(Editor’s Note.  Though we always thought one of the key advantages for participants in the mentor-protégé program is that the large company mentor can team with their small business protégés and still be eligible to win small business set-asides.  That ability has come into question recently and the following clears up some of the confusion.)

All Star Services, a large business, and MW Services, a small disadvantaged business, formed a joint venture and won an 8(a) set-aside contract for base maintenance services.   Both were participants in the Small Business Administration’s Mentor-Protégé program where large businesses provide financial and professional assistance to small businesses.  A protest was filed by a disappointed bidder where it cited CFR 124.520 of the regulation creating the Mentor-Protégé program asserting section (d)(1) of the regulation provides that a mentor and protégé may joint venture as a small business only if both qualify as small.  The SBA’s Office of Hearings and Appeals (OHA) said that part of the regulation conflicted with two other provisions of the same rule that authorized joint ventures between the two firms provided the protégé qualifies as small.  It looked at the history of section (d)(1) and stated the proposed rule and all of its preambles also only required the protégé qualify as small and since there was no record of why the change in the final rule occurred the OHA concluded the change was “inadvertent.”  As a result, the OHA concluded the MW-All Star joint venture was eligible for the award because MW qualified as small under the procurement (Size Appeal of Agbayani Const. Corp., SBA No. SIZ-2003-1-13-04).

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