.F.R. Part 26, Appendix D, at (b)(2).
122 49 C.F.R. §26.35(b)(2)(i).
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non-DBE mentor firm from receiving DBE credit for using its own protégé on more than every
other contract performed by the protégé.123 For example, if Mentor Firm X uses Protégé Firm Y to
perform a subcontract, Mentor Firm X cannot get DBE credit for using Protégé Firm Y on
another subcontract until Protégé Firm Y first works on an intervening prime contract or
subcontract with a different prime contractor.124 There are no comparable restrictions for other
mentor-protégé programs.
Concluding Observations
Congressional interest in small business mentor-protégé programs has increased in recent years
for a variety of reasons, including reports that these programs are being used by large businesses
to perform federal contracts, in violation of small business procurement laws and regulations and
contrary to the intent of the mentor-protégé programs.125 The SBA’s suspension (and later
reinstatement) of a mentor in the 8(a) Mentor-Protégé Program for fraud,126 as well as reports of
fraud in several of the SBA’s contracting programs, has also contributed to congressional
interest.127 In addition, GAO has found that the SBA “has not been able to properly oversee [the
8(a) mentor-protégé] program,”128 and the SBA recently issued new regulations for the 8(a)
program generally, and for the 8(a) Mentor-Protégé Program in particular, to better ensure that its
benefits “flow to the intended recipients” and “help prevent waste, fraud and abuse.”129 GAO has
also recommended that federal agencies collect and maintain protégé post-completion
information “to help ensure that small businesses are benefiting from participation in the
programs as intended.”130 Given all these developments, it seems likely that the 8(a) Mentor-
Protégé Program, along with other federal mentor-protégé programs, will remain subject to
congressional oversight or proposed legislation during the 112th Congress.
One option available to Congress as it carries out its oversight of these programs is to require
federal agencies to maintain and report annually to Congress outcome-based program
performance data, such as those that DOD has historically been required to report regarding its
mentor-protégé program. This includes (1) the number of mentor-protégé agreements that were
entered into during the fiscal year; (2) the number of mentor-protégé agreements that were in
effect during the fiscal year; (3) the total amount reimbursed to mentor firms during the fiscal
year; (4) each mentor-protégé agreement, if any, that was approved during the fiscal year that

123 49 C.F.R. §26.35(b)(2)(ii).
124 U.S. Department of Transportation, “DBE Final Rule, Section 26.35 - What Role do Business Development and
Mentor-Protégé Programs Have in the DBE Program?” available at http://www.osdbu.dot.gov/DBEProgram/final/
final19.cfm.
125 For more on the 8(a) Program, see generally CRS Report R40744, The “8(a) Program” for Small Businesses Owned
and Controlled by the Socially and Economically Disadvantaged: Legal Requirements and Issues
, by Kate M. Manuel
and John R. Luckey.
126 Id.
127 Id.
128 Id. at 24.
129 U.S. Small Business Administration, “Final Regulations Will Strengthen 8(a) Business Development Program for
Small Businesses,” Washington, DC, February 11, 2011, available at http://www.sba.gov/content/final-regulations-
will-strengthen-8a-business-development-program-small-businesses.
130 U.S. Government Accountability Office, Mentor-Protégé Programs Have Policies That Aim to Benefit Participants
But Do Not Require Postagreement Tracking
, GAO-11-548R, June 15, 2011, p. 9, available at http://www.gao.gov/
new.items/d11548r.pdf.
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provided a program participation term in excess of three years, together with the justification for
the approval; (5) each reimbursement of a mentor firm in excess of the program’s limits that was
made during the fiscal year, together with the justification for the approval; and (6) trends in the
progress made in employment, revenues, and participation in agency contracts by protégé firms
participating in the program during the fiscal year and protégé firms that completed or otherwise
terminated participation in the program during the preceding two fiscal years.131 Data of a similar
nature could potentially assist Congress in its assessment of federal agency small business
mentor-protégé programs.


131 See, e.g., National Defense Authorization Act for Fiscal Year 2000, P.L. 106-65, §811, 113 Stat. 706-10 (October 5,
1999).
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Appendix. Comparison of Selected Agencies’ Mentor-Protégé Programs
Table A-1. Tabular Comparison of Selected Agencies’ Mentor-Protégé Programs
SBA
8(a)
DOD
DHS
DOT
Primary focus
Contracts
Subcontracts; suppliers
Subcontracts
Federal y funded contracts
Eligible mentors
Large firms; small firms; 8(a)
Prime contractors with at least one active
Large prime contractors
Another disadvantaged business
graduates; other 8(a) firms in the
subcontracting plan (smal businesses
enterprise (DBE) or a non-DBE
transitional stage
generally ineligible)
firm
Eligible protégés
Small disadvantaged businesses
Small disadvantaged businesses; businesses
Smal businesses; veteran-owned
Small disadvantaged businesses;
participating in the 8(a) Program
owned and controlled by Indian tribes,
small businesses; service-disabled
women-owned smal businesses
Alaska Native Corporations or Native
veteran-owned small businesses;
Hawaiian Organizations; qualified
HUBZone small businesses, small
organizations employing the “severely
disadvantaged businesses; women-
disabled;” women-owned smal businesses;
owned small businesses
service-disabled veteran-owned smal
businesses; HUBZone small businesses
Notable types of
Assistance in performing prime
Advance and progress payments
Rent-free use of facilities or
Varies by program, but can include:
assistance
contracts with the government in
equipment; property
training and development; technical
the form of joint ventures
Award of subcontracts on a
and management assistance;
noncompetitive basis
Temporary assignment of
personnel; financial assistance; and
Financial assistance in the form of
personnel to protégé for training
equipment
equity investments or loans
Investments in protégé firm in exchange for
ownership interests
Financial and organizational
Subcontracts
management
Loans
Technical or management
Overall business management,
assistance
Assistance in general business management,
planning, and development
engineering and technical matters, etc.
Technical assistance
Incentives for
Assistance counts toward
Reimbursement of certain developmental
Participation in mentor-protégé
Can generally count the amount of
mentor firms
subcontracting goals
assistance costs
program can serve as an evaluation
assistance provided to protégés
factor in negotiated procurements
toward goals for contracting or
Can form joint venture with
Unreimbursed development costs credited
subcontracting with DBEs
protégé that may be eligible to
toward subcontracting goals
Costs incurred in providing
receive 8(a) and other small
assistance to protégé count toward
Certain assistance costs may be
business contracts
Can award subcontracts on a
subcontracting goals
reimbursed
noncompetitive basis to the protégé
May acquire ownership interest of
Agency award for best mentor
up to 40% in protégé firm
Source: Congressional Research Service, based on various sources cited in this report.

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Author Contact Information

Robert Jay Dilger
Kate M. Manuel
Senior Specialist in American National Government
Legislative Attorney
rdilger@crs.loc.gov, 7-3110
kmanuel@crs.loc.gov, 7-4477


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