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Small Business Mentor-Protégé Programs
Robert Jay Dilger
Senior Specialist in American National Government
March 2, 2015
Congressional Research Service
7-5700
www.crs.gov
R41722

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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 to assist 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. In addition, during the 111th
Congress, 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,
small businesses owned and controlled by women, and small businesses located in a HUBZone.
During the 112th Congress, P.L. 112-239, the National Defense Authorization Act for Fiscal Year
2013, authorized the SBA to establish a mentor-protégé program for all small businesses, and
generally prohibits agencies from carrying out mentor-protégé programs that have not been
approved by the SBA. Based on the authority provided by these two laws, the SBA published a
proposed rule in the Federal Register on February 5, 2015, “to establish a government-wide
mentor-protégé program for all small business concerns, consistent with the SBA’s mentor-
protégé program for participants in the SBA’s 8(a) Business Development program.”
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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
GAO’s Reports, SBA Regulations, and Recent Legislative Action .................................... 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.................................................... 13
Incentives for Mentors ............................................................................................................. 14
Recent Developments .............................................................................................................. 15
Other Agency-Specific Mentor-Protégé Programs ........................................................................ 16
DHS Mentor-Protégé Program ................................................................................................ 16
Regulations Governing the DHS Mentor-Protégé Program .............................................. 17
Incentives for Mentors ...................................................................................................... 17
Mentor-Protégé Programs of DOT Funding Recipients ................................................................ 20
Regulations Governing DOT Mentor-Protégé Programs ........................................................ 21
Participant Benefits ................................................................................................................. 21
Concluding Observations ............................................................................................................... 21

Tables
Table 1. Other Agencies with Agency-Specific Mentor-Protégé Programs ................................... 18
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
Acknowledgments ......................................................................................................................... 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 Small Business
Administration (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., SBA, “Statement from
Administrator Mills on the Suspension of GTSI from Federal Contracting Program,” October 1, 2010, at
https://www.sba.gov/content/statement-administrator-mills-suspension-gtsi-federal-contracting-program; and SBA,
“Administrative Agreement, between GTSI Corp. (“GTSI”) and the United States Small Business Administration
(“SBA”),” October 19, 2010, at https://www.sba.gov/content/gtsi-administrative-agreement-10-19-2010. Also see U.S.
Government Accountability Office (GAO), Small Business Administration: Undercover Tests Show HUBZone
Program Remains Vulnerable to Fraud and Abuse
, GAO-10-920T, July 28, 2010, pp. 2-4, at http://www.gao.gov/
new.items/d10920t.pdf; GAO, 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, at http://www.gao.gov/new.items/d10425.pdf; GAO,
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, at http://www.gao.gov/
new.items/d10108.pdf.
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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.
During the 111th Congress, 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, small businesses owned and controlled by women, and small businesses
located in a HUBZone “modeled” on the 8(a) Mentor-Protégé Program.3 P.L. 111-240 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
During the 112th Congress, P.L. 112-239, the National Defense Authorization Act for Fiscal Year
2013, authorized the SBA to establish a mentor-protégé program for “all” small businesses that is
generally “identical” to the 8(a) Mentor-Protégé Program, and, with some exceptions, prohibits
agencies from carrying out mentor-protégé programs that have not been approved by the SBA.6
Based on the authority provided by these two laws, the SBA published a proposed rule in the
Federal Register on February 5, 2015, “to establish a government-wide mentor-protégé program
for all small business concerns, consistent with SBA’s mentor-protégé program for participants in
the SBA’s 8(a) Business Development program in order to make the mentor-protégé rules for
each of the programs as consistent as possible.”7 The SBA decided that it would not implement
additional mentor-protégé programs for service-disabled veteran-owned and -controlled small
businesses, women-owned and -controlled small businesses, and HUBZone small businesses
because they “would be necessarily included within any mentor-protégé program targeting all
small business concerns.”8 The SBA also announced that “having five separate small business
mentor-protégé programs could become confusing to the public and procuring agencies and hard
to implement by the SBA.”9

3 SBA, “Small Business Jobs Act: Small Business Mentor-Protégé Programs,” 75 Federal Register 79869, December
20, 2010; SBA, “Semiannual Regulatory Agenda, Small Business Jobs Act: Small Business Mentor-Protégé
Programs,” 76 Federal Register 40140, July 7, 2011; SBA, “Small Business Jobs Act: Small Business Mentor-Protégé
Programs,” 78 Federal Register 1492, January 8, 2013; SBA, “Small Business Mentor-Protégé Programs,” 78 Federal
Register
44334, July 23, 2013; and SBA, “Small Business Mentor-Protégé Programs,” 79 Federal Register 1089,
January 7, 2014.
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, 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.
6 The Senate version of the bill (S. 3254) did not include these provisions, but the conference report to H.R. 4310,
which was agreed to by the House on December 20, 2012, and by the Senate on December 21, 2012, included them.
The program under P.L. 112-239 need not be identical to the 8(a) Mentor-Protégé Program insofar as differences may
be “necessary” given the types of small businesses included in the program as protégés.
7 SBA, “Small Business Mentor Protégé Program; Small Business Size Regulations; Government Contracting
Programs; 8(a) Business Development/Small Disadvantaged Business Status Determinations; HUBZone Program;
Women-Owned Small Business Federal Contract Program; Rules of Procedure Governing Cases Before the Office of
Hearings and Appeals,” 80 Federal Register 6618, February 5, 2015.
8 Ibid., pp. 6618-6619.
9 Ibid., p. 6619.
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The SBA estimates that approximately 2,000 small businesses could become active in the
proposed mentor-protégé program for small businesses.10
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.
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) program11 and the other for firms in its Small Business Innovation Research (SBIR) and
Small Business Technology Transfer (STTR) programs.12
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.13 The SBA implemented this direction, in part, by
establishing a mentor-protégé program on July 30, 1998,14 wherein mentors “enhance the
capabilities” of 8(a) firms and “improve [their] ability to successfully compete for contracts”15 by
providing various forms of assistance. Such assistance may include
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 through joint venture agreements.16
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

10 Ibid., p. 6628.
11 For additional information and analysis concerning the 8(a) program, see 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.
12 For additional information and analysis concerning the Small Business Innovation Research (SBIR) and Small
Business Technology Transfer (STTR) programs, see CRS Report R43695, Small Business Innovation Research and
Small Business Technology Transfer Programs
, by John F. Sargent Jr.
13 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)).
14 SBA, “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.
15 13 C.F.R. §124.520(a). See also GAO, Small Business: SBA Could Better Focus Its 8(a) Program to Help Firms
Obtain Contracts
, GAO/RCED-00-196, July 20, 2000, p. 14, at http://www.gao.gov/new.items/rc00196.pdf.
16 13 C.F.R. §124.520(a).
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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.17 In fact, when agencies that do not have
their own mentor-protégé programs, like those
“Socially and economically disadvantaged
individuals,” for purposes of the 8(a) Program

discussed below, are involved, the 8(a) Mentor-
Protégé Program may be referred to as if it were
Individuals who belong to one of the fol owing racial
or ethnic groups, or who can prove that they are
that agency’s program.18
personally socially disadvantaged, and who have a
personal net worth of $250,000 or less at the time of
SBA’s 8(a) Mentor-Protégé Program is
application to the program ($750,000 for continuing
administered by the SBA’s Office of Business
eligibility) may be approved by the SBA to participate
Development. This makes it somewhat different
in the 8(a) program for up to nine years:
from the agency-specific mentor-protégé
Black Americans; Hispanic Americans; Native
programs, discussed later, which generally are
Americans (American Indians, Eskimos, Aleuts, or
the responsibility of the agency’s Office of
Native Hawaiians); Asian Pacific Americans (persons
with origins from Burma, Thailand, Malaysia, Indonesia,
Small and Disadvantaged Business Utilization
Singapore, Brunei, Japan, China (including Hong Kong),
(OSDBU), and may involve coordination with
Taiwan, Laos, Cambodia (Kampuchea), Vietnam,
agency contracting offices.19
Korea, The Philippines, U.S. Trust Territory of the
Pacific Islands (Republic of Palau), Republic of the
As of September 30, 2013, there were 484 active
Marshall Islands, Federated States of Micronesia, the
Commonwealth of the Northern Mariana Islands,
8(a) mentor-protégé agreements in place,
Guam, Samoa, Macao, Fiji, Tonga, Kiribati, Tuvalu, or
including 95 that had been approved during
Nauru); Subcontinent Asian Americans (persons with
FY2013.20
origins from India, Pakistan, Bangladesh, Sri Lanka,
Bhutan, the Maldives Islands, or Nepal); and members
of other groups designated from time to time by SBA.
Regulations Governing the 8(a)
Source: 13 C.F.R. §§124.103-124.104
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
concern or non-profit entity that demonstrates a commitment and the ability to assist developing

17 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., SBA, “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. See SBA, “Small Business Size
Regulations; 8(a) Business Development/Small Disadvantaged Business Status Determinations,” 76 Federal Register
8222-8223, February 11, 2011.
18 See, e.g., Listing of Mentor Protégé Programs, 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.
19 GAO, Mentor-Protégé Programs Have Policies That Aim to Benefit Participants But Do Not Require Postagreement
Tracking
, GAO-11-548R, June 15, 2011, p. 3, at http://www.gao.gov/new.items/d11548r.pdf.
20 SBA, “FY2015 Congressional Budget Justification and FY2013 Annual Performance Report,” pp. 78-79, at
https://www.sba.gov/sites/default/files/files/
FY%202015%20CBJ%20FY%202013%20APR%20FINAL%20508(1).pdf.
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8(a) Participants may act as a mentor,” including large firms, other small businesses, 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 8(a) program.21 Only firms approved by the SBA may serve as mentors, and
SBA regulations require that mentors (1) possess “favorable financial health”;22 (2) possess “good
character”;23 (3) not be debarred or suspended from government contracting; and (4) be able to
“impart value to a protégé firm due to lessons learned and practical experienced gained because
of the [8(a) program], or through its knowledge of general business operations and government
contracting.”24 Protégés, in turn, are required by SBA regulations to be small businesses “owned
and controlled by socially and economically disadvantaged individuals” that are in good standing
in the 8(a) program.
In addition, under these regulations, to initially qualify as a protégé, a firm must (1) be in the
“developmental stage,” or the first four years of the program; (2) have never received an 8(a)
contract; or (3) have a size that is less than half the size standard corresponding to their primary
North American Industry code.25 Initially, mentors could only have one protégé, and protégés
could have only one mentor.26 However, these restrictions were removed effective March 14,
2011,27 and SBA’s regulations now provide that mentors may have more than one protégé, and
protégés may have more than one mentor, under certain circumstances, with the SBA’s
approval.28
The SBA requires that mentors and protégés enter a written agreement, approved by the SBA’s
Associate Administrator for Business Development, which sets forth the protégé’s needs and
describes the assistance the mentor will provide.29 This agreement generally obligates the mentor

21 13 C.F.R. §124.520(b).
22 Until recently, SBA regulations required that prospective mentors submit their federal tax returns for the past two
years to the SBA for review to demonstrate their “favorable financial health.” 13 C.F.R. §124.520(b)(3) (2010).
However, this requirement changed effective March 14, 2011, to authorize the submission of audited financial
statements and Securities and Exchange Commission filings, as well as tax returns. See SBA, “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 good character and a favorable financial position. 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(c)(1)(i)-(iii). The SBA has proposed to eliminate these three restrictions from the 8(a) Mentor-
Protégé Program and replace them with a requirement that firms “demonstrate how the business development
assistance to be received through its mentor-protégé relationship would advance the goals and objectives set forth in its
business plan.” See SBA, “Small Business Mentor Protégé Program; Small Business Size Regulations; Government
Contracting Programs; 8(a) Business Development/Small Disadvantaged Business Status Determinations; HUBZone
Program; Women-Owned Small Business Federal Contract Program; Rules of Procedure Governing Cases Before the
Office of Hearings and Appeals,” 80 Federal Register 6621-6622, February 5, 2015.
26 13 C.F.R. §124.520(b)(2) & (c)(3) (2010).
27 See SBA, “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.
28 13 C.F.R. §124.520(b)(2) & (c)(3).
29 13 C.F.R. §124.520(e)(1). Pursuant to these regulations, 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 merely a vehicle to enable a non-8(a) firm to receive 8(a) contracts. 13 C.F.R.
§124.520(e)(2). The regulations also provide that the SBA must approve all changes to the agreement in advance. 13
C.F.R. §124.520(e)(5).
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to furnish assistance to the protégé for at least one year,30 although it does allow either mentor or
protégé to terminate the agreement with 30 days’ advance notice to the other party and the SBA.31
In addition, the agreement provides that the SBA will review the mentor-protégé agreement
annually to determine whether to approve its continuation.32 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.33
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.34 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.”35 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.36 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.37 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.38
Because mentor firms are not 8(a) participants, they would generally be prohibited from owning
more than 10%-20% of an 8(a) firm.39 However, their participation in the 8(a) Mentor-Protégé
Program permits them to acquire a larger ownership share.
Protégés not only receive various forms of assistance from their mentors, but also may generally
retain their status as “small businesses” while doing so.40 If they received similar assistance from

30 13 C.F.R. §124.520(e)(1)(iii).
31 13 C.F.R. §124.520(e)(3).
32 13 C.F.R. §124.520(e)(4).
33 13 C.F.R. §124.112(b)(6); 13 C.F.R. §124.520(g)(1)(i)-(v).
34 13 C.F.R. §125.3(b)(3)(ix).
35 15 U.S.C. §637(d)(3)(A).
36 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, in the
case of sole-source 8(a) procurements, has not “reached the dollar limit set forth in §124.519.” 13 C.F.R.
§124.520(d)(1). Section 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.
37 See generally 13 C.F.R. §121.103.
38 13 C.F.R. §124.520(d)(2).
39 13 C.F.R. §124.105(h)(1)-(2). 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.” Ibid. The developmental stage consists of the first four
years of the 8(a) program, while the transitional stage consists of the last five years.
40 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
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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,41 and the
SBA could potentially find that firms are affiliates because of assistance such as that which
mentors provide to protégés.42 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.”43
GAO’s Reports, SBA Regulations, and Recent Legislative Action
The 8(a) Mentor-Protégé Program has been the subject of congressional and agency attention for
a number of reasons, including reports of fraud in the program.44 In addition, in 2010, 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,”45 and concluded that
the “SBA has not been able to properly oversee this program.”46
Legislation adopted during the 111th Congress (P.L. 111-240) 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.47 The study’s purpose was “to
determine whether the programs and relationships are effectively supporting the goal of
increasing the participation of small business concerns in government contracting.”48 GAO’s
report was submitted to the House and Senate Committees on Small Business on June 15, 2011.49
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 most federal mentor-
protégé programs had “similar policies and procedures,” but that some differences exist.50 For
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

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mentor because it receives assistance from its mentor under the mentor-protégé program, “[a]ffiliation may be found …
for other reasons”).
41 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).
42 See generally 13 C.F.R. §121.103.
43 13 C.F.R. §124.520(d)(4).
44 For additional information and analysis of the 8(a) program, see 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.
45 GAO, 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, at
http://www.gao.gov/new.items/d10353.pdf.
46 Ibid., p. 24.
47 P.L. 111-240, §1345(a), 124 Stat. 2546.
48 Ibid.
49 See GAO, Mentor-Protégé Programs Have Policies That Aim to Benefit Participants But Do Not Require
Postagreement Tracking
, GAO-11-548R, June 15, 2011, p. 1, at http://www.gao.gov/new.items/d11548r.pdf.
50 Ibid., p. 4.
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receiving appropriated funding.”51 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.”52 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.”53 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.”54
Prior to the release of GAO’s report, the SBA announced, on February 11, 2011, revisions to 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

51 Ibid., pp. 4-5.
52 Ibid., p. 9.
53 Ibid.
54 Ibid.
55 SBA, “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.
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The SBA also 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
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
In addition, as mentioned previously, based on authority provided by P.L. 111-240 and P.L. 112-
239, the SBA published a proposed rule in the Federal Register, on February 5, 2015, to establish
an additional mentor-protégé program for all small businesses “modeled on” the 8(a) Mentor-
Protégé Program. The proposed rule would also make some changes to the 8(a) Mentor-Protégé
Program “in order to make the mentor-protégé rules for each of the programs as consistent as
possible.”62 For example, the proposed rule would “amend the current joint venture provisions to
clarify the conditions for creating and operating joint venture partnerships.”63 The proposed rule
would also eliminate the requirement that protégés have a size that is less than half the size
standard corresponding to its primary NAICS code, or be in the developmental stage of its 8(a)
program participation, or not have received an 8(a) contract.64
P.L. 112-239 also seeks to reduce the variation that GAO found among agency-specific mentor-
protégé programs by requiring that any such programs be approved by the SBA pursuant to
regulations, “which shall ensure that such programs improve the ability of protégés to compete
for Federal prime contracts and subcontracts.”65 The SBA administrator is required to issue

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57 SBA, “Small Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status
Determinations,” 76 Federal Register 8244-8247, February 11, 2011.
58 Ibid., p. 8243.
59 Ibid., pp. 8242-8243. 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.
60 Ibid., p. 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.
61 See CRS Report R40855, Contracting Programs for Alaska Native Corporations: Historical Development and Legal
Authorities
, by Kate M. Manuel and Jane M. Smith.
62 SBA, “Small Business Mentor Protégé Program; Small Business Size Regulations; Government Contracting
Programs; 8(a) Business Development/Small Disadvantaged Business Status Determinations; HUBZone Program;
Women-Owned Small Business Federal Contract Program; Rules of Procedure Governing Cases Before the Office of
Hearings and Appeals,” 80 Federal Register 6618-6622, February 5, 2015.
63 Ibid., p. 6618.
64 Ibid., p. 6621.
65 Any federal mentor-protégé program in effect at the date of the bill’s enactment must submit plans to the SBA for
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regulations with respect to mentor-protégé programs not later than 270 days after the bill’s
enactment, which was January 2, 2013. At a minimum, these regulations must address 10 criteria,
including (1) eligibility for program participants, (2) the types of developmental assistance
provided to protégés, (3) the length of mentor-protégé relationships, (4) the benefits that may
accrue to the mentor as a result of program participation, and (5) the reporting requirements
during and following program participation.66 DOD’s Mentor-Protégé Program and mentoring
assistance under the Small Business Innovation Research Program and the Small Business
Technology Transfer Program are exempt from the approval process. To date, the SBA has not
issued new regulations with respect to mentor-protégé programs in other federal agencies.
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”67 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.68
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.69

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approval within 6 months of the SBA’s promulgation of rules with respect to mentor-protégé programs and receive
final approval or denial within 180 days after receipt. In addition, DOD’s Mentor-Protégé Program and mentoring
assistance under the Small Business Innovation Research Program and the Small Business Technology Transfer
Program were made exempt from the approval process.
66 These provisions originated with H.R. 3985, the Building Better Business Partnerships Act of 2012. The Senate
version of the bill (S. 3254) did not include these provisions, but they were included in the bill’s conference report,
which was agreed to by the House on December 20, 2012, and by the Senate on December 21, 2012. The bill was
signed by President Obama on January 2, 2013.
67 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)).
68 15 U.S.C. §657d(c)(1)(E)(ii).
69 15 U.S.C. §657e(c)(1)-(5).
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In FY2014, the SBA awarded FAST partnership awards of over $90,000 each to 22 state and local
economic development agencies, business development centers, and colleges and universities.70
The program has received an appropriation of $2 million each fiscal year since FY2010.71
Recent Developments
During its consideration of P.L. 112-81, the National Defense Authorization Act for FY2012, 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.”72 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.73 However, 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.74
This program, which began on October 1, 1991, was the first federal mentor-protégé program to
become operational. Originally scheduled to expire in 1994,75 it has been repeatedly extended,

70 SBA, “SBA Awards $2 Million in FAST Grants to 22 Universities & Organizations To Support R&D, Small
Business Innovation,” June 26, 2014, at https://www.sba.gov/content/sba-awards-2-million-fast-grants-22-universities-
organizations-support-rd-small-business.
71 P.L. 111-117; P.L. 112-8; P.L. 112-74, “Small Business Administration”—“Salaries and Expenses”; P.L. 112-175;
P.L. 113-76; and P.L. 113-235.
72 Engrossed Amendment Senate, H.R. 1540, §5201 (December 1, 2011).
73 Ibid.
74 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).
75 Ibid. 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. Ibid. 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, at http://www.gao.gov/assets/220/215849.pdf.
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most recently through FY2015 for the formation of new agreements, and FY2018 for the
reimbursement of incurred costs under existing agreements.76
DOD’s mentor-protégé program 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 prohibited from making, and progress
payments, which are generally discouraged under federal procurement law.77 Mentors may also
(1) award subcontracts on a noncompetitive basis to their protégés even if they are otherwise
subject to “competition in subcontracting” requirements;78 (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.79

76 See, e.g., National Defense Authorization Act for FY2012, P.L. 112-81, §867, 125 Stat. 1526.
77 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)-(c). Progress payments made on the basis of percentage of completion under
construction or certain other contracts are considered invoice payments and are permissible. See 48 C.F.R. §32.500(b).
Progress payments made on the basis of performance milestones are considered financing payments and are likewise
permissible. Other progress payments based on costs are generally considered “unusual progress payments” and may be
used only when authorized in “exceptional cases.” See 48 C.F.R. §§32.501, 32.501-2.
78 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).
79 48 C.F.R. Ch. 2, Appendix I, I-106(d)(1)-(7).
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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.80 Initially, only
small businesses owned and controlled by
“Socially and economically disadvantaged
individuals,” for purposes of the DOD Mentor-

socially and economically disadvantaged
Protégé Program
individuals could qualify as protégés.81
However, the listing of eligible protégés was
Individuals who belong to one of the following racial or
ethnic groups, or who can prove that they are
later expanded82 to include (1) businesses
personally socially disadvantaged, and who have a
owned and controlled by Indian tribes or
personal net worth of $750,000 or less may qualify as
Alaska Native Corporations; (2) businesses
socially and economically disadvantaged without being
owned and controlled by Native Hawaiian
certified as such by SBA:
Organizations; (3) qualified organizations
Black Americans; Hispanic Americans; Native Americans
employing the “severely disabled”; (4) women-
(American Indians, Eskimos, Aleuts, or Native
owned small businesses; (5) service-disabled
Hawaiians); Asian Pacific Americans (persons with
origins from Burma, Thailand, Malaysia, Indonesia,
veteran-owned small businesses; and (6)
Singapore, Brunei, Japan, China [including Hong Kong],
Historically Underutilized Business Zone
Taiwan, Laos, Cambodia [Kampuchea], Vietnam, Korea,
(HUBZone) small businesses.83 Mentors may
The Philippines, U.S. Trust Territory of the Pacific
generally rely in good faith on their protégés’
Islands [Republic of Palau], Republic of the Marshall
written representations that they are eligible.84
Islands, Federated States of Micronesia, the
Commonwealth of the Northern Mariana Islands, Guam,
Samoa, Macao, Fiji, Tonga, Kiribati, Tuvalu, or Nauru);
Under DOD regulations, mentors’ participation
Subcontinent Asian Americans (persons with origins
in the program must be approved by DOD.85
from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the
While protégés are selected by the mentor,86
Maldives Islands, or Nepal); and members of other
the SBA may, at any time, determine that a
groups designated from time to time by SBA.
protégé is ineligible.87 Each mentor is allowed
Source: 13 C.F.R. §124.1002
to have multiple protégés, but each protégé
may have only one mentor at any time.88 There were 65 active mentor-protégé agreements
involving 43 mentors and 64 protégés as of February 15, 2015.89 One mentor had five protégés,

80 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).
81 See P.L. 101-510, §831(m)(2), 104 Stat. 1611.
82 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).
83 48 C.F.R. §219.7102(b)(1)(i)-(vii).
84 48 C.F.R. Ch. 2, Appendix I, I-102(c).
85 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).
86 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).
87 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.
88 48 C.F.R. Ch. 2, Appendix I, I-104(e).
89 U.S. Department of Defense, “Mentor-Protégé Program (MPP): Participants,” at http://www.acq.osd.mil/osbp/sb/
programs/mpp/participants/active_agreements.shtml.
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one mentor had four protégés, 3 mentors had three protégés, 10 mentors had two protégés, and 27
mentors had one protégé.90
Mentors and protégés are required, by regulation, to enter into an agreement establishing a
developmental assistance program for the protégé.91 The agreement is to include (1) the type(s) of
assistance the mentor will provide and how the protégé will benefit; (2) factors for assessing the
protégé’s progress; (3) an estimate of the dollar value and types of subcontracts to be awarded to
the protégé; (4) a program participation term that does not exceed three years; (5) procedures
whereby the mentor or protégé may withdraw from the program on 30 days’ advance notice; and
(6) procedures for the mentor firm to terminate the mentor-protégé agreement for cause.92 DOD
generally requires that this agreement be approved before the mentor incurs any costs.93 The
mentor firm is responsible for making semiannual reports on progress during the term of the
agreement, while the protégé is required to provide data on its progress at the end of each fiscal
year during the term of the agreement, and for each of the two fiscal years following the
agreement’s expiration.94 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.95
Incentives for Mentors
Among the incentives that the DOD program provides for mentors are (1) reimbursement of
developmental assistance costs and (2) credit for unreimbursed costs toward applicable
subcontracting goals.96 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.97 Alternatively, DOD may credit

90 Ibid.
91 48 C.F.R. Ch. 2, Appendix I, I-106.
92 48 C.F.R. Ch. 2, Appendix I, I-107.
93 48 C.F.R. Ch. 2, Appendix I, I-108(c).
94 48 C.F.R. Ch. 2, Appendix I, I-112.2(a) & (e).
95 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.
96 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. On September
9, 2011, the Obama Administration 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. However, no such change has been made to date.
97 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
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toward the mentor’s subcontracting plan an amount equivalent to the amount of unreimbursed
assistance that the mentor provides to its protégé(s).98 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.99 Previously, in 2007, GAO conducted an analysis of this program. As part of its
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.100 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.”101 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.102
DOD has provided $328.3 million to mentor firms since the program’s inception through
FY2014. The DOD provided $19.7 million to mentor firms in FY2014, and anticipates providing
$26.2 million in FY2015, and $30.1 million in FY2016.103

(...continued)
assistance costs before incurring such costs. 48 C.F.R. §219.7104(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.
98 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).
99 See National Defense Authorization Act for FY2012, P.L. 112-81, §867, 125 Stat.1526.
100 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, at http://www.gao.gov/
new.items/d07151.pdf.
101 Ibid, p. 7.
102 Ibid.
103 U.S. Department of Defense, Office of the Secretary of Defense, “Fiscal Year (FY) 2016 Budget Estimates: Defense
Wide Justification Book Volume 1 of 2,” February 2015, Exhibit P-40, Budget Line Item Justification Sheet, at
http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2016/budget_justification/pdfs/02_Procurement/
1_PROCUREMENT_MasterJustificationBook_Defense_Wide_PB_2016_Vol_1.pdf.
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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.104 However, small
businesses that are not 8(a) firms and other entities may also be eligible to participate.105
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. Note that while
this report describes these programs as they presently exist, certain changes may be made to these
programs in light of the requirements of the National Defense Authorization Act for FY2013
(P.L. 112-239). This legislation generally requires that agency-specific mentor- protégé programs
be approved by the SBA pursuant to regulations that would require such programs to address,
among other things, (1) eligibility for program participants, (2) the types of developmental
assistance provided to protégés, (3) the length of mentor-protégé relationships, (4) the benefits
that may accrue to the mentor as a result of program participation, and (5) the reporting
requirements during and following program participation.
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.106 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.107

104 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.”).
105 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).
106 U.S. Department of Homeland Security, “Mentor-Protégé Program,” at https://www.dhs.gov/mentor-
prot%C3%A9g%C3%A9-program; DHS, “Department of Homeland Security Acquisition Regulation,” 68 Federal
Register
67868-67870, December 4, 2003.
107 DHS, “Mentor-Protégé Program,” at http://www.dhs.gov/xopnbiz/smallbusiness/editorial_0716.shtm.
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There were 79 active DHS mentor-protégé agreements as of August 28, 2014, involving 67
mentors and 79 protégés.108 Two mentors had three protégés, 9 mentors had two protégés, and 55
mentors had one protégé.109 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.”110 Protégé
firms can be small businesses, veteran-owned small businesses, service-disabled veteran-owned
small businesses, HUBZone small businesses, “small disadvantaged businesses,”111 and women-
owned small businesses.112 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).113 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.114
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,115 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.116 Mentors are also eligible for an annual award presented
by DHS to the firm providing the most effective developmental support to a protégé.117

108 DHS, “Mentor-Protégé Companies,” at http://www.dhs.gov/xopnbiz/smallbusiness/gc_1198248049694.shtm.
109 Ibid. Five protégés had two mentors and 136 protégés had one mentor.
110 48 C.F.R. §3052.219-71(b)(1).
111 “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. For additional information and analysis
concerning SDBs, see CRS Report R40987, “Disadvantaged” Small Businesses: Definitions and Designations for
Purposes of Federal and Federally Funded Contracting Programs
, by Kate M. Manuel.
112 48 C.F.R. §3052.219-71(b)(2).
113 48 C.F.R. §3052.219-71(b)(3).
114 DHS, “Mentor-Protégé Program Details,” at http://www.dhs.gov/xlibrary/assets/opnbiz/osdbu-mentor-protege-
details.pdf.
115 48 C.F.R. §3052.219-72.
116 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.”)
117 DHS, “Mentor-Protégé Program Details,” at http://www.dhs.gov/xlibrary/assets/opnbiz/
OSDBU_MentorProtegeDetails.pdf.
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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 colleges 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; small disadvantaged
48 C.F.R. §352.219-70
businesses; Historically Underutilized
Business Zone (HUBZone) small
businesses; woman-owned smal businesses
Department of State
Small businesses; small disadvantaged
Mentor-protégé agreement may be
businesses; women-owned smal businesses; considered in evaluating adequacy of
48 C.F.R. §619.202-70
HUBZone small businesses; veteran-owned
proposed subcontracting plan and in
small businesses; service-disabled veteran-
responsibility determinations
owned smal businesses
Agency mentoring award (non-monetary)
Department of the
Small businesses; women-owned small
Bonus (not to exceed 5% of the relative
Treasury
businesses; 8(a) firms and other smal
importance assigned to technical/
disadvantaged businesses; veteran-owned
management factors) credited to mentor in
48 C.F.R. Subpart
small businesses; service-disabled veteran-
negotiated procurements
1019.202-70
owned small businesses; HUBZone small
businesses
Mentor-protégé agreement may be
considered in evaluating adequacy of
proposed subcontracting plan and in
responsibility determinations
Agency mentoring award (non-monetary)
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
pursuant to P.L. 102-389); historical y black
requirements in 48 C.F.R. §44.202-2(a)(5),
48 C.F.R. §§1552.219-
colleges and universities
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
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Agency
Eligible Protégés
Incentives for Mentors
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 colleges 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; small disadvantaged
Costs incurred in providing developmental
Administration
businesses; veteran-owned smal businesses; assistance to protégés may be considered in
service-disabled veteran-owned smal
determining indirect costs rates for
48 C.F.R. Subpart
businesses; Historically Underutilized
reimbursement
519.70
Business Zone (HUBZone) small
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; women-
May count costs of development assistance
and Space
owned small businesses; HUBZone small
provided to protégés toward subcontracting
Administration
businesses; veteran-owned smal businesses; plan
service-disabled veteran-owned smal
48 C.F.R. Subpart
businesses; historically black colleges and
Costs incurred in providing developmental
1819.72
universities; minority institutions; nonprofit
assistance to protégés may be considered in
agencies employing persons who are “blind
determining indirect costs rates for
or severely disabled”
reimbursement
Eligible to earn separate award fees associated
with the provision of developmental
assistance to NASA SBIR Phase II protégés
U.S. Agency for
Small businesses; small disadvantaged small
Costs incurred in providing developmental
International
businesses; veteran-owned smal businesses; assistance to protégés may be considered in
Development
service-disabled veteran-owned smal
determining indirect costs rates for
businesses; Historically Underutilized
reimbursement
48 C.F.R. Subpart
Business Zone (HUBZone) small
719.273
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
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: Legal Overview, by Kate M. Manuel.
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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.”118 These
programs are designed “to further the
“Disadvantaged business enterprises,” for purposes of
development of DBEs, including but not
DOT funding programs
limited to assisting them to move into
Individuals who belong to one of the fol owing racial or ethnic
non-traditional areas of work or compete
groups, or who can prove that they are personally socially
in the marketplace outside the DBE
disadvantaged, and who have a personal net worth of $1.32
program, via the provision of training and
million may qualify as “disadvantaged business enterprises”
assistance.”119 For example, mentors in
upon certification by a state funding recipient:
the Ohio Department of Transportation
(i) "Black Americans," which includes persons having origins in
Mentor/Protégé Program may assist
any of the Black racial groups of Africa; (ii) "Hispanic
Americans," which includes persons of Mexican, Puerto Rican,
protégés by (1) setting targets for
Cuban, Dominican, Central or South American, or other
improvement; (2) setting time tables for
Spanish or Portuguese culture or origin, regardless of race;
meeting those targets; (3) assisting with
(iii) "Native Americans," which includes persons who are
the protégé’s business strategies; (4)
American Indians, Eskimos, Aleuts, or Native Hawaiians; (iv)
assisting in evaluating outcomes; (5)
"Asian-Pacific Americans," which includes persons whose
origins are from Japan, China, Taiwan, Korea, Burma
assisting in developing protégés’ business
(Myanmar), Vietnam, Laos, Cambodia (Kampuchea), Thailand,
plans; (6) regularly reviewing protégés’
Malaysia, Indonesia, the Philippines, Brunei, Samoa, Guam, the
business and action plans; and (7)
U.S. Trust Territories of the Pacific Islands (Republic of Palau),
monitoring protégés’ key business
the Commonwealth of the Northern Marianas Islands, Macao,
indicators, including their cash flow, work
Fiji, Tonga, Kiribati, [T]uvalu, Nauru, Federated States of
Micronesia, or Hong Kong; (v) "Subcontinent Asian
in progress, and recent bids.120 Those in
Americans," which includes persons whose origins are from
the Illinois Department of Transportation
India, Pakistan, Bangladesh, Bhutan, the Maldives Islands, Nepal
Mentor-Protégé Program may similarly
or Sri Lanka; (vi) Women; (vii) [a]ny additional groups whose
provide training and development,
members are designated as socially and economically
disadvantaged by the SBA, at such time as the SBA designation
technical and management assistance,
becomes effective.
personnel, financial assistance, and
equipment to their protégés.121
Source: 49 C.F.R. §26.5; 49 C.F.R. §26.67.
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.122 The DOT program
does not receive a separate funding appropriation.

118 49 C.F.R. §26.35(b).
119 U.S. Department of Transportation, “DBE Final Rule, Appendix D to Part 26 - Mentor-Protégé Program
Guidelines,” 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(b).
120 Ohio Department of Transportation Mentor/Protégé Program, p. 5, at https://www.fhwa.dot.gov/resourcecenter/
teams/civilrights/odot_mentor.pdf.
121 Illinois Department of Transportation, Mentor-Protégé Program Sample Development Plan, at
http://www.dot.state.il.us/obwd/Mentor%20Protege%20Sample%20Development%20Plan.pdf.
122 DOT, Office of Small and Disadvantaged Business Utilization, telephone consultation, March 1, 2011.
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Regulations Governing DOT Mentor-Protégé Programs
DBEs may participate in DOT mentor-protégé programs as either mentors or protégés. However,
under DOT regulations, all DBEs involved in a mentor-protégé agreement must be independent
business entities that meet the requirements for certification as a DBE. These regulations also
require that firms be certified before participating as a protégé in a mentor-protégé
arrangement.123
The relationship between mentor and protégé is based on a written development plan, approved
by the recipient of the DOT funding, “which clearly sets forth the objectives of the parties and
their respective roles, the duration of the arrangement and the services and resources to be
provided by the mentor to the protégé.”124 The formal mentor-protégé agreement may establish a
fee schedule to cover the direct and indirect cost of services provided by the mentor to the
protégé. Services provided by the mentor may be reimbursable if these services and any
associated costs are “directly attributable and properly allowable.”125
Participant Benefits
Mentor firms may generally count the amount of assistance they provide to their protégés toward
their goals for contracting or subcontracting with DBEs. However, under DOT regulations, a non-
DBE mentor firm cannot receive credit for meeting more than half of its goal on any contract by
using its own protégé.126 These regulations also prohibit a non-DBE mentor firm from receiving
DBE credit for using its own protégé on more than every other contract performed by the
protégé.127 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.128
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.129 The SBA’s suspension (and later
reinstatement) of a mentor in the 8(a) Mentor-Protégé Program for fraud,130 as well as reports of

123 49 C.F.R. Part 26, App’x D, at C.
124 49 C.F.R. Part 26, App’x D, at (B)(1).
125 49 C.F.R. Part 26, App’x D, at (B)(2).
126 49 C.F.R. §26.35(b)(2)(i).
127 49 C.F.R. §26.35(b)(2)(ii).
128 DOT, “DBE Final Rule, Section 26.35 - What Role do Business Development and Mentor-Protégé Programs Have
in the DBE Program?” at http://www.osdbu.dot.gov/DBEProgram/final/final19.cfm.
129 For additional information and analysis concerning the 8(a) Program, see 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.
130 Ibid.
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fraud in several of the SBA’s contracting programs, has also contributed to congressional
interest.131 In addition, GAO has found that the SBA “has not been able to properly oversee [the
8(a) mentor-protégé] program,”132 and the SBA 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.”133 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.”134 Given these developments, and SBA’s anticipated addition of a mentor-protégé
program for non-8(a) small businesses, it seems likely that mentor-protégé programs will remain
subject to congressional oversight or proposed legislation during the 114th 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
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.135 Data of a similar
nature could potentially assist Congress in its assessment of federal agency small business
mentor-protégé programs.


131 Ibid.
132 Ibid., p. 24.
133 SBA, “Final Regulations Will Strengthen 8(a) Business Development Program for Small Businesses,” February 11,
2011, at http://www.sba.gov/content/final-regulations-will-strengthen-8a-business-development-program-small-
businesses.
134 GAO, Mentor-Protégé Programs Have Policies That Aim to Benefit Participants But Do Not Require
Postagreement Tracking
, GAO-11-548R, June 15, 2011, p. 9, at http://www.gao.gov/new.items/d11548r.pdf.
135 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 smal 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

Senior Specialist in American National Government
rdilger@crs.loc.gov, 7-3110


Acknowledgments
The author would like to thank Kate Manuel, legislative attorney in the American Law Division, for her
assistance in authoring this report, and for co-authoring previous versions of this report.
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