Small Business Mentor-Protégé Programs
Updated October 21, 2020
Congressional Research Service
https://crsreports.congress.gov
R41722

link to page 30 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 Small Business Administration’s (SBA) All Small Mentor-
Protégé Program is a government-wide program designed to assist small businesses 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.
The SBA’s All Small Mentor-Protégé Program began accepting applications on October 1, 2016,
and currently has 1,198 active mentor-protégé agreements. The SBA also has a mentor-protégé
program for participants in the 8(a) Business Development Program that has been operational
since July 30, 1998. That program is being merged into the All Small Mentor-Protégé Program,
effective as of November 16, 2020. The SBA is consolidating the programs in an effort to
“eliminate confusion regarding perceived differences between the two Programs, remove
unnecessary duplication of functions within SBA, and establish one, unified staff to better
coordinate and process mentor-protégé applications.”
This report provides an overview of the federal government’s various small business mentor-
protégé programs. All of these programs are intended to assist small businesses in performing as
contractors, subcontractors, or suppliers on federal or federally funded contracts, but the
programs differ in their scope and operations.
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Introduction
Mentor-protégé programs are designed to assist small business development, focusing on
enhancing the protégé’s capacity to serve as either a prime contractor or a subcontractor in federal
contracts. These 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, whereas mentors may receive credit toward
subcontracting goals, reimbursement of certain expenses,1 or other incentives for assisting
protégés.
Five federal agencies have SBA-approved mentor-protégé programs:
 Department of Energy,
 Department of Homeland Security (DHS),
 National Aeronautics and Space Administration,
 U.S. Small Business Administration (SBA), and
 Department of Transportation.2
Two federal agencies have mentor-protégé programs that do not require SBA’s approval because
their programs are not covered by the Small Business Act:
 Department of Defense (DOD) and
 Federal Aviation Administration.
Mentor-protégé programs seek to assist small businesses in various ways.3 For example,

1 Three federal departments and agencies provide mentors reimbursement for certain expenses related to providing
assistance to protégés: the Department of Defense (DOD), Department of Energy, and Federal Aviation
Administration.
2 U.S. Small Business Administration (SBA), “Report to Congress on Mentor-Protégé Programs for Fiscal Year 2018,”
October 8, 2019, at
https://www.sba.gov/sites/default/files/resource_files/FY18_MPP_Report_to_Congress_with_Agency_Reports_Final.p
df; and U.S. Department of Transportation, Office of Small and Disadvantaged Business Utilization, “Correspondence
with the author,” October 4, 2019.
There were 13 active Mentor-Protégé programs during FY2017. The Departments of Health and Human Services and
Treasury, and the U.S. Agency for International Development ended their mentor-protégé programs during FY2017.
The 10 active mentor-protégé programs at the end of FY2017 were at: the Departments of Defense, Energy, Homeland
Security, and Transportation, the Environmental Protection Agency, General Services Administration, National
Aeronautics and Space Administration, and Small Business Administration (three programs). The Environmental
Protection Agency retired its program on September 19, 2018, and the General Services Administration retired its
program on April 3, 2019. SBA, “Report to Congress on Mentor-Protégé Programs for Fiscal Year 2017,” June 2019,
at http://www.sba.gov/sites/default/files/resources_articles/Final_FY_17_Mentor-Protege_Report_to_Congress_6-14-
2019.pdf; Environmental Protection Agency, “Acquisition Regulation: Removal of EPA Mentor Protégé Program,” 83
Federal Register 28772-28774, June 21, 2018; and General Services Administration, “General Services Administration
Acquisition Regulation (GSAR); Transition to SBA Mentor-Protégé,” 84 Federal Register 1410-1411, February 4,
2019.
3 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.
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 the 8(a) Mentor-Protégé Program assists “small businesses owned and controlled
by socially and economically disadvantaged individuals” participating in the
SBA’s Business Development Program (formerly called the Minority Small
Business and Capital Ownership Development Program and commonly known as
the 8(a) program) in obtaining and performing contracts with executive-branch
agencies;
 the SBA’s All Small Mentor-Protégé Program is “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.”4
 the DOD Mentor-Protégé Program assists various types of small businesses and
other entities in performing as subcontractors or suppliers on DOD contracts; and
 other agency-specific mentor-protégé programs, such as that of the DHS, provide
mentor firms incentives to subcontract agency prime contracts with small
businesses.
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.5 The SBA’s suspension (and later
reinstatement) of a 8(a) Mentor-Protégé Program mentor 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.6 P.L. 111-240 also

4 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.
5 For example, in one notable instance, in October 2010, the SBA suspended a 8(a) Mentor-Protégé Program mentor
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 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.
6 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.
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required the Government Accountability Office (GAO) to assess the effectiveness of mentor-
protégé programs generally.7 GAO’s findings were reported on June 15, 2011.8
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. In an effort to promote uniformity, the
act, with some exceptions, prohibits agencies from carrying out mentor-protégé programs that
have not been approved by the SBA.9
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.”10 The SBA decided not to 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.”11 The SBA also determined 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.”12 The SBA estimated that approximately 2,000 small businesses could become active
in the proposed mentor-protégé program for small businesses.13
On July 25, 2016, the SBA published a final rule in the Federal Register establishing, effective
August 24, 2016, the new, government-wide mentor-protégé program for all small businesses.
The final rule also modified the SBA’s 8(a) Mentor-Protégé Program in an effort to make the two

7 Small Business Jobs Act of 2010, P.L. 111-240, §§1345 & 1347, 124 Stat. 2546-47 (September 27, 2010).
8 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. 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.
9 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.
10 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.
11 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,” pp. 6618-6619.
12 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,” p. 6619.
13 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,” p. 6628; and SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48574,
July 25, 2016.
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programs as consistent as possible.14 As a result, 8(a) small businesses may participate in either
program. The SBA began to accept applications for the All Small Mentor-Protégé Program on
October 1, 2016.
The SBA noted in the final rule that because its new small business mentor-protégé program will
apply to all federal small business contracts and federal agencies, “conceivably other agency-
specific mentor-protégé programs would not be needed.”15 In recognition that one or more
agency-specific mentor-protégé programs may be discontinued and that several of these programs
provide incentives in the contract evaluation process to mentor firms that provide significant
subcontracting work to their protégés, the SBA allows procuring agencies, in appropriate
circumstances, to provide subcontracting incentives to mentor firms participating in its mentor-
protégé programs as well.16
Since 2016, several federal agencies have ended their mentor-protégé programs and encouraged
interested parties to consider the SBA’s All Small Mentor-Protégé Program. In addition, the SBA
is merging the 8(a) Mentor-Protégé Program into the All Small Mentor-Protégé Program in an
effort to “eliminate confusion regarding perceived differences between the two Programs, remove
unnecessary duplication of functions within SBA, and establish one, unified staff to better
coordinate and process mentor-protégé applications.”17 The merger will be effective on November
16, 2020.
This report provides an overview of the federal government’s various small business mentor-
protégé programs. As is discussed below, all of these programs are intended to assist small
businesses in performing as contractors, subcontractors, or suppliers on federal or federally
funded contracts, but the programs differ in their scope and operations. Table A-1 in the
Appendix provides an overview of key differences among the programs.
Mentor-Protégé Programs Administered by the SBA
The SBA administers three mentor-protégé programs, one for firms participating in the 8(a)
program, another for firms in its Small Business Innovation Research (SBIR) and Small Business
Technology Transfer (STTR) programs,18 and one for all small businesses.
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.19 The SBA implemented this direction, in part, by

14 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48558-48595, July 25, 2016.
15 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48565, July 25, 2016.
16 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48566, July 25, 2016.
17 SBA, “Consolidation of Mentor Protégé Programs and Other Government Contracting Amendments,” 84 Federal
Register 60846, November 8, 2019; and SBA, “Consolidation of Mentor Protégé Programs and Other Government
Contracting Amendments,” 85 Federal Register 66146-66199, October 16, 2020.
18 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.
19 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)).
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establishing a mentor-protégé program on July 30,
1998,20 wherein mentors “enhance the capabilities” of
“Socially and economically
8(a) firms and “improve [their] ability to successfully
disadvantaged individuals,” for
compete for contracts” by providing various forms of
purposes of the 8(a) program
assistance.21 Such assistance may include technical or
Individuals who belong to one of the fol owing
management assistance; financial assistance in the
racial or ethnic groups, or who can prove that
they are personally socially disadvantaged, and
form of equity investments or loans; subcontracts;
who have a personal net worth of $250,000
trade education; and assistance in performing prime
or less at the time of application to the
contracts with the government through joint venture
program ($750,000 for continuing eligibility)
agreements.22
may be approved by the SBA to participate in
the 8(a) program for up to nine years:
Although the SBA was directed to establish this
Black Americans; Hispanic Americans; Native
mentor-protégé program and SBA rules govern
Americans (American Indians, Eskimos, Aleuts,
participation in the program, as discussed below, the
or Native Hawaiians); Asian Pacific Americans
8(a) Mentor-Protégé Program is government-wide in
(persons with origins from Burma, Thailand,
Malaysia, Indonesia, Singapore, Brunei, Japan,
the sense that firms in the program may enjoy the
China [including Hong Kong], Taiwan, Laos,
benefits of participation in it while performing the
Cambodia [Kampuchea], Vietnam, Korea, The
contracts of any federal agency.23
Philippines, U.S. Trust Territory of the Pacific
Islands [Republic of Palau], Republic of the
In fact, when agencies that do not have their own
Marshall Islands, Federated States of
mentor-protégé programs, such as those discussed
Micronesia, the Commonwealth of the
below, are involved, the 8(a) Mentor-Protégé Program
Northern Mariana Islands, Guam, Samoa,
may be referred to as if it were that agency’s
Macao, Fiji, Tonga, Kiribati, Tuvalu, or Nauru);
Subcontinent Asian Americans (persons with
program.
origins from India, Pakistan, Bangladesh, Sri
The SBA’s 8(a) Mentor-Protégé Program is
Lanka, Bhutan, the Maldives Islands, or Nepal);
and members of other groups designated from
administered by the SBA’s Office of Business
time to time by SBA.
Development. This makes it somewhat different from
Source: 13 C.F.R. §§124.103-124.104.
the agency-specific mentor-protégé programs,
discussed later, which generally are the responsibility
of the agency’s Office of Small and Disadvantaged Business Utilization (OSDBU) and may
involve coordination with agency contracting offices.24

20 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.
21 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.
22 13 C.F.R. §124.520(a).
23 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., DOD’s 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.
24 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.
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As of February 27, 2018, there were 493 active 8(a) mentor-protégé agreements.25
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, “Any [for
profit] concern that demonstrates a commitment and the ability to assist developing 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.26 Only firms approved by the SBA may serve as mentors, and SBA
regulations require that each mentor (1) demonstrate that it “is capable of carrying out its
responsibilities to assist the protégé firm under the proposed mentor-protégé agreement”;27 (2)
possess “good character”;28 (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.”29
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. Protégés must also qualify as small for the size standard corresponding to their primary
(or, under specified circumstances, their secondary) North American Industry code and
demonstrate how the business development assistance to be received through the mentor-protégé
relationship would advance the goals and objectives set forth in their business plans.30
Initially, mentors could only have one protégé, and protégés could have only one mentor.31
However, these restrictions were removed effective March 14, 2011.32 SBA’s regulations now
provide that mentors are generally expected to have no more than one protégé at a time. However,

25 SBA, “All Small Mentor Protégé Program,” February 27, 2018.
26 13 C.F.R. §124.520(b). Previously, nonprofit entities were eligible to serve as mentors. For discussion concerning
restricting eligibility to for profit entities, see SBA, “Small Business Mentor Protégé Program,” 81 Federal Register
48562, 48563, July 25, 2016.
27 Previously, 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). 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. Approved mentors are also required to certify annually that they continue to possess good character and a
favorable financial position. 13 C.F.R. §124.520(b)(4). For discussion concerning the change from “favorable financial
health” to “capable of carrying out its responsibilities,” see SBA, “Small Business Mentor Protégé Program,” 81
Federal Register 48563, July 25, 2016.
28 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).
29 13 C.F.R. §124.520(b)(1)(i)-(iv).
30 Previously, protégés were required to (1) be in the “developmental stage,” or the first four years of the 8(a) 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. For discussion of the change in these requirements, see SBA, “Small Business
Mentor Protégé Program,” 81 Federal Register 48564, 48565, July 25, 2016.
31 13 C.F.R. §124.520(b)(2) & (c)(3) (2010).
32 See SBA, “Small Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status
Determinations,” 76 Federal Register 8243, February 11, 2011.
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mentors may have up to three protégés at one time provided that they can demonstrate that “the
additional mentor/protégé relationship[s] will not adversely affect the development of either
protégé firm.”33 Protégés are also generally expected to have no more than one mentor at a time.
However, protégés may, under specified circumstances, have two mentors.34
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.35 This agreement generally obligates the mentor
to furnish assistance to the protégé for at least one year,36 although it does allow either mentor or
protégé to terminate the agreement with 30 days’ advance notice to the other party and the SBA.37
In addition, the agreement provides that the SBA will review the mentor-protégé agreement
annually to determine whether to approve its continuation.38 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.39
Unless rescinded in writing, the mentor-protégé agreement will automatically renew for another
year. The term of a mentor-protégé agreement is limited to three years but may be extended for a
second three-year period.40 Protégés may have two three-year mentor-protégé agreements with
different mentors, and each agreement may be extended an additional three years provided the
protégé has received, and will continue to receive, the agreed-upon business development
assistance.41 The SBA may terminate the mentor-protégé agreement at any time if it determines
that the protégé is not adequately benefiting from the relationship or that the parties are not
complying with any of the agreement’s terms or conditions.42

33 13 C.F.R. §124.520(b)(2).
34 13 C.F.R. §124.520(c)(3). The specified circumstances are that the AA/BD [Associate Administrator for Business
Development] may approve a second mentor for a particular protégé firm in which the second relationship will not
compete or otherwise conflict with the business development assistance set forth in the first mentor/protégé relationship
and either (1) the second relationship pertains to a secondary NAICS code or (2) the protégé firm is seeking to acquire
a specific expertise that the first mentor does not possess. Note: …the AA/BD may authorize a participant to be both a
protégé and a mentor at the same time where the participant can demonstrate that the second relationship will not
compete or otherwise conflict with the first mentor-protégé relationship. See SBA, “Small Business Mentor Protégé
Program,” 81 Federal Register 48584, July 25, 2016.
35 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).
36 13 C.F.R. §124.520(e)(1)(iii).
37 13 C.F.R. §124.520(e)(3).
38 13 C.F.R. §124.520(e)(4).
39 13 C.F.R. §124.112(b)(6); 13 C.F.R. §124.520(g)(1)(i)-(v).
40 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48585, July 25, 2016.
41 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48585, July 25, 2016.
42 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48585, July 25, 2016.
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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.43 Section
8(d) requires that all federal contractors awarded a contract valued in excess of $700,000 ($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.”44 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.45 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.46 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.47
Because mentor firms are not 8(a) participants, they would generally be prohibited from owning
more than 10%-20% of an 8(a) firm.48 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.49 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,50 and the
SBA could potentially find that firms are affiliates because of assistance such as that which
mentors provide to protégés.51 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.”52

43 13 C.F.R. §125.3(b)(3)(ix).
44 15 U.S.C. §637(d)(3)(A).
45 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.
46 See generally 13 C.F.R. §121.103.
47 13 C.F.R. §124.520(d)(2).
48 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.” The developmental stage consists of the first four years of
the 8(a) program, while the transitional stage consists of the last five years.
49 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”).
50 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).
51 See generally 13 C.F.R. §121.103.
52 13 C.F.R. §124.520(d)(4).
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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.53 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,”54 and concluded that
the “SBA has not been able to properly oversee this program.”55
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.56 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.”57 GAO’s
report was submitted to the House and Senate Committees on Small Business on June 15, 2011.58
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.59 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
receiving appropriated funding.”60 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.”61 However, it found that only DOD, 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.”62 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.”63

53 For additional information and analysis of the 8(a) program, see CRS Report R44844, SBA’s “8(a) Program”:
Overview, History, and Current Issues, by Robert Jay Dilger.
54 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.
55 GAO, Small Business Administration: Steps Have Been Taken to Improve Administration of the 8(a) Program, but
Key Controls for Continued Eligibility Need Strengthening, p. 24.
56 P.L. 111-240, §1345(a), 124 Stat. 2546.
57 P.L. 111-240, §1345(a), 124 Stat. 2546.
58 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.
59 GAO, Mentor-Protégé Programs Have Policies That Aim to Benefit Participants But Do Not Require Postagreement
Tracking, p. 4.
60 GAO, Mentor-Protégé Programs Have Policies That Aim to Benefit Participants But Do Not Require Postagreement
Tracking, pp. 4-5.
61 GAO, Mentor-Protégé Programs Have Policies That Aim to Benefit Participants But Do Not Require Postagreement
Tracking, p. 9.
62 GAO, Mentor-Protégé Programs Have Policies That Aim to Benefit Participants But Do Not Require Postagreement
Tracking, p. 9.
63 GAO, Mentor-Protégé Programs Have Policies That Aim to Benefit Participants But Do Not Require Postagreement
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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.64 Among the changes, which took effect on March 14,
2011, are some pertaining to the 8(a) Mentor-Protégé Program. These changes
 required that assistance provided through the mentor-protégé relationship be tied
to the protégé’s SBA-approved business plan;
 allowed mentors to have up to three protégés;
 allowed firms seeking to become mentors to submit audited financial statements
or other evidence to demonstrate their “favorable financial health” (this provision
was revised in 2016);
 explicitly recognized nonprofits as potential mentors (this provision was
eliminated in 2016);
 permitted protégés to have a second mentor in certain circumstances;65
 prohibited 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 (this
provision was eliminated in 2016);
 permitted firms to request reconsideration of SBA’s denial of a proposed mentor-
protégé agreement;
 required 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;
 authorized 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
 prohibited mentors who are terminated for failure to provide assistance under
their mentor-protégé agreement from serving as a mentor for two years.66
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.”67 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

Tracking, p. 9.
64 SBA, “Small Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status
Determinations,” 76 Federal Register 8222-8223, February 11, 2011.
65 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.
66 SBA, “Small Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status
Determinations,” 76 Federal Register 8244-8247, February 11, 2011.
67 SBA, “Small Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status
Determinations,” 76 Federal Register 8243, February 11, 2011.
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work done by the joint venture).68 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 ($7.0
million for manufacturing contracts) are generally prohibited from serving as subcontractors (at
any tier) on the contract.69 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.
In addition, the final rule establishing the new SBA small business mentor-protégé program
amended the current joint venture provisions to clarify the conditions for creating and operating
joint venture partnerships.70
P.L. 112-239 also sought 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.”71 The SBA administrator was required to issue
regulations with respect to mentor-protégé programs not later than 270 days after the bill’s
enactment, which was January 2, 2013 (the regulations were issued on July 25, 2016). 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.72
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.
Effective August 24, 2016, federal agencies (other than DOD and the two exempt programs) were
provided a year to submit a plan to the SBA Administrator for approval to continue a previously
existing mentor-protégé program. Approval is contingent on whether the proposed program will
assist protégés to compete for federal prime contracts and subcontracts and whether it complies

68 SBA, “Small Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status
Determinations,” 76 Federal Register 8242-8243, February 11, 2011. 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.
69 SBA, “Small Business Size Regulations; 8(a) Business Development/Small Disadvantaged Business Status
Determinations,” 76 Federal Register 8241, February 11, 2011. 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.
70 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48559-48562, 48583- 48584, July 25, 2016.
71 Any federal mentor-protégé program in effect at the date of the bill’s enactment must submit plans to the SBA for
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.
72 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.
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with the rules and regulations of the SBA’s mentor-protégé programs (as set forth in 13 C.F.R.
§§125.9 and 124.520).73
As mentioned, five federal agencies currently have SBA-approved mentor-protégé programs
(Department of Energy, Department of Homeland Security, Department of Transportation,
National Aeronautics and Space Administration, and the SBA) and two federal agencies have
mentor-protégé programs that do not require SBA’s approval because their programs are not
covered by the Small Business Act (DOD and the Federal Aviation Administration).
In addition, before starting a new mentor-protégé program, agency heads must submit a plan and
receive the SBA Administrator’s approval.74 Agencies sponsoring an agency-specific mentor-
protégé program must report annually to the SBA specific information, such as the number and
type of small business participants, the assistance provided, and the protégés’ progress in
competing for federal contracts.75
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”76 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 nonprofit 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.77
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.78
In FY2020, the SBA awarded 24 FAST partnership awards of $125,000 each to state and local
economic development entities, small business technology development centers, women’s
business centers, procurement technical assistance centers, incubators, accelerators, colleges, and

73 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48589, July 25, 2016.
74 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48589, July 25, 2016.
75 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48590, July 25, 2016.
76 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)).
77 15 U.S.C. §657d(c)(1)(E)(ii).
78 15 U.S.C. §657e(c)(1)-(5).
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universities.79 The program received an appropriation of $2 million each year from FY2010 to
FY2015, and $3 million each year from FY2016 to FY2021.80
Recent Developments
During the 114th Congress, P.L. 114-88, the Recovery Improvements for Small Entities After
Disaster Act of 2015 (RISE After Disaster Act), directed the SBA Administrator to provide
special consideration to a FAST applicant that is located in an area affected by a catastrophic
incident. The Trump Administration recommended that funding for the FAST program be
eliminated in FY20018, FY2019, FY2020, and FY2021.81
SBA’s All Small Mentor-Protégé Program
The SBA’s All Small Mentor-Protégé Program is generally required to be “identical” to the
SBA’s 8(a) Mentor-Protégé Program, except that the SBA may make modifications to the extent
necessary given the types of small businesses included in the program as protégés. For example,
among other things, the small businesses mentor-protégé program requires a protégé to qualify as
small for the size standard corresponding to its primary (or, under specified circumstances, its
secondary) NAICS code. The 8(a) Mentor-Protégé Program also requires protégés to be small
businesses unconditionally owned and controlled by socially and economically disadvantaged
individuals, to demonstrate potential for success, and to be eligible to receive contracts under
Section 8(a) of the Small Business Act.
The SBA initially proposed to permit only firms that have been affirmatively determined by the
SBA to be small to qualify as protégés for the small business mentor-protégé program because
small businesses in the 8(a) program are certified as being small by the SBA.82 However, given
the expected volume of applications for the All Small Mentor-Protégé Program, the SBA decided
in the final rule to allow applicants to the new program to self-certify as small. The SBA will rely
on size protest procedures to prevent ineligible businesses from unduly benefitting from its
mentor-protégé relationship under the new program.83
In addition, the SBA’s Office of Business Development administers the 8(a) Mentor-Protégé
Program. Given that “the volume of firms seeking mentor-protégé relationships [under the new
small business mentor-protégé program] could excessively delay SBA’s processing of
applications,” the SBA decided, after considering various options, “to establish a separate unit

79 SBA, “SBA Awards Grants to 24 Organizations to Support Small Business Innovation and R&D
Commercialization,” September 18, 2020, at https://www.sba.gov/article/2020/sep/18/sba-awards-3-million-grants-
organizations-supporting-small-business-innovation-rd-commercialization.
80 P.L. 111-117; P.L. 112-8; P.L. 112-74; P.L. 112-175; P.L. 113-76; P.L. 113-235, P.L. 114-113, P.L. 115-31, P.L.
115-141; P.L. 116-6; P.L. 116-93; and P.L. 116-159 (funding through December 11, 2020).
81 SBA, “FY2018 Congressional Budget Justification and FY2016 Annual Performance Report,” pp. 11, 75, at
https://www.sba.gov/sites/default/files/aboutsbaarticle/FINAL_SBA_FY_2018_CBJ_May_22_2017c.pdf; SBA,
“FY2019 Congressional Budget Justification and FY2017 Annual Performance Report,” pp. 68, 69, at
https://www.sba.gov/sites/default/files/aboutsbaarticle/SBA_FY_19_508-Final-FINAL.PDF; SBA, “FY2020
Congressional Budget Justification and FY2018 Annual Performance Report,” pp. 8, 69, at
https://www.sba.gov/sites/default/files/2019-
04/SBA%20FY%202020%20Congressional%20Justification_final%20508%20%204%2023%202019.pdf; and SBA,
“FY2021 Congressional Budget Justification and FY2019 Annual Performance Report,” pp. 8, 11, at
https://www.sba.gov/document/report--congressional-budget-justification-annual-performance-report.
82 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48564-48565, July 25, 2016.
83 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48565, July 25, 2016.
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within the Office of Business Development whose sole function [is] to process mentor-protégé
applications and review the MPAs [mentor-protégé agreements] and the assistance provided
under them once approved.”84 The SBA indicated that “the efficiencies gained by having a
dedicated staff for the small business mentor-protégé program will allow SBA to timely process
applications … and [reduce] the need for open and closed enrollment periods.”85
As of October 1, 2020, there were 1,198 active All Small Mentor-Protégé Program agreements.86
OIG Report
On September 17, 2019, the SBA’s Office of Inspector General (OIG) issued a report examining
the SBA’s oversight of the All Small Mentor-Protégé Program and found that
 key controls were missing to prevent unqualified mentors from receiving
program benefits;
 program controls were not effective to ensure small businesses developed as
intended; and
 the SBA did not adequately measure the program’s benefits.87
The OIG recommended that the SBA take steps to “align its application and annual evaluation
processes with program regulations … adequately measure program success,” and “prioritize staff
and information technology resources to improve the implementation of its program processes.”88
The SBA agreed with the OIG’s recommendations concerning the program’s processes, but did
not agree with the recommendation concerning prioritizing staff and information technology
resources, indicating that it “reserves the right to allocate resources as it deems appropriate to
meet the regulatory and program requirements of the organization.”89
DOD Mentor-Protégé Program
Congress authorized a pilot mentor-protégé program for DOD in 1990. The program’s purposes
are to
(1) enhance the capabilities of disadvantaged small business concerns to perform as
subcontractors and suppliers under Department of Defense contracts and other contracts
and subcontracts; and (2) increase the participation of such business concerns as
subcontractors and suppliers under Department of Defense contracts, other Federal
Government contracts, and commercial contracts.90

84 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48562, July 25, 2016.
85 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48562, July 25, 2016.
86 SBA, “Active mentor-protégé agreements,” at https://www.sba.gov/document/support-active-mentor-protege-
agreements. There were 102 active All Small Mentor-Protégé Program agreements on March 2, 2017, 377 on January
1, 2018, 443 on February 27, 2018, 473 on April 5, 2018, 644 on December 1, 2018, 928 on October 5, 2019, and 969
on December 1, 2019.
87 SBA, Office of Inspector General, “Evaluation of SBA’s All Small Mentor-Protégé Program,” Report Number 19-
17, September 17, 2019, at https://www.sba.gov/sites/default/files/oig/SBA-OIG-Report-19-17.pdf.
88 SBA, Office of Inspector General, “Evaluation of SBA’s All Small Mentor-Protégé Program,” p. i.
89 SBA, Office of Inspector General, “Evaluation of SBA’s All Small Mentor-Protégé Program,” p. 10.
90 P.L. 114-92, the National Defense Authorization Act for Fiscal Year 2016, §861 (codified, as amended, at 10 U.S.C.
§2302 note). See P.L. 101-510, 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
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DOD’s Mentor-Protégé Program began on October 1, 1991, and was the first federal mentor-
protégé program to become operational. Originally scheduled to expire in 1994,91 it has been
repeatedly extended, most recently through FY2024 for the formation of new agreements, and
FY2026 for the reimbursement of incurred costs under existing agreements.92
DOD’s Mentor-Protégé Program differs from the SBA’s 8(a) Mentor-Protégé Program and All
Small 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) and new small
business mentor-protégé programs. 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.93
Mentors may also (1) award subcontracts on a noncompetitive basis to their protégés even if they
are otherwise subject to “competition in subcontracting” requirements;94 (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; and (4) provide assistance in general business management,
engineering and technical matters, etc.95

Personnel Strengths for the Armed Forces and for Other Purposes, §831, 104 Stat. 1607-08 (November 5, 1990) for
earlier language. The wording of the program’s purpose was modified somewhat by P.L. 114-92 in an effort to better
reflect the goals of the mentor-protégé programs sponsored by the SBA and other civilian agencies.
91 P.L. 101-510, 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, 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. 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.
92 See, e.g., P.L. 112-81, the National Defense Authorization Act for FY2012, §867, 125 Stat. 1526; P.L. 114-92, the
National Defense Authorization Act for FY2016, §861; and P.L. 116-92, the National Defense Authorization Act for
FY2020, §872.
93 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.
94 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).
95 48 C.F.R. Ch. 2, Appendix I, I-106(d)(1)-(7).
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Regulations Governing the DOD
“Socially and economically
Mentor-Protégé Program
disadvantaged individuals,” for
purposes of the DOD Mentor-Protégé
Mentor firms are prime contractors with at
Program
least one active subcontracting plan negotiated
as required under Section 8(d) of the Small
Individuals who belong to one of the fol owing racial or
ethnic groups, or who can prove that they are
Business Act, or under the DOD
personally socially disadvantaged, and who have a
Comprehensive Subcontracting Test
personal net worth of $750,000 or less may qualify as
Program.96 Initially, only small businesses
socially and economically disadvantaged without being
owned and controlled by socially and
certified as such by SBA:
economically disadvantaged individuals could
Black Americans; Hispanic Americans; Native
qualify as protégés.
Americans (American Indians, Eskimos, Aleuts, or
97 However, the listing of
Native Hawaiians); Asian Pacific Americans (persons
eligible protégés was later expanded98 to
with origins from Burma, Thailand, Malaysia, Indonesia,
include (1) businesses owned and controlled
Singapore, Brunei, Japan, China [including Hong Kong],
by Indian tribes or Alaska Native
Taiwan, Laos, Cambodia [Kampuchea], Vietnam, Korea,
Corporations; (2) businesses owned and
The Philippines, U.S. Trust Territory of the Pacific
controlled by Native Hawaiian Organizations;
Islands [Republic of Palau], Republic of the Marshall
Islands, Federated States of Micronesia, the
(3) qualified organizations employing
Commonwealth of the Northern Mariana Islands,
“severely disabled individuals”; (4) women-
Guam, Samoa, Macao, Fiji, Tonga, Kiribati, Tuvalu, or
owned small businesses; (5) service-disabled
Nauru); Subcontinent Asian Americans (persons with
veteran-owned small businesses; and (6)
origins from India, Pakistan, Bangladesh, Sri Lanka,
Bhutan, the Maldives Islands, or Nepal); and members
Historically Underutilized Business Zone
of other groups designated from time to time by SBA.
(HUBZone) small businesses.99 Mentors
Source: 13 C.F.R. §124.1002
generally may rely in good faith on their
protégés’ written representations that they are
eligible.100
Under DOD regulations, mentors’ participation in the program must be approved by DOD.101
While protégés are selected by the mentor,102 the SBA may, at any time, determine that a protégé
is ineligible.103 Each mentor is allowed to have multiple protégés, but each protégé may have only
one mentor at any time.104

96 48 C.F.R. §219.7102(a). Mentors generally may not be small businesses. See 48 C.F.R. Ch. 2, Appendix I, I-
102(a)(1).
97 See P.L. 101-510, §831(m)(2), 104 Stat. 1611.
98 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).
99 48 C.F.R. §219.7102(b)(1)(i)-(vii). A severely disabled individual is an individual who is blind (as defined in 41
U.S.C. §8501) or a severely diasbled individaul (as defined in such section).
100 48 C.F.R. Ch. 2, Appendix I, I-102(c).
101 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).
102 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).
103 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.
104 48 C.F.R. Ch. 2, Appendix I, I-104(e).
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As of January 1, 2018, there were 63 active mentor-protégé agreements involving 39 mentors and
63 protégés.105 One mentor had seven protégés, 1 mentor had 6 protégés, 1 mentor had 5
protégés, 2 mentors had 3 protégés, 5 mentors had 2 protégés, and 29 mentors had one protégé.106
Mentors and protégés are required, by regulation, to enter into an agreement establishing a
developmental assistance program for the protégé.107 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 of up to 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.108 DOD
generally requires that this agreement be approved before the mentor incurs any costs.109 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.110 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.111
Participant Benefits
Among the benefits that the DOD program provides for mentors are (1) reimbursement of
specified assistance costs and (2) credit for unreimbursed costs toward applicable subcontracting
goals.112 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.113 Alternatively, DOD may credit toward the

105 DOD, “Active MPP [Mentor-Protégé Program] Agreements,” January 1, 2018.
106 DOD, “Active MPP [Mentor-Protégé Program] Agreements,” January 1, 2018.
107 48 C.F.R. Ch. 2, Appendix I, I-106.
108 48 C.F.R. Ch. 2, Appendix I, I-107.
109 48 C.F.R. Ch. 2, Appendix I, I-108(c).
110 48 C.F.R. Ch. 2, Appendix I, I-112.2(a) & (e).
111 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.
112 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 DOD, GSA, 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.
113 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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mentor’s subcontracting plan an amount equivalent to the amount of unreimbursed assistance that
the mentor provides to its protégé(s).114 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
P.L. 114-92, the National Defense Authorization Act for FY2016, extended the DOD Mentor-
Protégé Program through FY2018 for the formation of new agreements and through FY2021 for
the reimbursement of incurred costs under existing agreements.115 The act also changed eligibility
requirements so that protégés
 can participate in the program only during the five-year period beginning on the
date they enter into their first DOD mentor-protégé agreement;
 must be less than half the SBA size standard assigned to its corresponding
NAICS code; and
 must either be a nontraditional defense contractor or currently provide goods or
services in the private sector that are critical to enhancing the capabilities of the
defense supplier base and fulfilling key DOD needs.
These changes were designed to better align DOD’s Mentor-Protégé Program’s eligibility
requirements with those of the SBA’s 8(a) Mentor-Protégé Program (as they were at that time)
and to further ensure that DOD’s program focused on providing assistance to mentors and
protégés that were meeting key DOD needs.
P.L. 116-92, the National Defense Authorization Act for FY2020, increased the size standard for
determining eligibility for DOD’s Mentor-Protégé Program from less than half of the SBA size
standard assigned to its corresponding NAICS code to not more than the SBA’s size standard
assigned to its corresponding NAICS code. This change was designed to better align DOD’s
Mentor-Protégé Program’s eligibility requirements with those of the SBA’s 8(a) Mentor-Protégé
Program (which increased its size standard for determining eligibility from less than half to not
more than the SBA’s size standard assigned to its corresponding NAICS code in 2016).116
P.L. 114-92 also
 specified that the mentor must not be affiliated with the protégé firm prior to the
approval of the mentor-protégé agreement;117
 disallowed reimbursement for business-development activities and explicitly
stated that DOD “may not reimburse any fee assessed by the mentor firm for

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.
114 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(c).
115 See National Defense Authorization Act for FY2016, P.L. 114-92, §861.
116 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48564, 48565, July 25, 2016
117 P.L. 114-328, the National Defense Authorization Act for Fiscal Year 2017, requires the SBA to determine whether
a prospective protégé firm is affiliated with its proposed mentor prior to approval of a DOD mentor-protégé agreement.
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services provided to the protégé firm pursuant to subsection (f)(6) [assistance
from small business development centers, entities providing procurement
technical assistance or a historically black college or university or a minority
institution of higher education] or for business development expenses incurred by
the mentor firm under a contract awarded to the mentor firm while participating
in a joint venture with the protégé firm”; and
 added reporting requirements for mentor firms and review requirements for
DOD’s Office of Small Business Programs.
These changes were designed to ensure that DOD “was not paying mentors to help protégés bid
on contracts the protégé would have bid on in any case ... and to stop reimbursing mentors for
sending their protégés to obtain assistance from other federal funded resources.”118
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.119 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.”120 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.121
DOD has provided $424.6 million to mentor firms since the program’s inception through
FY2018. DOD provided $28.3 million to mentor firms in FY2016, $23.2 million in FY2017,
$19.6 million in FY2018, expects to provide $29.8 million in FY2019, and anticipates providing
$31.7 million in FY2020.122

118 U.S. Congress, House Committee on Small Business, Subcommittee on Contracting and Workforce, Maximizing
Mentoring: How are the SBA and DOD Mentor-Protégé Programs Serving Small Businesses?, Hearing Memorandum,
prepared by House Committee on Small Business Staff, 114th Cong., 1st sess., October 26, 2015, p. 9.
119 GAO, 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.
120 GAO, Contract Management: Protégés Value DOD’s Mentor-Protégé Program, but Annual Reporting to Congress
Needs Improvement, p. 7.
121 GAO, Contract Management: Protégés Value DOD’s Mentor-Protégé Program, but Annual Reporting to Congress
Needs Improvement, p. 7.
122 DOD, Office of the Secretary of Defense, “Fiscal Year (FY) 2018 Budget Submission: Defense Wide Justification
Book Volume 1 of 2,” February 2017, Exhibit P-40, Budget Line Item Justification: PB 2017 Office of the Secretary of
Defense, at http://comptroller.defense.gov/Portals/45/Documents/defbudget/FY2018/budget_justification/pdfs/
02_Procurement/OSD_0300D_FY18_PB_FINAL.pdf; DOD, Office of the Secretary of Defense, “Fiscal Year (FY)
2019 Budget Submission: Defense Wide Justification Book Volume 1 of 2,” February 2018, Exhibit P-40, Budget Line
Item Justification: PB 2019 Office of the Secretary of Defense, at http://comptroller.defense.gov/Portals/45/Documents/
defbudget/fy2019/budget_justification/pdfs/02_Procurement/U_PROCUREMENT_MasterJustificationBook_Defense-
Wide_PB_2019.pdf; and DOD, Office of the Secretary of Defense, “Fiscal Year (FY) 2020 Budget Submission:
Defense Wide Justification Book; Procurement: Office of the Secretary of Defense,” March 2019, Exhibit P-40, Budget
Line Item Justification: PB 2020 Office of the Secretary of Defense, at
https://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2020/budget_justification/pdfs/02_Procurement/13_
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Other Agency-Specific Mentor-Protégé Programs
Other agencies, like 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.123 However, small businesses that are not 8(a) firms and other entities may
also be eligible to participate.124
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.125 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.126

0300_OSD_PB2020.pdf.
123 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.”).
124 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).
125 DHS, “Mentor-Protégé Program,” at https://www.dhs.gov/mentor-protege-program; and DHS, “Department of
Homeland Security Acquisition Regulation,” 68 Federal Register 67868-67870, December 4, 2003.
126 DHS, “Mentor-Protégé Program,” at https://www.dhs.gov/mentor-protege-program.
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As of September 15, 2020, DHS had 39 active mentor-protégé agreements involving 32 mentors
and 39 protégés.127 Seven mentors each had 2 protégés, and 25 mentors each had 1 protégé.128
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.”129 Protégé
firms can be small businesses, veteran-owned small businesses, service-disabled veteran-owned
small businesses, HUBZone small businesses, “small disadvantaged businesses,”130 and women-
owned small businesses.131 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).132 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.133
Participant Benefits
Participation as a mentor in the DHS Mentor-Protégé Program may serve as a source selection
factor or subfactor in certain negotiated procurements,134 potentially giving mentor firms an
advantage over nonmentors 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.135 Mentors are also eligible for an annual award presented
by DHS to the firm providing the most effective developmental support to a protégé.136
Recent Developments
H.R. 4727, the Department of Homeland Security Mentor-Protégé Program Act of 2019, passed
by the House by voice vote on December 9, 2019, would, among other provisions, provide

127 DHS, “Mentor-Protégé Companies,” at https://www.dhs.gov/mentor-protege-companies (hereinafter DHS, “Mentor-
Protégé Companies”).
128 DHS, “Mentor-Protégé Companies.”
129 48 C.F.R. §3052.219-71(b)(1).
130 “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.
131 48 C.F.R. §3052.219-71(b)(2).
132 48 C.F.R. §3052.219-71(b)(3).
133 DHS, “Mentor-Protégé Program Details,” at http://www.dhs.gov/xlibrary/assets/opnbiz/osdbu-mentor-protege-
details.pdf.
134 48 C.F.R. §3052.219-72.
135 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.”)
136 DHS, “Mentor-Protégé Program Details,” at https://www.dhs.gov/sites/default/files/publications/Mentor-
Prot%C3%A9g%C3%A9%20Program%20Details_0.pdf.
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statutory authorization for DHS’ Mentor-Protégé Program, allow historically black colleges and
universities and minority institutions of higher education to participate in the program, and
establish an annual reporting requirement concerning the program’s activities and outcomes to the
House Committees on Homeland Security and Small Business.137
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
48 C.F.R. Subpart
businesses; historically black col eges and
performance as mentors
919.70
universities and other minority
Subcontracts awarded to protégés count
institutions of higher learning; women-
(active, SBA approved)
toward subcontracting goals
owned small businesses; service-disabled
veteran-owned small businesses
Department of Health
Small businesses; veteran-owned small
Certain assistance provided to protégés
and Human Services
businesses; service-disabled veteran-
credited toward subcontracting plans
48 C.F.R. §352.219-70
owned small businesses; small
disadvantaged businesses; Historically
(not active)
Underutilized Business Zone (HUBZone)
small businesses; woman-owned small
businesses
Department of State
Small businesses; small disadvantaged
Mentor-protégé agreement may be
48 C.F.R. §619.202-70
businesses; women-owned small
considered in evaluating adequacy of
businesses; HUBZone small businesses;
proposed subcontracting plan and in
(not active)
veteran-owned small businesses; service-
responsibility determinations
disabled veteran-owned small businesses
Agency mentoring award (nonmonetary)
Department of the
Small businesses; women-owned small
Bonus (not to exceed 5% of the relative
Treasury
businesses; 8(a) firms and other small
importance assigned to technical/
48 C.F.R. Subpart
disadvantaged businesses; veteran-owned management factors) credited to mentor in
1019.202-70
small businesses; service-disabled
negotiated procurements
veteran-owned small businesses;
(not active)
Mentor-protégé agreement may be
HUBZone small businesses
considered in evaluating adequacy of
proposed subcontracting plan and in
responsibility determinations
Agency mentoring award (nonmonetary)
Department of
Veteran-owned small businesses; service-
Costs incurred in providing developmental
Veterans Affairs
disabled veteran-owned small businesses
assistance to protégés may be considered
48 C.F.R. Subpart
in determining indirect costs rates for
819.71
reimbursement
(not active)
Evaluation credits during source selection
Factor in evaluating past performance and
determining contractor responsibility
Agency mentoring award (nonmonetary)
Invitation to mentor-protégé annual
conference

137 A companion bill, S. 4251, the Department of Homeland Security Mentor-Protégé Program Act of 2020, was
introduced in the Senate on July 21, 2020.
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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;
Subcontracts awarded to protégés count
FAA Mentor-Protégé
small disadvantaged businesses; service-
toward subcontracting goals
Program available at
disabled veteran-owned small businesses;
Costs incurred in providing developmental
http://www.sbo.faa.gov/
historically black col eges and
assistance to protégés may be considered
MentorProtege.cfm
universities; minority institutions;
women-owned small businesses
in determining indirect costs rates for
(active, SBA approval
reimbursement
not required)
Procurements set aside for firms that are
“participants in the FAA Mentor-Protégé
Program”a
National Aeronautics
Small disadvantaged businesses; women-
May count costs of development assistance
and Space
owned small businesses; HUBZone small
provided to protégés toward
Administration
businesses; veteran-owned small
subcontracting plan
48 C.F.R. Subpart
businesses; service-disabled veteran-
Costs incurred in providing developmental
1819.72
owned small businesses; historically black assistance to protégés may be considered
col eges and universities; minority
(active, SBA approved)
in determining indirect costs rates for
institutions; nonprofit agencies employing reimbursement
persons who are “blind or severely
disabled”
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
Costs incurred in providing developmental
International
small businesses; veteran-owned small
assistance to protégés may be considered
Development
businesses; service-disabled veteran-
in determining indirect costs rates for
48 C.F.R. Subpart
owned small businesses; HUBZone small
reimbursement
719.273
businesses; woman-owned small
Evaluation credits during source selection
businesses
(not active)
Factor in evaluating past performance and
determining contractor responsibility
Agency mentoring award (nonmonetary)
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 generally may not restrict competition absent express statutory
authorization, such set-asides may be limited to small business protégés, as opposed to mentor firms.
DOT Funding Recipients’ Mentor-Protégé Programs
Department of Transportation (DOT) regulations authorize recipients of certain federal
transportation funding 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.”138 These programs are designed “to further the development of DBEs,
including but not limited to assisting them to move into nontraditional areas of work or compete
in the marketplace outside the DBE program, via the provision of training and assistance.”139

138 49 C.F.R. §26.35(b).
139 U.S. Department of Transportation, “DBE Final Rule, Appendix D to Part 26 - Mentor-Protégé Program
Guidelines,” at https://www.transportation.gov/osdbu/disadvantaged-business-enterprise/appendix-d-to-part-26-
mentor-protege-program-guidelines. Recipients of DOT funding are particularly encouraged to use mentor-protégé
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For example, mentors in the Ohio
“Disadvantaged business enterprises,” for
Department of Transportation
purposes of DOT funding programs
Mentor/Protégé Program may assist
protégés by (1) setting targets for
Individuals who belong to one of the fol owing racial or ethnic
groups, or who can prove that they are personally socially
improvement; (2) setting time tables for
disadvantaged, and who have a personal net worth of $1.32
meeting those targets; (3) assisting with
mil ion may qualify as “disadvantaged business enterprises”
the protégé’s business strategies; (4)
upon certification by a state funding recipient:
assisting in evaluating outcomes; (5)
(i) "Black Americans," which includes persons having origins in
assisting in developing protégés’
any of the Black racial groups of Africa; (ii) "Hispanic
business plans; (6) regularly reviewing
Americans," which includes persons of Mexican, Puerto Rican,
Cuban, Dominican, Central or South American, or other
protégés’ business and action plans; and
Spanish or Portuguese culture or origin, regardless of race;
(7) monitoring protégés’ key business
(i i) "Native Americans," which includes persons who are
indicators, including their cash flow,
American Indians, Eskimos, Aleuts, or Native Hawaiians; (iv)
work in progress, and recent bids.140
"Asian-Pacific Americans," which includes persons whose
Those in the Illinois Department of
origins are from Japan, China, Taiwan, Korea, Burma
(Myanmar), Vietnam, Laos, Cambodia (Kampuchea), Thailand,
Transportation Mentor-Protégé Program
Malaysia, Indonesia, the Philippines, Brunei, Samoa, Guam, the
similarly may provide training and
U.S. Trust Territories of the Pacific Islands (Republic of Palau),
development, technical and management
the Commonwealth of the Northern Marianas Islands, Macao,
assistance, personnel, financial
Fiji, Tonga, Kiribati, [T]uvalu, Nauru, Federated States of
Micronesia, or Hong Kong; (v) "Subcontinent Asian
assistance, and equipment to their
Americans," which includes persons whose origins are from
protégés.141
India, Pakistan, Bangladesh, Bhutan, the Maldives Islands, Nepal
or Sri Lanka; (vi) Women; (vii) [a]ny additional groups whose
According to DOT, data concerning the
members are designated as socially and economically
number and performance of DBE
disadvantaged by the SBA, at such time as the SBA designation
mentor-protégé agreements are retained
becomes effective.
at the state level and are not reported to
Source: 49 C.F.R. §26.5; and 49 C.F.R. §26.67.
the DOT.142 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,
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.143
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

programs to assist DBEs in performing work outside of specific fields in which DBEs are “overconcentrated.” 49
C.F.R. §26.33(b).
140 Ohio Department of Transportation Mentor/Protégé Program, p. 5, at https://www.fhwa.dot.gov/resourcecenter/
teams/civilrights/odot_mentor.pdf.
141 Illinois Department of Transportation, Mentor-Protégé Program Guidelines, at
https://idot.illinois.gov/Assets/uploads/files/Doing-Business/Manuals-Guides-&-Handbooks/OBWD/Mentor-
Protege/Mentor%20Protege%20Guidelines%20Revised%202014.pdf.
142 DOT, Office of Small and Disadvantaged Business Utilization, telephone consultation, March 1, 2011.
143 49 C.F.R. Part 26, App’x D, at C.
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provided by the mentor to the protégé.”144 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.”145
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.146 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.147 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.148
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.149 The SBA’s suspension (and later
reinstatement) of a mentor in the 8(a) Mentor-Protégé Program for fraud,150 reports of fraud in
several of the SBA’s contracting programs, and the SBA OIG’s report recommending
improvements in the SBA’s oversight of the All Small Mentor-Protégé Program has also
contributed to congressional interest.151 In addition, GAO has 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.”152 Given these developments, and
SBA’s recent addition of the All Small Mentor-Protégé Program, it seems likely that mentor-
protégé programs will remain subject to congressional oversight or proposed legislation during
the 116th Congress.
Since August 24, 2016, federal agencies sponsoring an agency-specific mentor-protégé program
have been required to report annually to the SBA specific information, such as the number and
type of small business participants, the assistance provided, and the protégés’ progress in

144 49 C.F.R. Part 26, App’x D, at (B)(1).
145 49 C.F.R. Part 26, App’x D, at (B)(2).
146 49 C.F.R. §26.35(b)(2)(i).
147 49 C.F.R. §26.35(b)(2)(ii).
148 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.
149 For additional information and analysis concerning the 8(a) Program, see CRS Report R44844, SBA’s “8(a)
Program”: Overview, History, and Current Issues, by Robert Jay Dilger.
150 CRS Report R44844, SBA’s “8(a) Program”: Overview, History, and Current Issues, by Robert Jay Dilger.
151 CRS Report R44844, SBA’s “8(a) Program”: Overview, History, and Current Issues, by Robert Jay Dilger.
152 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.
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competing for federal contracts.153 This information could prove useful to Congress as it conducts
oversight of these programs.
In addition, Congress could specify additional information that the SBA, and other federal
agencies, must maintain and report annually to Congress concerning their mentor-protégé
programs. For example, DOD has historically been required to report the following information
regarding its mentor-protégé program: (1) the number of mentor-protégé agreements entered into
during the fiscal year; (2) the number of mentor-protégé agreements 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, 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 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.154

153 SBA, “Small Business Mentor Protégé Program,” 81 Federal Register 48590, July 25, 2016.
154 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
Contracts
Subcontracts; suppliers
Subcontracts
Federally funded
focus
contracts
Eligible
Large firms; small
Prime contractors with at
Large prime
Another
mentors
firms; 8(a) graduates;
least one active
contractors
disadvantaged
other 8(a) firms in the subcontracting plan (small
business enterprise
transitional stage
businesses generally
(DBE) or a non-DBE
ineligible)
firm
Eligible
Small disadvantaged
Small disadvantaged
Small businesses;
Small disadvantaged
protégés
businesses
businesses; businesses
veteran-owned small businesses; women-
participating in the
owned and control ed by
businesses; service-
owned small
8(a) Program
Indian tribes, Alaska Native
disabled veteran-
businesses
Corporations or Native
owned small
Hawaiian Organizations;
businesses;
qualified organizations
HUBZone small
employing the “severely
businesses, small
disabled”; women-owned
disadvantaged
and service-disabled veteran-
businesses; women-
owned small businesses;
owned small
HUBZone small businesses
businesses
Notable
Assistance in
Advance and progress
Rent-free use of
Varies by program,
types of
performing prime
payments
facilities or
but can include:
assistance
contracts with the
Award of subcontracts on a
equipment; property training and
government in the
noncompetitive basis
Temporary
development;
form of joint ventures
technical and
Investments in protégé firm
assignment of
Financial assistance in
management
in exchange for ownership
personnel to
the form of equity
assistance; personnel;
interests
protégé for training
investments or loans
financial assistance;
Loans
Financial and
and equipment
Subcontracts
organizational
Assistance in general
Technical or
management
business management,
management
engineering and technical
Overall business
assistance
matters, etc.
management,
planning, and
development
Technical assistance
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Incentives
Assistance counts
Reimbursement of certain
Participation in
Can generally count
for mentor
toward
developmental assistance
mentor-protégé
the amount of
firms
subcontracting goals
costs
program can serve
assistance provided to
Can form joint
Unreimbursed development
as an evaluation
protégés toward goals
venture with protégé
costs credited toward
factor in negotiated
for contracting or
that may be eligible
subcontracting goals
procurements
subcontracting with
for 8(a) and other
DBEs
Can award subcontracts on
Costs incurred in
small business
a noncompetitive basis to
providing assistance
Certain assistance
contracts
the protégé
to protégé count
costs may be
May acquire
toward
reimbursed
ownership of up to
subcontracting goals
40% in protégé firm
Agency award for
Can receive incentives
best mentor
in contract
evaluations
Source: Congressional Research Service, based on various sources cited in this report.

Author Information

Robert Jay Dilger

Senior Specialist in American National Government

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
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Congressional Research Service
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