The SBA’s new “small business mentor-protégé program” is causing quite a stir. As we covered yesterday, the new final rule opens the door for all small businesses (not just those in the 8(a) program) to receive assistance from large business mentors – and more importantly – to form mentor-protégé joint ventures to compete for small business set-aside contracts (including those offered under the SBA’s socioeconomic programs, such as WOSB, SDVOSB, and HUBZone) without the danger of affiliation.
This new program is a game-changer for small business owners. Now, instead of competing for set-aside work against fellow small businesses, you might find yourself up against a JV backed by the might of a large business. The result is an uneven playing field where a “true” small business is up against a stacked deck. There is also a paradigm shift for large business owners, as the SBA is now offering unprecedented access to set-aside contracts previously reserved for performance by only small businesses.
The first instinct for many will be to rush out and find a dance partner. That is, another business — large or small, as the case may be — to team with so that you’ll be on even footing when competing for those small business set-aside contracts.
But is a teaming arrangement right for your business? We suggest thinking strategically and looking before you leap.
Long before the SBA announced its new program, teaming arrangements presented an avenue for businesses (and, in particular, large and small teammates) to uncover new contracting opportunities. But just because you can get new work through teaming doesn’t necessarily mean that you should.
Before jumping into a new project delivery team, Federal contractors (both large and small) should consider intangibles like chemistry, communication, and cooperation. Teaming with a business that does not share your corporate values, risk tolerance, or project management approach will undoubtedly negatively affect project performance – and, eventually, your bottom line.
For example, in order to participate in the new SBA program, the parties must submit a written Mentor-Protégé Agreement for review and approval by the SBA. The Agreement should address the small business protégé’s needs, as well as when and how the large business mentor will address those needs.
This Agreement should not be hastily pulled together to make sure that your new JV is first-in-line when the program opens for business next month. Instead, we recommend a thoughtful process that considers the wants-and-needs of both the large and small teammate. A solid foundation will make sure both sides start off on the right foot and have a clear picture of how the relationship will unfold (and hopefully continue).
If you are interested in learning more about successful Federal project delivery teaming, I recommend taking a look at the slides from my recent presentation on the subject. They may help you find the right path if you are considering jumping into the new mentor-protégé pool.