December 18, 2020 Notes

Size Matters: Implementing Post-Agreement Tracking in The All Small Mentor-Protégé Program

Morgan W. Huston

Abstract

Mentor-protégé programs (MPPs) are meant to increase the participation of small businesses in government contracts by pairing small businesses with more experienced government contractors. The Small Business Administration (SBA), which already acts as the largest administrator of such agreements in the federal government, is becoming increasingly dominant in that sphere with the creation of its All Small Mentor-Protégé Program (ASMPP). Studies and audits of the SBA’s MPPs have found various problems with oversight and measuring protégé benefit. In comparison to other federal agencies, the SBA provides a uniquely risky benefit to incentivize businesses to participate as mentors. Large mentors are able to form joint ventures with their small protégés to bid on contracts that are set-aside for small businesses. Additionally, while other agencies measure benefits to protégés for years after program completion (post-agreement tracking), the SBA only measures benefits to protégés during participation and immediately upon program completion (postcompletion reporting). This Note argues that postcompletion reporting does not ensure conformity with program goals, since a protégé’s ability to compete for future contracts on their own without the assistance of the mentor is not known immediately upon program completion. Therefore, Congress should amend the Small Business Act both to make the SBA subject to post-agreement tracking requirements and to enhance the clarity and specificity of the post-agreement tracking requirement currently in place for other agencies administering MPPs. Doing so would implement a measurement of whether protégés are benefitting under the ASMPP as intended and increase uniformity across federal MPPs.

I. Introduction

In October 2010, the U.S. Small Business Administration (SBA) suspended GTSI Corporation, a large contractor, from all federal contracting based on evidence that it had illegally obtained work set aside for small businesses under a $3 billion contracting program.1 GTSI allegedly used two small businesses to secure the set-aside contracts as prime contractors, and then proceeded to front as the small businesses themselves via email to improperly engage in subcontracting work on the contracts.2 Despite this alleged behavior, the suspension was lifted a mere eighteen days later.3 The suspension lift came at a (relatively small) price to GTSI: GTSI had to agree to restrict its activities with small businesses.4 These restrictions included, but were not limited to, discontinuing its participation in the SBA’s mentor-protégé program (MPP) and refraining from the formation of joint ventures with small businesses.5

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