Finally, small business gets a break that may allow them to compete better and stay within their size standards longer. The 8(a) Mentor-Protege program through DOD agencies has been around for years, and has helped accelerate growth of 8(a) companies, who only have 9 years to get traction in the federal contracting industry, but there wasn’t a program for non-8(a) firms.
In October 2016, the SBA started accepting applications for the All-Small Mentor Protege program, which allows small businesses to form joint ventures to pursue federal work. The protege must qualify as small for the procurement, and can go after the set-aside type that their company holds. For example, if the mentor firm is small business, and the protege is SDVOSB (Service Disabled Veteran Owned Small Business), then the JV can go after SDVOSB set-asides.
- Each firm completed their application and uploaded it.
- Her SBA office in Miami reviewed the application.
- Both firms completed online training programs, then uploaded their certificates.
- They joined over 200 companies already approved under the SBA’s All-Small Mentor-Protege program.
Compared to the 8(a) Mentor-Protege program that Kizzy considered applying for, this was locally approved, with much less paperwork, and without the complications of getting a much larger firm to take on the mentoring responsibilities. She has formed several Joint Ventures (JVs) already, just months after her May 2017 approval date.
The All Small Mentor-Protege program could easily be a game changer in the government contracting space. So many GovCon entrepreneurs that I talk to are routinely working together, through informal mentoring – all committed to “just helping out someone so get past all the hurdles in GovCon.” So creating a way to formalize these relationships of helping each other, and has created new opportunities.
Here are some of the reasons you’d want to consider the All Small Mentor-Protege program.
- Less financial risk being a subcontractor to another small business
- Allows existing teaming relationships to be readily rolled into a peer relationship instead of a prime-sub relationship
- Less capital required to form the JVs
- Reduced complexity of accounting, billing
This leads me to my next thought: Why I LOVE Joint Ventures!
- When you form an unpopulated Joint Venture, the JV has no employees.
- The JV partners do the work within their own companies, and the JV is treated just like any other government contract in their accounting system.
- Employees in the JV partner companies perform the work and complete their timesheets.
- The accounting department at each JV sends an invoice to the JV.
- The group responsible for accounting at the JV combines the invoices from the partners and bills the JVs client. Contact me for options on how this can be set up.
- When the JV receives payment of the client’s invoice, the JV pays each JV partner’s invoice.
Not convinced yet? Want to hear more? Richard Arnholt of Bass Berry Sims will be presenting on this topic on Thursday, August 17 at CWU offices in Tampa. Connect with me, Jenny W Clark, if you’d like more information or an invitation. You can also reach me at 256-882-6276 or e-mail me at email@example.com.