Mentor-Protege Programs Have Policies That Aim to Benefit Participants but Do Not Require Postagreement Tracking
Gao ID: GAO-11-548R June 15, 2011A mentor-protege program is an arrangement in which mentors--businesses, typically experienced prime contractors--provide technical, managerial, and other business development assistance to eligible small businesses, or protege. In return, the programs provide incentives for mentor participation, such as credit toward subcontracting goals, additional evaluation points toward the awarding of contracts, an annual award to the mentor providing the most effective developmental support to a protege, and in some cases, cost reimbursement. Overall, mentor-protege programs seek to enhance the ability of small businesses to compete more successfully for federal government contracts by furnishing them with assistance to improve their performance. We identified 13 federal agencies that currently have mentor-protege programs including the Department of Homeland Security (DHS), Department of Defense (DOD), Department of Energy (DOE), Department of State (DOS), Environmental Protection Agency (EPA), Federal Aviation Administration (FAA), General Services Administration (GSA), Department of Health and Human Services (HHS), National Aeronautics and Space Administration (NASA), Small Business Administration (SBA), Department of the Treasury (Treasury), United States Agency for International Development (USAID), and the Department of Veterans Affairs (VA). The Small Business Jobs Act of 2010 required that we conduct a study on federal mentor-protege programs to determine whether they are effectively supporting the goal of increasing small business participation in federal government contracting. This letter summarizes a March 2011 briefing we provided to congressional staff on the results of this work. It also includes updated information on the number of active mentor-protege agreements reported by each agency as of March 2011 and additional audit work we conducted following the briefing on protege postcompletion information. Our objectives were to (1) describe the policies and procedures for administering and monitoring federal mentor-protege programs; (2) identify controls used to help ensure that mentor-protege programs are beneficial to program participants and eligibility requirements are being met; and (3) determine if information is available on whether proteges have become able to compete for federal contracts without the assistance of a mentor.
All 13 federal agencies with mentor-protege programs have established policies and procedures for administering and monitoring their programs. These policies and procedures are codified in regulatory guidance--such as the Federal Acquisition Regulation (FAR), agency supplemental-acquisition regulations, and program guidance--and are similar across most agencies. For example, all agencies have similar guidance that require the participants to develop a mentor-protege agreement and to provide regular progress reports on the status of the mentoring agreement. Additionally, most agencies have similar guidance regarding the agency's noninvolvement in the partnering of mentors with proteges, as well as requirements for agencies to conduct periodic reviews. Despite similarities in program guidance, some differences exist. For example, different agencies have varying guidance regarding the length of mentor-protege agreements and whether proteges are allowed to have more than one mentor. Controls exist at all 13 federal agencies with mentor-protege programs to help ensure that mentors and proteges meet eligibility criteria and benefit from participation in the program. Generally, a mentor may be either a large or small business, must be eligible for award of a government contract, and must be able to provide developmental assistance to enhance the capabilities of proteges. Agencies verify that these criteria are met by checking whether the mentor is on the "suspended" or "debarred" list and by requiring that mentors demonstrate their ability to provide the developmental assistance to the protege upon entry into the program. Additionally, some agencies require their mentors to be current prime contractors or subcontractors with the agency. To qualify as a protege under the program, all agencies require that the protege be a small business (based on its primary North American Industrial Classification System code) and also be eligible to receive federal government contracts. While some agencies, such as SBA and VA, are specific about the types of small businesses that are eligible to participate in their program, most agencies accept various types of small businesses as proteges. Most federal mentor-protege programs do not collect information on proteges after the conclusion of their mentor-protege agreements; therefore, little information is available on the success of proteges after participating in the program. Of the 13 federal agencies we identified with mentor protege programs, only 3 agencies--DOD, NASA, and USAID--have policies in place to collect information on proteges after their mentor-protege agreements have terminated. They each require proteges to submit a postcompletion report on their employment and revenue statistics annually for 2 years upon completion of the program. However, only DOD is required by statute to collect such information on proteges after they exit the program. Specifically, under DOD's program, proteges are required to report its progress annually for 2 years after exiting the program, including any successes that can be attributed to its participation in the program, such as in employment, annual revenue, and annual participation in DOD contracts. DOD is required to conduct annual performance reviews of the postcompletion information reported by proteges. To more fully evaluate the effectiveness of their mentor-protege programs, we recommend that the Office of Small and Disadvantaged Business Utilization (OSDBU) and Mentor-Protege Program Directors of DHS, DOE, DOS, EPA, FAA, GSA, HHS, SBA, Treasury, and VA consider collecting and maintaining protege postcompletion information.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: William B. Shear Team: Government Accountability Office: Financial Markets and Community Investment Phone: (202) 512-4325GAO-11-548R, Mentor-Protege Programs Have Policies That Aim to Benefit Participants but Do Not Require Postagreement Tracking
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GAO-11-548R:
United States Government Accountability Office:
Washington, DC 20548:
June 15, 2011:
The Honorable Mary L. Landrieu:
Chair:
The Honorable Olympia J. Snowe:
Ranking Member:
Committee on Small Business and Entrepreneurship:
United States Senate:
The Honorable Sam Graves:
Chairman:
The Honorable Nydia M. Velázquez:
Ranking Member:
Committee on Small Business:
House of Representatives:
Subject: Mentor-Protégé Programs Have Policies That Aim to Benefit
Participants but Do Not Require Postagreement Tracking:
A mentor-protégé program is an arrangement in which mentors--
businesses, typically experienced prime contractors--provide
technical, managerial, and other business development assistance to
eligible small businesses, or protégés. In return, the programs
provide incentives for mentor participation, such as credit toward
subcontracting goals, additional evaluation points toward the awarding
of contracts, an annual award to the mentor providing the most
effective developmental support to a protégé, and in some cases, cost
reimbursement. Overall, mentor-protégé programs seek to enhance the
ability of small businesses to compete more successfully for federal
government contracts by furnishing them with assistance to improve
their performance. We identified 13 federal agencies that currently
have mentor-protégé programs including the Department of Homeland
Security (DHS), Department of Defense (DOD), Department of Energy
(DOE), Department of State (DOS), Environmental Protection Agency
(EPA), Federal Aviation Administration (FAA), General Services
Administration (GSA), Department of Health and Human Services (HHS),
National Aeronautics and Space Administration (NASA), Small Business
Administration (SBA), Department of the Treasury (Treasury), United
States Agency for International Development (USAID), and the
Department of Veterans Affairs (VA).
The Small Business Jobs Act of 2010 required that we conduct a study
on federal mentor-protégé programs to determine whether they are
effectively supporting the goal of increasing small business
participation in federal government contracting.[Footnote 1] This
letter summarizes a March 2011 briefing we provided to your staff on
the results of this work (see enclosure I for the briefing slides). It
also includes updated information on the number of active mentor-
protégé agreements reported by each agency as of March 2011 and
additional audit work we conducted following the briefing on protégé
postcompletion information. Our objectives were to (1) describe the
policies and procedures for administering and monitoring federal
mentor-protégé programs; (2) identify controls used to help ensure
that mentor-protégé programs are beneficial to program participants
and eligibility requirements are being met; and (3) determine if
information is available on whether protégés have become able to
compete for federal contracts without the assistance of a mentor.
To address our objectives, we reviewed applicable regulations, polices
and procedures, prior GAO and SBA Inspector General reports, and other
agency guidance for administering and monitoring the mentor-protégé
programs. In addition, we reviewed other documentary information on
mentor-protégé agreements, mentor incentives, benefits to protégés,
eligibility requirements, agency performance reviews, and measurements
of the programs' performance. We interviewed agency officials and
select industry-group representatives regarding controls and program
oversight, as well as each agency's program objectives, types of
mentor-protégé agreements, program requirements, and application
review and approval processes. We also reviewed available information
provided by agency officials on the extent to which protégés become
able to compete for federal contracts without the assistance of a
mentor, including any available information on additional protégé
contracting and subcontracting opportunities. Finally, we interviewed
agency officials and collected available information on what, if any,
data is collected and maintained on protégés at the conclusion of the
mentor-protégé relationship, as well as any implications and costs for
the agencies associated with collecting and maintaining information on
protégés after completion of the mentor-protégé program. We determined
that the data we obtained from agency officials were reliable for the
purposes of this report based on our audit objectives.
In accordance with the statute, we focused on SBA and the 12 other
federal agencies we identified as having a mentor-protégé program. As
agreed with your offices, we focused on policies and procedures the
agencies have put in place to administer and monitor the mentor-
protégé programs and controls to help ensure the programs are
beneficial to participants. As agreed, we did not conduct testing on
how well the program controls were operating because of the number of
agencies with a mentor-protégé program and the associated time frame
for completing our work to satisfy the mandate requirement.
We conducted this performance audit from October 2010 through June
2011 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
Background:
The first mentor-protégé program--the DOD Pilot Mentor-Protégé
Program--was established by DOD as a pilot under the National Defense
Authorization Act for Fiscal Year 1991. Since the pilot program was
authorized, it has been continuously extended.[Footnote 2] The largest
program--the SBA 8(a) Mentor-Protégé Program--was established in 1998.
It is offered under SBA's 8(a) Business Development Program, which is
one of the federal government's primary vehicles for developing small
businesses owned and controlled by socially and economically
disadvantaged individuals. Firms in SBA's 8(a) program receive SBA
technical assistance and management training and may be eligible for
contracts that federal agencies set aside for 8(a) firms. SBA's mentor-
protégé program serves as an additional developmental tool for 8(a)
participants. Protégés in SBA's mentor-protégé program must also be
participants in its 8(a) program.
In general, the Office of Small and Disadvantaged Business Utilization
(OSDBU) at each agency is responsible for mentor-protégé program
management and administration, and some agencies also coordinate the
program with their contracting offices.[Footnote 3] The one exception,
however, is SBA's Mentor-Protégé Program, which is administered by its
Office of Business Development through SBA's district offices and does
not involve an OSDBU. At agencies other than SBA, mentors and protégés
interested in becoming approved program participants submit an
application to the OSDBU for review and approval. Upon receipt, the
application is evaluated on the extent to which the mentor plans to
provide developmental assistance to the protégé. In general, mentors
and protégés are responsible for identifying and selecting each other
prior to entering the program.
As part of the process, mentors and protégés are required to jointly
develop a tailored developmental assistance plan, which is set forth
in a "mentor-protégé agreement" that is also submitted to OSDBU
officials who, in turn, determine the agreement's compliance with
specific agency requirements. The mentor-protégé agreement authorizes
a broad array of developmental assistance, such as (a) training in the
areas of production, quality control, manufacturing, engineering, and
computer hardware and software; (b) assistance in obtaining production
and accounting certifications needed to work on large federal
government contracts; (c) contract administration; and (d) overall
general business management skills and organizational management.
Additionally, some agencies' programs allow mentors to provide loans
and can award subcontracts on a noncompetitive basis.
Generally, the responsible OSDBU officials periodically review the
mentor-protégé agreement to help ensure that the terms of the
agreement are being fulfilled, developmental assistance is being
provided as agreed, and mentors and protégés comply with all agency
requirements. The length of the mentor-protégé agreement varies by
agency--usually from 1 to 3 years--and some agencies allow the
agreement to be extended upon approval. However, some agencies have no
fixed terms and, instead, limit the term of the agreement through
negotiation or by tying the length of the agreement to the length of a
contract. Participation in the mentor-protégé program also varies by
agency. Figure 1 displays the number of mentor-protégé agreements
across the federal government, as of March 31, 2011, which ranged from
482 at SBA to 4 at EPA.
Figure 1: Number of Mentor-Protégé Agreements by Federal Agency, as of
March 2011:
[Refer to PDF for image: vertical bar graph]
Agency: SBA;
Number of Mentor-Protégé Agreements: 482.
Agency: DHS;
Number of Mentor-Protégé Agreements: 220.
Agency: DOE;
Number of Mentor-Protégé Agreements: 120.
Agency: DOD;
Number of Mentor-Protégé Agreements: 101.
Agency: DOS;
Number of Mentor-Protégé Agreements: 86.
Agency: GSA;
Number of Mentor-Protégé Agreements: 65.
Agency: TREAS;
Number of Mentor-Protégé Agreements: 58.
Agency: VA;
Number of Mentor-Protégé Agreements: 24.
Agency: NASA;
Number of Mentor-Protégé Agreements: 12.
Agency: FAA;
Number of Mentor-Protégé Agreements: 10.
Agency: HHS;
Number of Mentor-Protégé Agreements: 9.
Agency: USAID;
Number of Mentor-Protégé Agreements: 6.
Agency: EPA;
Number of Mentor-Protégé Agreements: 4.
Source: GAO compilation based on information reported by agencies with
a mentor-protégé program.
[End of figure]
Similar Policies and Procedures Exist in Most Federal Mentor-Protégé
Programs:
All 13 federal agencies with mentor-protégé programs have established
policies and procedures for administering and monitoring their
programs. These policies and procedures are codified in regulatory
guidance--such as the Federal Acquisition Regulation (FAR), agency
supplemental-acquisition regulations, and program guidance--and are
similar across most agencies. For example, all agencies have similar
guidance that require the participants to develop a mentor-protégé
agreement and to provide regular progress reports on the status of the
mentoring agreement. Additionally, most agencies have similar guidance
regarding the agency's noninvolvement in the partnering of mentors
with protégés, as well as requirements for agencies to conduct
periodic reviews.
Despite similarities in program guidance, some differences exist. For
example, different agencies have varying guidance regarding the length
of mentor-protégé agreements and whether protégés are allowed to have
more than one mentor.[Footnote 4] Some notable differences in the
policies of 3 agencies bear specific mention: DOD, SBA, and FAA.
* The DOD mentor-protégé program is the only mentor-protégé program
mandated by law and receiving appropriated funding. DOD's program
offers two major types of mentor-protégé agreements--credit and direct
reimbursement--and although there are several different participating
military services and defense agencies that administer their own
mentor-protégé programs separately, they each share DOD regulations
and policies.[Footnote 5] Along with DOE and FAA, DOD's mentor-protégé
program is one of only three programs that offer cost reimbursement as
an incentive for mentor participation.
* SBA's mentor-protégé program permits a waiver of the affiliation
rule for joint ventures between mentors and 8(a) protégés, allowing
them to jointly pursue 8(a) contracts set aside for small businesses
without the two firms being considered "affiliated" for purposes of
SBA's small-business size standards. Additionally, the Small Business
Jobs Act of 2010 granted SBA authority to establish new mentor-protégé
programs for small businesses owned and controlled by service-disabled
veterans and women and for HUBZone small businesses, modeled on SBA's
current program for its 8(a) participants.
* FAA's mentor-protégé program is the only mentor-protégé program that
is not subject to the FAR and other related acquisition and
procurement statutes and regulations.[Footnote 6] As previously noted,
FAA's mentor-protégé program is one of only three programs that offer
cost reimbursement as an incentive for mentor participation.
Controls Exist to Help Ensure Participants Are Eligible and Benefit
from Program Participation:
Controls exist at all 13 federal agencies with mentor-protégé programs
to help ensure that mentors and protégés meet eligibility criteria and
benefit from participation in the program. Generally, a mentor may be
either a large or small business, must be eligible for award of a
government contract, and must be able to provide developmental
assistance to enhance the capabilities of protégés. Agencies verify
that these criteria are met by checking whether the mentor is on the
"suspended" or "debarred" list and by requiring that mentors
demonstrate their ability to provide the developmental assistance to
the protégé upon entry into the program. Additionally, some agencies
require their mentors to be current prime contractors or
subcontractors with the agency. To qualify as a protégé under the
program, all agencies require that the protégé be a small business
(based on its primary North American Industrial Classification System
code) and also be eligible to receive federal government contracts.
While some agencies, such as SBA and VA, are specific about the types
of small businesses that are eligible to participate in their program,
most agencies accept various types of small businesses as protégés.
[Footnote 7]
Each of the mentor-protégé programs also have various reporting
requirements that must be met by mentors and protégés during the
course of the program which provide information on the protégé's
growth, costs and expenditures, and completion of specific
developmental activities. Generally, the agencies require that these
reports be submitted annually or semiannually, either jointly by both
the mentor and protégé or independently by the mentor only or the
protégé only. Some agencies also require that the mentor and protégé
provide a formal briefing (either interim or at the conclusion of the
program) regarding any accomplishments or a "lessons-learned
evaluation" upon completion of the program.
To help ensure that protégés benefit from participation in the mentor-
protégé program, most agencies conduct periodic annual reviews and
compare the progress reported on by the mentor and protégé with the
milestones established in the mentor-protégé agreement. By doing so,
the agencies can gain assurance that the terms of the agreement are
being fulfilled, developmental assistance is being provided as agreed,
and protégés are benefiting from their participation in the program.
Agencies may also conduct site visits or receive informal protégé
reporting on any dissatisfaction with the developmental assistance
being provided. If the protégé reports any such dissatisfaction, an
agency generally has recourse to withhold approval of the continuation
of the mentor-protégé agreement if it finds that the mentor has not
provided the agreed-upon developmental assistance or if the assistance
has not resulted in any material benefits to the protégé. However,
according to agency officials, this rarely occurs.
Moreover, as part of SBA's individual efforts to help ensure that its
8(a) program is beneficial to participants and is not just a mechanism
to enable participants (presumably large businesses) that would not
otherwise qualify under the program to receive contracts, SBA recently
added to its program controls. Specifically, SBA published a final
rule on February 11, 2011, that revised its 8(a) program regulations,
including those for its mentor-protégé program and joint ventures.
Among other things, the revised regulations (1) add consequences for a
mentor that does not provide its protégé the assistance required by
their agreement, including stop-work orders and potential debarment;
(2) require SBA's 8(a) participants in a joint venture to perform at
least 40 percent of the work done by the joint venture, including work
awarded under a mentor-protégé agreement; and (3) generally prohibit a
non-8(a) participant to a joint venture, or its affiliates, from
acting as a subcontractor on any 8(a) contracts.
Most Federal Mentor-Protégé Programs Do Not Collect Postagreement
Information on Protégé Success:
Most federal mentor-protégé programs do not collect information on
protégés after the conclusion of their mentor-protégé agreements;
therefore, little information is available on the success of protégés
after participating in the program.[Footnote 8] Of the 13 federal
agencies we identified with mentor protégé programs, only 3 agencies--
DOD, NASA, and USAID--have policies in place to collect information on
protégés after their mentor-protégé agreements have terminated.
[Footnote 9] They each require protégés to submit a postcompletion
report on their employment and revenue statistics annually for 2 years
upon completion of the program. However, only DOD is required by
statute to collect such information on protégés after they exit the
program. Specifically, under DOD's program, protégés are required to
report its progress annually for 2 years after exiting the program,
including any successes that can be attributed to its participation in
the program, such as in employment, annual revenue, and annual
participation in DOD contracts[Footnote 10]. DOD is required to
conduct annual performance reviews of the postcompletion information
reported by protégés.
Additionally, Congress required DOD to report annually on trends in
the progress made in employment, revenues, and participation in DOD
contracts of both protégés and former protégés.[Footnote 11] For
example, in its annual report to Congress for fiscal year 2009, DOD
noted that while the 61 former protégés providing postcompletion
reports experienced a cumulative decrease in annual revenue and number
of employees (which may have been the result of broader economic
conditions), they experienced an average increase in number and dollar
amount of DOD prime-contract and subcontract awards. They also
experienced an average increase in the dollar amount of total federal
subcontract awards following completion of program.[Footnote 12]
Similarly, in its fiscal year 2008 annual report, DOD noted that 33
former protégés experienced a cumulative increase in annual revenue
and number of employees and an average dollar increase in DOD prime
contracts and subcontracts since program completion.[Footnote 13]
Congress required that DOD collect and report this information in
order to help ensure that its mentor-protégé program is focused on a
results-oriented approach to assessing program performance. DOD
estimates that it has a total annual cost of about $51,000 related to
the collection of postcompletion information reported to Congress,
including one full-time procurement technician to request and maintain
information on all protégé postcompletion reports, and a supervisor to
review the data for abnormalities such as a significant change in
revenue.
As stated earlier, NASA and USAID both have policies in place to
collect information on protégés after their mentor-protégé agreements
have expired. However, because both NASA's and USAID's mentor-protégé
programs are relatively new, information on the protégés' progress in
the 2 years following completion of the program is not yet available.
Officials from both agencies noted the importance of protégé
postcompletion information in helping to determine whether the
knowledge and skills obtained by the protégé during the mentoring
agreement are sustainable beyond the term of the agreement. For
example, USAID officials stated that information on the protégé's
progress following completion of the program is important to them,
particularly given its procurement timelines, because benefits
resulting from the developmental assistance protégés obtain may not
always be readily apparent during the life of the agreement.
As noted previously, the remaining 10 federal agencies--DHS, DOE, DOS,
EPA, FAA, GSA, HHS, SBA, Treasury, and VA--do not have policies and
procedures in place to collect protégé postcompletion information.
Most agency officials told us that while the information they
currently collect on protégés during the course of a mentor-protégé
agreement help to determine the overall success of their program,
postcompletion information could also be useful.[Footnote 14] An
official at one agency expressed concern that this information could
be misleading because there is no assurance that a protégé's ability
to compete and, ultimately, win federal contracts can be attributed to
its participation in the mentor-protégé program. While changes in
contracts awarded could reflect existing economic or industry
conditions upon program completion, this is also true for data
collecting during the mentor-protégé agreement as well.
However, the potential benefits would have to be weighed against
potential costs. Without having the experience of collecting and
maintaining protégé postcompletion information, the officials were
largely unable to provide estimates of the cost for implementing a
process for collecting and maintaining the information. While some
agency officials said that total costs associated with postcompletion
reporting were unknown, they said they likely would include increased
costs both in funds expended and manpower used. In addition, one
official noted that the collection of postcompletion information for
protégés could be complicated and time consuming. Conversely, a small
number of agency officials believed the costs for collecting and
maintaining protégé postcompletion information would be minimal or
negligible, because they viewed the collection of postcompletion
information as an extension of their current reporting processes that
could be readily implemented with existing resources.
As noted previously, most agencies have policies and reporting
requirements to help ensure that protégés are benefiting from
participation in their mentor-protégé programs. To determine overall
success, the agencies collect information during the term of the
agreement. However, postagreement data collection can provide
additional information for agencies to use to ensure that their
programs are benefiting the protégés as intended.
Conclusions:
While mentor-protégé programs have policies, procedures, and controls
that aim to help ensure that participants benefit, information on the
degree to which protégés are able to compete for contracts without the
mentor is generally not available because most agencies do not collect
information on protégé progress after the conclusion of their mentor-
protégé agreements. Instead, most agencies rely on information
collected during the term of the agreement to determine the
effectiveness of the program. Specifically, of the 13 federal agencies
with mentor-protégé programs, only 3--DOD, NASA, and USAID--have
policies in place to collect information on protégé progress after the
mentor-protégé agreements have terminated. While NASA and USAID have
not yet collected data because their programs are relatively new, both
have stated the importance of protégé postcompletion information in
helping to determine whether the knowledge and skills obtained by the
protégé during the mentoring agreement are sustainable beyond the term
of the agreement. Moreover, Congress requires DOD to collect and
report on postcompletion performance as one way to better ensure the
effectiveness of the program. Although there is some uncertainty
surrounding the total costs involved in collecting and maintaining
postcompletion information, many agencies thought that, in addition to
the information they currently collect on protégés during the course
of the agreement, the postcompletion information could also be useful
to the overall success of their programs. Without protégé
postcompletion information, the agencies may miss the opportunity to
obtain additional information that could be used to help them further
assess the success of their programs and help ensure that small
businesses are benefiting from participation in the programs as
intended.
Recommendations for Executive Action:
To more fully evaluate the effectiveness of their mentor-protégé
programs, we recommend that the OSDBU and Mentor-Protégé Program
Directors of DHS, DOE, DOS, EPA, FAA, GSA, HHS, SBA, Treasury, and VA
consider collecting and maintaining protégé postcompletion information.
Agency Comments and Our Evaluation:
We provided a draft of this letter and the attached briefing slides to
each of the 13 agencies we identified as having a mentor-protégé
program for their review and comment: DHS, DOD, DOE, DOS, EPA, FAA,
GSA, HHS, NASA, SBA, Treasury, USAID, and VA. Five of the 13--DHS,
DOE, DOS, Treasury, and VA--provided written comments, which are
reprinted in enclosures II, III, IV, V, and VI respectively. In
addition, GSA provided oral comments, while DOD, HHS, and SBA provided
their comments electronically. Finally, EPA, FAA, NASA, and USAID
stated that they had no comments on our draft letter.
Our recommendation that the OSDBU and Mentor-Protégé Program Directors
consider collecting and maintaining protégé postcompletion information
was addressed to 10 of the 13 agencies in our review. Six of these 10--
DHS, DOE, GSA, HHS, Treasury, and VA--generally agreed with our
recommendation:
* DHS concurred with our recommendation, noting that it would consider
following the DOD model by requiring protégés to report their progress
annually for 2 years after exiting the program, including providing
information on annual revenue, number of employees, and participation
in DHS and other government contracts. Consistent with our
recommendation, DHS stated that the potential benefits of collecting
and maintaining this information would have to be weighed against
potential costs.
* DOE stated in its written comments that the department believes that
protégé postcompletion information may be useful, along with other
factors, in determining the success of the program and said that it
will collect this information for protégés that are still small in
their primary North American Industrial Classification System code
when they graduate from the program. However, DOE commented that our
conclusions focused only on postagreement data collection, which may
lead a reader to assume that the collection of such data is the most
important element of assessing a program's success. DOE stated that
it, like other agencies, measures success for its mentor-protégé
program through a semiannual review process in which it assesses
various factors, including the number of contracts received by the
protégé at both the prime and subcontract level, a protégé's profit
margin, and the mentor's and protégé's overall satisfaction with the
mentoring experience. We recognize that federal agencies use various
performance measures to determine the success of their mentor-protégé
programs. However, most agency officials told us that postcompletion
information could also be useful. We clarified our discussion of our
findings in this area in response to DOE's comments.
* GSA and HHS generally concurred with our recommendation.
* Treasury concurred with our recommendation, noting that it would
implement a postagreement reporting requirement for firms exiting its
mentor-protégé program beginning in fiscal year 2012. Treasury stated
that protégé firms will be required to submit postagreement reports 24
months after exiting the program and noted that approximately 30
mentor-protégé agreements are due to expire in fiscal year 2012.
* VA generally agreed with our conclusions and concurred with our
recommendation, noting that its mentor-protégé program currently
requires both the mentor and protégé to prepare an evaluation upon
completion of the program. VA stated that it will add in the
department's mentor-protégé guidebook a requirement to collect data
from the protégé for 1 year after completing the program in order to
evaluate the effectiveness of the program and the protégé's ability to
compete on federal procurements without the assistance of a mentor.
Although SBA stated in its comments that it agreed with a
recommendation to collect and maintain information related to firms'
activity following the completion of the mentor-protégé relationship,
it did not agree with the recommendation as worded in our draft letter
because it thought the recommendation would lead to the conclusion
that all mentor-protégé programs have the same objective. SBA stated
that its mentor-protégé program is a business-development tool used
for the purpose of assisting the protégé in overcoming management and
operational deficiencies that hinder its growth, development, and
ultimate long-term success. SBA also stated that the ability to obtain
contracts under its program is based on a separate joint-venture
agreement under the mentor-protégé agreement and is only one form of
assistance provided under the mentor-protégé agreement. SBA noted that
mentor-protégé agreements based solely on facilitating access to
government contracts are not allowed under its program. Our
recommendation is not intended to imply that all mentor-protégé
programs have the same objective, but rather is based on the fact that
most programs currently do not collect information on protégés after
the conclusion of the mentor-protégé agreement which could be used to
help determine the overall success of these programs. We clarified the
wording of our recommendation in response to SBA's comments.
In addition, while DOS partially agreed with our recommendation and
stated that it would initiate postprogram monitoring of its former
protégé firms if such a policy were to be implemented, it also stated
that it recommends against implementing increased reporting
requirements at this time. It expressed concerns that postprogram data
collection would increase the burden on all parties without adding
significant value to the existing program. DOS also expressed concern
about the impact that postcompletion reporting could have on the
department, mentor firms, and protégé firms. In addition, DOS stated
that participating firms would face additional reporting burdens that
would be counterproductive and could discourage mentors from serving
in its program. DOS also cited budgetary implications that the
department would face, as it would have to increase staffing to
collect and monitor the collection of protégé postcompletion
information. As we note in the letter, agencies would have to weigh
the impact of collecting and maintaining protégé postcompletion
information against the potential benefits, which were acknowledged by
most agencies we spoke with, including an agency that is already
required to collect such information. While we understand DOS's
concerns, as we note in the letter, without this type of information,
agencies may miss the opportunity to obtain additional information
that could be used to help them further assess the success of their
programs and help ensure that small businesses are benefiting from
participation in the programs as intended. Therefore, we continue to
believe that DOS should consider collecting postprogram data.
Finally, DOD, which is required to collect postprogram data on its
mentor-protégé programs, told us that they concurred with our findings
and suggested that the managers for the 13 mentor-protégé programs
form an advisory council or working group to meet monthly and examine
best practices and lessons learned to improve their agency programs
and protégé growth. We encourage DOD's manager to pursue this idea
with the other managers as a way to share information, best practices,
and lessons learned. Given DOD's experience with postprogram data
collection, it may be able to provide valuable insights to the other
agencies about its experience.
We are sending copies of this report to interested members of Congress
and agency administrators at DHS, DOD, DOE, DOS, EPA, FAA, GSA, HHS,
NASA, SBA, Treasury, USAID, and VA. In addition, this report will be
available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov].
If you or your staffs have any questions about this report, please
contact me at (202) 512-8678 or shearw@gao.gov. Contact points for our
Office of Congressional Relations and Public Affairs may be found on
the last page of this report. Major contributors to this report were
Marshall Hamlett, Assistant Director; Michelle Bowsky, Farah
Angersola, Edwin Yuen, Tania Calhoun, and Jennifer Schwartz.
Signed by:
William B. Shear:
Director, Financial Markets and Community Investment:
Enclosures:
[End of section]
Enclosure I: Briefing to the Committee on Small Business and
Entrepreneurship, U.S. Senate and Committee on Small Business, House
of Representatives:
Federal Mentor-Protégé Programs:
Briefing to Senate Small Business and Entrepreneurship Committee
and House Small Business Committee:
March 2011:
Introduction:
The Small Business Jobs Act of 2010 (P.L. 111-240) requires that GAO
conduct a study of federal mentor-protégé programs to determine
whether they are effectively supporting the goal of increasing small
business participation in federal government contracting.
A mentor-protégé program is an arrangement in which mentors”-
businesses, typically experienced prime contractors-”provide
technical, managerial, and other business development assistance to
eligible small businesses, or protégés. Overall, the programs seek to
enhance the ability of small businesses to compete more successfully
for federal government contracts by furnishing them with assistance to
improve their performance.
In return, the programs provide incentives for mentor participation,
such as credit towards subcontracting goals, additional evaluation
points towards the awarding of contracts, annual mentor awards to the
mentor providing the most effective developmental support to a
protégé, and, in some cases, cost reimbursement.
Thirteen federal agencies currently have mentor-protégé programs.
Federal Mentor-Protégé Programs, by Year of Program Implementation:
* Department of Defense (DOD), 1991;
* Environmental Protection Agency (EPA), 1994;
* Department of Energy (DOE), 1995;
* National Aeronautics and Space Administration (NASA), 1995* (Program
revamped in 2008);
* Federal Aviation Administration (FAA), 1996;
* Small Business Administration (SBA), 1998;
* Department of Homeland Security (DHS), 2003;
* Department of the Treasury (Treasury), 2003;
* Department of State (DOS), 2005;
* United States Agency for International Development (USAID), 2007;
* General Services Administration (GSA), 2009;
* Department of Health and Human Services (HHS), 2009;
* Department of Veteran's Affairs (VA), 2010.
Objectives:
Our objectives for this review are to:
* Describe the policies and procedures for administering and
monitoring federal mentor-protégé programs;
* Identify controls used to help ensure that mentor-protégé programs
are beneficial to program participants and eligibility requirements
are being met; and;
* Determine if information is available on whether protégés have
become able to compete for federal contracts without the assistance of
a mentor.
Scope and Methodology:
To help address our objectives, we took the following actions:
* To address objective 1, we reviewed applicable regulations, polices
and procedures, and other agency guidance for administering and
monitoring the mentor protégé programs. We interviewed agency
officials regarding how the programs are administered and monitored,
including each agency's program objectives, types of mentor-protégé
agreements, program requirements, and application review and approval
processes.
* To address objective 2, we reviewed policies and procedures, agency
guidance, prior GAO and inspector general reports, and other relevant
documentary information on mentor-protégé agreements, mentor
incentives, benefits to protégés, eligibility requirements, agency
performance reviews, and measurements of theprograms' performance. We
also interviewed agency officials and select industry group
representatives regarding controls and program oversight.
* To address objective 3, we reviewed available information on the
extent to which protégés are able to compete for federal contracts
without the assistance of a mentor, including available information on
employment, revenue, and additional protégé contracting and
subcontracting opportunities. We also interviewed agency officials on
what, if any, information is maintained on protégés at the conclusion
of the mentor-protégé agreement.
* In accordance with the statute, we focused on SBA and the 12 other
federal agencies we identified as having a mentor-protégé program. As
agreed with your offices, we focused on policies and procedures the
agencies put in place to administer and monitor the mentor-protégé
programs and controls to help ensure the programs are beneficial to
participants, but did not conduct testing on how well the program
controls were operating.
We conducted our work from October 2010 through March 2011 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
• The first mentor-protégé program”-the Department of Defense (DOD)
Pilot Mentor Protégé Program”-was established by DOD as a pilot under
the National Defense Authorization Act for Fiscal Year 1991. Since the
pilot program was authorized, it has been continuously extended).
[Footnote 15]
The next major program”-the Small Business Administration (SBA) 8(a)
Mentor-Protégé Program-”was established in 1998. It is offered under
the 8(a) Business Development Program, which SBA administers for small
businesses owned and controlled by socially and economically
disadvantaged individuals.[Footnote 16]
Generally, the Office of Small and Disadvantaged Business Utilization
(OSDBU) at each agency is responsible for mentor-protégé program
management and administration.[Footnote 17] In addition, some agencies
also coordinate their programs with the contracting offices.
Mentors and protégés interested in becoming approved program
participants must submit a joint application to the OSDBU for review
and approval. The application is evaluated on the extent to which the
mentor plans to provide developmental assistance to the protégé.
In general, mentors and protégés are responsible for identifying and
selecting each other prior to entering the program.
Mentors and protégés are required to jointly develop a tailored
developmental assistance plan which is set forth in a "mentor-protégé
agreement" that is submitted to OSDBU officials who determine the
agreement's compliance with specific agency requirements.
The mentor-protégé agreement authorizes a broad array of developmental
assistance, such as:
- technology transfer, including training in the areas of production,
quality control, manufacturing, engineering, computer hardware and
software, and assistance in obtaining production and accounting
certifications needed to work on large federal government contracts;
and;
- overall general business management skills, including financial and
personnel management, marketing, and proposal writing; contract
administration; and organizational management.
Additionally, some programs allow mentors to provide loans and can
award subcontracts on a noncompetitive basis.
Generally, the responsible OSDBU officials periodically review the
mentor-protégé agreement to ensure that the terms of the agreement are
being fulfilled, developmental assistance is being provided as agreed,
and mentors and protégés comply with all agency requirements.
The length of the mentor-protégé agreement varies by agency”-usually
from 1 to 3 years-”and some agencies may allow the agreement to be
extended upon approval. However, some agencies have no fixed terms,
and instead limit the term of the agreement through negotiation or by
tying the length of the agreement to the length of a contract.
Participation in the mentor-protégé program varies across agencies.
For example, SBA, which has the largest program, has 480 current
mentor-protégé agreements, whereas the Environmental Protection Agency
(EPA) has 4 current agreements in place.
Figure: Number of Mentor Protégé Agreements Across the Federal
Government, as of December 2010:
[Refer to PDF for image: vertical bar graph]
Agency: SBA;
Agreements: 480.
Agency: DHS;
Agreements: 172.
Agency: DOD;
Agreements: 133.
Agency: DOE;
Agreements: 115.
Agency: DOS;
Agreements: 70.
Agency: GSA;
Agreements: 49.
Agency: TREAS;
Agreements: 43.
Agency: VA;
Agreements: 20.
Agency: NASA;
Agreements: 12.
Agency: FAA;
Agreements: 10.
Agency: HHS;
Agreements: 6.
Agency: USAID;
Agreements: 6.
Agency: EPA
Agreements: 4.
Agency: MP
Source: GAO DNS compilation DOD based DOE on information provided by
agencies with a mentor-protégé program.
[End of figure]
Figure: Illustrative Overview of Mentor Protégé Program:
[Refer to PDF for image: illustration]
Application and approval:
(A) Mentor: Joint application to Agency OSDBU.
(B) Protégé: Mentor protégé agreement to Agency OSDBU.
Agency OSDBU approval/disapproval back to Mentor and/or Mentor protégé.
OSDBU reviews joint application and mentor protégé, agreement for
compliance with agency regulations. If either is disapproved, they are
returned to the mentor/protégé for correction and resubmission.
Mentoring relationship:
(C) Developmental assistance: Mentor, protégé: mentor report; Protégé
report; Joint report to Agency OSDBU.
(D) Midpoint or annual reports submitted (report on progress of
mentoring relationship and all developmental assistance
provided/received).
(E) Reports reviewed for adherence to the developmental assistance
detailed in the mentor-protégé agreement. Site visits may be
conducted. OSDBU addresses problems/discrepancies.
(F1) Early termination by OSDBU, mentor, or protégé (due to unresolved
problems).
(F2) Mentoring relationship continues until end of agreed upon term
(at which time a joint or separate report should be submitted to
OSDBU). OSDBU approves termination.
(F3) Mentor and protégé apply for an extension. OSDRU
approves/disapproves of extension.
Sources: GAO; Art Explosion.
[End of figure]
Objective 1 - Policies and Procedures for Administering Mentor-Protégé
Programs:
All 13 federal agencies with mentor-protégé programs have established
policies and procedures for administering and monitoring their
programs.
Each agency's policies and procedures consist of regulatory guidance
such as the Federal Acquisition Regulation (FAR), agency supplemental
acquisition regulations, and program guidance. In most cases, the
program guidance is more directly linked to the overall administration
and management of the mentor-protégé program.
The program guidance is similar across most agencies. For example, all
agencies have similar guidance regarding the agency's non-involvement
in any partnering/teaming of mentors with protégés, the mentor-protégé
application process, and approval of potential mentors and protégés
for participation in the program.
Additionally, the agencies each have similar program guidelines
requiring the development of a mentor-protégé agreement, semi-annual
or annual mentor and protégé reports, and periodic agency program
reviews.
Table: Regulatory and Program Guidance for Mentor-Protégé Programs:
DHS:
* 48 CFR Section 3502.219;
* DHS Mentor-Protégé Program Guide 1.0”1.17.
DOD:
* 48 CFR Subpart 219.71;
* 48 CFR Ch. 2--Defense Acquisition Regulations System, Appendix I.
DOE:
* 48 CFR Subpart 919.70;
* DOE Mentor Protégé Overview and Fact Sheet.
DOS:
* 48 CFR Section 619.202-70.
FAA:
* FAA Acquisition Management System 3.6.1;
* FAA Mentor-Protégé Program Guide 1.0”1.17.
EPA:
* 48 CFR Section 1519.203.
GSA:
* 48 CFR Subpart 519.70;
* GSA Mentor-Protégé Program Guidebook.
HHS:
* 48 CFR Section 352.219-70;
* HHS Small Business Program Manual Chapter 14: Mentor Protégé Program.
NASA:
* 48 CFR Subpart 1819.72;
* NASA Mentor-Protégé Program Guidebook;
* NASA Mentor-Protégé Program Management Guidebook for Small Business
Specialists.
SBA:
* 13 CFR Section 124.520;
* SBA Mentor Protégé Overview and Fact Sheet.
Treasury:
* 48 CFR Section 1019.202-70.
USAID:
* 48 CFR Subpart 719.273;
* The USAID Mentor-Protegé Program-”A Guide for Mentors and Protégés.
VA:
* 48 CFR Subpart 819.71;
* VA Mentor-Protege Program Guidebook.
[End of table]
Differences in Policies and Procedures for Administering Mentor-
Protégé Programs:
While the program guidance at most agencies is similar, there are some
differences. For example, guidelines regarding the allowance of
multiple mentors for each protégé and the term length of mentor-
protégé agreements differ across agencies (see slide 19).
The following are additional differences in select mentor-protégé
program guidance:
DOD:
This is the only program mandated by law and the only program that
receives appropriated funding. It is one of only three programs which
offer cost reimbursement as an incentive for mentor participation. It
offers 2 major types of mentor-protégé agreements: 1) credit and 2)
direct reimbursement. Several military services and defense agencies
are involved in the program. They each administer their own program
separately, but share DOD regulations and policies.[Footnote 18]
SBA:
The program permits a waiver of the affiliation rule for joint
ventures between mentors and 8(a) protégés whereby the mentor may
provide assistance to the protégé without causing the two firms to be
considered "affiliated" for purposes of SBA's small business size
standards.
Additionally, the Small Business Jobs Act of 2010 gives SBA authority
to establish new mentor-protégé programs for small businesses owned
and controlled by service-disabled veterans and by women, and for
HUBZone small businesses, modeled on SBA's current program for
8(a) program participants.
FAA:
Unlike all other mentor-protégé programs, the program is not subject
to the FAR and other related acquisition and procurement statutes and
regulations.[Footnote 19] Additionally, it is one of only three
programs which offer cost reimbursement as an incentive for mentor
participation.[Footnote 20]
Table: Differences in Requirements for Multiple Mentors and Term of
Mentor Protégé Agreements:
Agency: DHS;
Multiple Mentors Allowed (within agency): Yes;
Term of Mentor-Protégé Agreements: 3 years.
Agency: DOD;
Multiple Mentors Allowed (within agency): No;
Term of Mentor-Protégé Agreements: 3 years.
Agency: DOE;
Multiple Mentors Allowed (within agency): No;
Term of Mentor-Protégé Agreements: 2 years.
Agency: DOS;
Multiple Mentors Allowed (within agency): Yes;
Term of Mentor-Protégé Agreements: No fixed term.
Agency: FAA;
Multiple Mentors Allowed (within agency): Yes;
Term of Mentor-Protégé Agreements: No fixed term.
Agency: EPA;
Multiple Mentors Allowed (within agency): Yes;
Term of Mentor-Protégé Agreements: No fixed term.
Agency: GSA;
Multiple Mentors Allowed (within agency): No;
Term of Mentor-Protégé Agreements: No fixed term.
Agency: HHS;
Multiple Mentors Allowed (within agency): No;
Term of Mentor-Protégé Agreements: 3 years.
Agency: NASA;
Multiple Mentors Allowed (within agency): No;
Term of Mentor-Protégé Agreements: 3 years.
Agency: SBA;
Multiple Mentors Allowed (within agency): Yes (with limitations);
Term of Mentor-Protégé Agreements: 1 year.
Agency: Treasury;
Multiple Mentors Allowed (within agency): No;
Term of Mentor-Protégé Agreements: 1 year.
Agency: USAID;
Multiple Mentors Allowed (within agency): Yes;
Term of Mentor-Protégé Agreements: 3 years.
Agency: VA;
Multiple Mentors Allowed (within agency): No;
Term of Mentor-Protégé Agreements: 3 years.
[End of table]
Objective 2: Controls to Help Ensure Eligibility and Benefits to
Protégés:
Controls exist at all 13 agencies with mentor-protégé programs to help
ensure that mentors and protégés meet eligibility criteria and
protégés benefit from participation in the program.
Generally, the first control encountered by prospective mentors and
protégés is the verification of eligibility to participate in the
mentor-protégé program.
The most common eligibility criterion for both mentors and protégés is
an eligibility to receive government contracts. Agencies verify that
this criterion is met by checking whether the mentor and protégé are
on the "suspended" or "debarred" lists.
Size restrictions for protégés are verified by checking the protégé
firms' primary North American Industry Classification System (NAICS)
code, which is used to classify businesses according to type of
economic activity.
Moreover, all agencies require that only certain types of small
business are eligible to participate in the program as protégés (see
slide 23).
Table: Eligibility Requirements for Mentors:
Agency: DHS;
Business Size (Large/Small): L;
Eligible for Federal Contracts: [Check];
Ability to Help Protégé: [Check];
Current Prime or Sub Contractor: [Empty];
Multiple Protege Allowed: [Check];
Other Qualifications: [Empty].
Agency: DOD;
Business Size (Large/Small): L/S;
Eligible for Federal Contracts: [Check];
Ability to Help Protégé: [Check];
Current Prime or Sub Contractor: Prime;
Multiple Protege Allowed: [Check];
Other Qualifications: [Check].
Agency: DOE;
Business Size (Large/Small): L/S;
Eligible for Federal Contracts: [Check];
Ability to Help Protégé: [Check];
Current Prime or Sub Contractor: Prime;
Multiple Protege Allowed: [Check];
Other Qualifications:
Agency: DOS;
Business Size (Large/Small): L/S;
Eligible for Federal Contracts: [Check];
Ability to Help Protégé: [Check];
Current Prime or Sub Contractor: [Empty];
Multiple Protege Allowed: [Check];
Other Qualifications: [Empty].
Agency: FAA;
Business Size (Large/Small): L/S;
Eligible for Federal Contracts: [Check];
Ability to Help Protégé: [Check];
Current Prime or Sub Contractor: [Empty];
Multiple Protege Allowed: [Check];
Other Qualifications: [Empty].
Agency: EPA;
Business Size (Large/Small): L/S;
Eligible for Federal Contracts: [Check];
Ability to Help Protégé: [Check];
Current Prime or Sub Contractor: Prime;
Multiple Protege Allowed: [Check];
Other Qualifications: [Check].
Agency: GSA;
Business Size (Large/Small): L/S;
Eligible for Federal Contracts: [Check];
Ability to Help Protégé: [Check];
Current Prime or Sub Contractor: Prime;
Multiple Protege Allowed: [Check] (for Large);
Other Qualifications: [Check].
Agency: HHS;
Business Size (Large/Small):
Eligible for Federal Contracts: [Check];
Ability to Help Protégé: [Check];
Current Prime or Sub Contractor: Prime;
Multiple Protege Allowed: [Check];
Other Qualifications: [Check].
Agency: NASA;
Business Size (Large/Small):
Eligible for Federal Contracts: [Check];
Ability to Help Protégé: [Check];
Current Prime or Sub Contractor: Prime;
Multiple Protege Allowed: [Check];
Other Qualifications: [Check].
Agency: SBA;
Business Size (Large/Small): L/S;
Eligible for Federal Contracts: [Check];
Ability to Help Protégé: [Check];
Current Prime or Sub Contractor: [Empty];
Multiple Protege Allowed: [Check] (with limitations);
Other Qualifications: [Check].
Agency: Treasury;
Business Size (Large/Small): L/S;
Eligible for Federal Contracts: [Check];
Ability to Help Protégé: [Check];
Current Prime or Sub Contractor: [Empty];
Multiple Protege Allowed: [Check];
Other Qualifications: [Empty].
Agency: USAID;
Business Size (Large/Small): L/S;
Eligible for Federal Contracts: [Check];
Ability to Help Protégé: [Check];
Current Prime or Sub Contractor: [Empty];
Multiple Protege Allowed: [Check];
Other Qualifications: [Empty].
Agency: VA;
Business Size (Large/Small): L/S;
Eligible for Federal Contracts: [Check];
Ability to Help Protégé: [Check];
Current Prime or Sub Contractor: Prime or Sub;
Multiple Protege Allowed: [Check];
Other Qualifications: [Check].
[End of table]
Table: Eligibility Requirements for Protégés:
Agency: OHS;
Small by industrial code standard: [Check];
Eligible for Government Contracts: [Check];
Multiple Mentors Allowed within agency (Yes/No): Yes;
Protégé Self-Certify to Mentors (Yes/No): Yes;
Other Qualifications:
Agency: DOD;
Small by industrial code standard: [Check];
Eligible for Government Contracts: [Check];
Multiple Mentors Allowed within agency (Yes/No): No;
Protégé Self-Certify to Mentors (Yes/No): Yes (with exceptions);
Other Qualifications:
Agency: DOE;
Small by industrial code standard: [Check];
Eligible for Government Contracts: [Check];
Multiple Mentors Allowed within agency (Yes/No): No;
Protégé Self-Certify to Mentors (Yes/No): Yes;
Other Qualifications:
Agency: DOS;
Small by industrial code standard: [Check];
Eligible for Government Contracts: [Check];
Multiple Mentors Allowed within agency (Yes/No): Yes;
Protégé Self-Certify to Mentors (Yes/No): Yes (with exceptions);
Other Qualifications:
Agency: FAA;
Small by industrial code standard: [Check];
Eligible for Government Contracts: [Check];
Multiple Mentors Allowed within agency (Yes/No): Yes;
Protégé Self-Certify to Mentors (Yes/No): Yes;
Other Qualifications:
Agency: EPA;
Small by industrial code standard: [Check];
Eligible for Government Contracts: [Check];
Multiple Mentors Allowed within agency (Yes/No): Yes;
Protégé Self-Certify to Mentors (Yes/No): Yes;
Other Qualifications:
Agency: GSA;
Small by industrial code standard: [Check];
Eligible for Government Contracts: [Check];
Multiple Mentors Allowed within agency (Yes/No): No;
Protégé Self-Certify to Mentors (Yes/No): Yes (with exceptions);
Other Qualifications:
Agency: MIS;
Small by industrial code standard: [Check];
Eligible for Government Contracts: [Check];
Multiple Mentors Allowed within agency (Yes/No): No;
Protégé Self-Certify to Mentors (Yes/No): Yes;
Other Qualifications:
Agency: NASA;
Small by industrial code standard: [Check];
Eligible for Government Contracts: [Check];
Multiple Mentors Allowed within agency (Yes/No): No;
Protégé Self-Certify to Mentors (Yes/No): Yes (with exceptions);
Other Qualifications:
Agency: SBA;
Small by industrial code standard: [Check];
Eligible for Government Contracts: [Check];
Multiple Mentors Allowed within agency (Yes/No): Yes (with
limitations);
Protégé Self-Certify to Mentors (Yes/No): No;
Other Qualifications:
Agency: Treasury;
Small by industrial code standard: [Check];
Eligible for Government Contracts: [Check];
Multiple Mentors Allowed within agency (Yes/No): No;
Protégé Self-Certify to Mentors (Yes/No): Yes (with exceptions);
Other Qualifications:
Agency: USAID;
Small by industrial code standard: [Check];
Eligible for Government Contracts: [Check];
Multiple Mentors Allowed within agency (Yes/No): Yes;
Protégé Self-Certify to Mentors (Yes/No): Yes;
Other Qualifications:
Agency: VA;
Small by industrial code standard: [Check];
Eligible for Government Contracts: [Check];
Multiple Mentors Allowed within agency (Yes/No): No;
Protégé Self-Certify to Mentors (Yes/No): Yes;
Other Qualifications:
[End of table]
Table: Types of Small Businesses Accepted as Protégés:
Agency: DHS;
Small Business: [Check];
Small Disadvantaged Business: [Check];
Women-Owned: [Check];
Veteran-Owned: [Check];
Service-Disabled Veteran-Owned: [Check];
HUBZone: [Check];
HBCU and Minority Institutions: [Empty];
Other Qualifying Categories: [Empty].
Agency: DOD;
Small Business:
Small Disadvantaged Business: [Check];
Women-Owned: [Check];
Veteran-Owned: [Empty];
Service-Disabled Veteran-Owned: [Check];
HUBZone: [Check];
HBCU and Minority Institutions: [Empty];
Other Qualifying Categories: [Check].
Agency: DOE;
Small Business:
Small Disadvantaged Business: [Check];
Women-Owned: [Check];
Veteran-Owned: [Empty];
Service-Disabled Veteran-Owned: [Check];
HUBZone: [Check];
HBCU and Minority Institutions: [Check];
Other Qualifying Categories: 8(a).
Agency: DOS;
Small Business: [Check];
Small Disadvantaged Business: [Check];
Women-Owned: [Check];
Veteran-Owned: [Check];
Service-Disabled Veteran-Owned: [Check];
HUBZone: [Check];
HBCU and Minority Institutions: [Empty];
Other Qualifying Categories: [Empty].
Agency: FAA;
Small Business: [Check];
Small Disadvantaged Business: [Check];
Women-Owned: [Check];
Veteran-Owned: [Empty];
Service-Disabled Veteran-Owned: [Check];
HUBZone: [Empty];
HBCU and Minority Institutions: [Check];
Other Qualifying Categories: [Check].
Agency: EPA;
Small Business:
Small Disadvantaged Business: [Check];
Women-Owned: [Check];
Veteran-Owned: [Empty];
Service-Disabled Veteran-Owned: [Empty];
HUBZone: [Empty];
HBCU and Minority Institutions: [Check];
Other Qualifying Categories: [Empty].
Agency: GSA;
Small Business: [Check];
Small Disadvantaged Business: [Check];
Women-Owned: [Check];
Veteran-Owned: [Check];
Service-Disabled Veteran-Owned: [Check];
HUBZone: [Check];
HBCU and Minority Institutions: [Empty];
Other Qualifying Categories: [Empty].
Agency: HHS;
Small Business: [Check];
Small Disadvantaged Business: [Check];
Women-Owned: [Check];
Veteran-Owned: [Check];
Service-Disabled Veteran-Owned: [Check];
HUBZone: [Check];
HBCU and Minority Institutions: [Empty];
Other Qualifying Categories: [Empty].
Agency: NASA;
Small Business: [Check];
Small Disadvantaged Business: [Check];
Women-Owned: [Check];
Veteran-Owned: [Check];
Service-Disabled Veteran-Owned: [Check];
HUBZone: [Check];
HBCU and Minority Institutions: [Check];
Other Qualifying Categories: [Check].
Agency: SBA;
Small Business: [Empty];
Small Disadvantaged Business: [Empty];
Women-Owned: [Empty];
Veteran-Owned: [Empty];
Service-Disabled Veteran-Owned: [Empty];
HUBZone: [Empty];
HBCU and Minority Institutions: [Empty];
Other Qualifying Categories: 8(a).
Agency: Treasury;
Small Business: [Check];
Small Disadvantaged Business: [Check];
Women-Owned: [Check];
Veteran-Owned: [Check];
Service-Disabled Veteran-Owned: [Check];
HUBZone: [Check];
HBCU and Minority Institutions: [Empty];
Other Qualifying Categories: [Empty].
Agency: USAID;
Small Business: [Check];
Small Disadvantaged Business: [Check];
Women-Owned: [Check];
Veteran-Owned: [Check];
Service-Disabled Veteran-Owned: [Check];
HUBZone: [Check];
HBCU and Minority Institutions: [Empty];
Other Qualifying Categories: [Check].
Agency: VA;
Small Business: [Empty];
Small Disadvantaged Business: [Empty];
Women-Owned: [Empty];
Veteran-Owned: [Check];
Service-Disabled Veteran-Owned: [Check];
HUBZone: [Empty];
HBCU and Minority Institutions: [Empty];
Other Qualifying Categories: [Empty].
[End of table]
Controls to Help Ensure Benefit to Participants:
For each mentor-protégé program, another control once eligibility has
been established is the interim reports that are required of mentors
and protégés.
Generally, the agencies require that these reports be submitted either
annually or semiannually, and either by the mentor and protégé jointly
or independently. In a relatively few instances, some agencies will
also require that the mentor and protégé provide a formal briefing
(either interim or at the conclusion of the program) regarding any
accomplishments.
Some agencies (7 of 13) require that the mentor and protégé report
semiannually, while another five agencies require that they report
annually. Most of the agencies (9 of 13) also require that a report be
submitted upon completion of the program, such as a "lessons learned"
evaluation.
As part of the required interim reports for mentors and protégés, the
agencies generally request data on protégé growth (such as in numbers
of contracts, finances, or employees), costs and expenditures, and
accomplishment of specific developmental activities.
Some agencies provide sample reports or templates for these reports on
their website.
Although these reporting requirements exist, we found that some
mentors and protégés have not yet submitted the required reports
because the mentor-protégé programs were recently implemented and the
mentor-protégé agreements have not been in place long enough to meet
the requirement for an interim report. To date, HHS and VA have not
yet received the required reports from mentors and protégés in their
program because their programs were implemented in 2009 and 2010,
respectively.
Table: Mentor and Protégé Reporting Requirements:
Agency: DHS;
Intermediate Reviews and Reports: 18-month;
Intermediate Participant Briefing (Yes/No): Yes;
Reports/Presentation at Conclusion (Yes/No): Yes;
Post-Agreement Review: [Empty].
Agency: DOD;
Intermediate Reviews and Reports: Semi-Annual;
Intermediate Participant Briefing (Yes/No):
Reports/Presentation at Conclusion (Yes/No):
Post-Agreement Review: 2-year.
Agency: DOE;
Intermediate Reviews and Reports: Semi-Annual;
Intermediate Participant Briefing (Yes/No):
Reports/Presentation at Conclusion (Yes/No): Yes;
Post-Agreement Review: [Empty].
Agency: DOS;
Intermediate Reviews and Reports: Annual;
Intermediate Participant Briefing (Yes/No):
Reports/Presentation at Conclusion (Yes/No): Yes;
Post-Agreement Review: [Empty].
Agency: FAA;
Intermediate Reviews and Reports: Semi-Annual;
Intermediate Participant Briefing (Yes/No): Yes;
Reports/Presentation at Conclusion (Yes/No): Yes;
Post-Agreement Review: [Empty].
Agency: EPA;
Intermediate Reviews and Reports: Annual;
Intermediate Participant Briefing (Yes/No):
Reports/Presentation at Conclusion (Yes/No):
Post-Agreement Review: [Empty].
Agency: GSA;
Intermediate Reviews and Reports: Semi-Annual;
Intermediate Participant Briefing (Yes/No): Yes;
Reports/Presentation at Conclusion (Yes/No): Yes;
Post-Agreement Review: [Empty].
Agency: HHS;
Intermediate Reviews and Reports: Semi-Annual;
Intermediate Participant Briefing (Yes/No): Yes;
Reports/Presentation at Conclusion (Yes/No): Yes;
Post-Agreement Review: [Empty].
Agency: NASA;
Intermediate Reviews and Reports: Semi-Annual;
Intermediate Participant Briefing (Yes/No):
Reports/Presentation at Conclusion (Yes/No):
Post-Agreement Review: 2-year.
Agency: SBA;
Intermediate Reviews and Reports: Annual;
Intermediate Participant Briefing (Yes/No):
Reports/Presentation at Conclusion (Yes/No):
Post-Agreement Review: [Empty].
Agency: Treasury;
Intermediate Reviews and Reports: Annual;
Intermediate Participant Briefing (Yes/No):
Reports/Presentation at Conclusion (Yes/No): Yes;
Post-Agreement Review: [Empty].
Agency: USAID;
Intermediate Reviews and Reports: Annual;
Intermediate Participant Briefing (Yes/No):
Reports/Presentation at Conclusion (Yes/No): Yes;
Post-Agreement Review: 2-year.
Agency: VA;
Intermediate Reviews and Reports: Semi-Annual;
Intermediate Participant Briefing (Yes/No): Yes;
Reports/Presentation at Conclusion (Yes/No): Yes;
Post-Agreement Review: [Empty].
[End of table]
Controls to Help Ensure Benefit to Participants:
The mentor-protégé agreement itself also serves as a program control
within all agencies. The agencies attempt to ensure benefits to
protégés by requiring mentors to include descriptions, plans and
schedules for developmental assistance in the agreement that is
submitted to the agency for approval. Agencies will then compare the
reported progress with the published schedule during the periodic
reviews of the agreement.
As an oversight measure, agency officials may also conduct site visits
to help ensure that protégés are receiving the benefits agreed to in
the mentor-protégé agreement.
In addition, some agencies rely upon protégés to specifically report
to agency officials if the terms of the mentor-protégé agreement are
not being fulfilled or if they are dissatisfied with the developmental
assistance being provided by the mentor.
As an additional program control, each agency periodically conducts
annual performance reviews of the mentor-protégé relationship to help
ensure that the terms of the mentor-protégé agreement are being
fulfilled and the developmental assistance is being provided as agreed.
Generally, an agency may withhold approval of the continuation of a
mentor-protégé agreement if it finds that the mentor has not provided
the assistance set forth in the agreement or that the assistance has
not resulted in any material benefits to the protégé, as determined by
the agency. However, according to agency officials, this occurs very
infrequently.
Further, as part of SBA's efforts to help ensure that program benefits
are provided to intended recipients and are not just a mechanism to
enable participants that would not otherwise qualify under its 8(a)
program to receive contracts, on February 11, 2011, SBA published a
final rule revising its 8(a) program regulations, including those for
its mentor-protégé program[Footnote 21] and joint ventures.
Among other things, the revised regulations add consequences for a
mentor that does not provide its protégé the assistance required by
their agreement, including stop-work orders and potential debarment;
require SBA's 8(a) participants to a joint venture to perform at least
40 percent of the work done by the joint venture, including work
awarded under a mentor/protégé agreement; and generally prohibit a non-
8(a) participant to a joint venture, or its affiliates, from acting as
a subcontractor on any 8(a) contracts.
Objective 3: Information on Protégés After Conclusion of Mentor-
Protégé Program:
Information on whether protégés have become able to compete for
federal contracts without the assistance of a mentor is generally not
available because most agencies do not maintain information on
protégés after the conclusion of the mentor-protégé program.
Most agency officials told us that information is collected and
maintained on the protégé only while the protégé is participating in
the program.
For example, most agencies collect information on the increase in
number, dollar value, and percentage of contacts/subcontracts awarded
to the protégés during the mentoring agreement.
Some agencies also collect information on any increase in protégé
subcontracting opportunities in areas where the protégé had not
traditionally performed, thus indicating that the protégé is expanding
its field of expertise.
Additionally, some agencies have established policies and procedures
that utilize information collected on the protégés progress during the
mentoring agreement to determine the overall success of their mentor-
protégé programs.
Of the 13 agencies with mentor protégé programs, only 3 agencies”-DOD,
NASA and USAID”-currently have policies and procedures in place to
collect information on protégés after they complete the mentor-protégé
program.[Footnote 22]
DOD, NASA and USAID require that protégés submit a post-completion
report on their employment and revenue statistics for each of the 2
years following conclusion of the program.
In addition, DOD and NASA require that the post-completion reports
include information on all within-agency and other prime contract and
subcontract awards to protégés, and subcontract awards from protégés,
such as:
* Number/dollar of prime contract awards to protégé;
* Number/dollar of subcontract awards to protégé from mentor;
* Number/dollar of subcontract awards to protégé from other sources
(other than mentor);
* Number/dollar of subcontract awards from protégé to mentor; and;
* Number/dollar of subcontract awards from protégé to other sources
(other than mentor).
DOD's requirement for collecting and maintaining information on the
protégé after conclusion of the mentor-protégé program derives from
amendments to the program in the National Defense Authorization Act
for Fiscal Year 2000.[Footnote 23]
The statute requires that protégés report to DOD their progress in
each of the 2 years following the completion of the program.
Specifically, protégés are required to report on their progress made
since exiting the program, as well as any successes that have been
achieved that can be attributed to the program, such as employment,
annual revenue, and annual participation in DOD contracts.
Additionally, to ensure that the DOD mentor protégé program is focused
on a results-oriented approach to assessing program performance,
Congress required DOD to report annually on trends in the progress
made in employment, revenues, and participation in DOD contracts of
protégés and former protégés.
DOD is also required to conduct annual performance reviews to verify
whether the mentors and protégés accurately reported progress and to
determine that all costs reimbursed to mentors were reasonably
incurred in accordance with the statute and applicable regulations.
According to its fiscal year 2009 annual report to Congress, DOD
reported that protégés experienced an average increase in the number
of DOD prime contract and subcontract awards, and an average dollar
increase of all subcontract awards, but a cumulative decrease in
revenue and number of employees in the 2 years following completion of
the program.[Footnote 24]
NASA and USAID are not required to maintain information on protégés
following the completion of the mentor-protégé program. Specifically,
with the exception of DOD, none of the other agencies that have a
mentor-protégé program are required to maintain information on
protégés following completion of the program.
However, both NASA and USAID have established policies and procedures
requiring that the protégé submit information on employment and
revenue for each of the 2 years following completion of the program.
Each agency's reports are due one month after the end of the first and
second year following completion of the program.
According to officials, because the USAID and NASA mentor-protégé
programs began operating in 2007 and 2008, respectively, protégés have
not yet submitted post-completion reports. As discussed earlier, both
USAID and NASA mentor-protégé agreements have a 3-year term.
On the Web:
Web site: [hyperlink, http://www.gao.gov/]
Contact:
Chuck Young, Managing Director, Public Affairs, youngc1@gao.gov:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548:
Copyright:
This is a work of the U.S. government and is not subject to copyright
protection in the United States. The published product may be
reproduced and distributed in its entirety without further permission
from GAO. However, because this work may contain copyrighted images or
other material, permission from the copyright holder may be necessary
if you wish to reproduce this material separately.
[End of enclosure]
Enclosure II: Comments from the Department of Homeland Security:
Homeland Security:
June 1, 2011:
William Shear:
Director, Financial Markets & Community Investment:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Re: Draft Report GAO 11-5488, Mentor-Protege Programs Have Policies
That Aim to Benefit Participants but Do Not Require Post-Agreement
Tracking:
Dear Mr. Shear:
Thank you for the opportunity to review and comment on this draft
report. The U.S. Department of Homeland Security (DI IS) appreciates
the U.S. Government Accountability Office's (GAO's) work in planning
and conducting its review.
The Department is pleased to note GAO's positive acknowledgment of
many DHS Office of Small and Disadvantaged Business Utilization
efforts related to the mentor-protege program. such as the controls
that have been developed to help ensure that mentors and proteges meet
eligibility criteria and proteges benefit from participation in the
program. DHS is proud to have the second highest number of mentor-
protégé agreements of 13 agencies across the Federal Government and is
committed to ensuring its program effectively supports the goal of
increasing small business participation in government contracting.
GAO recommended that DHS "consider collecting and maintaining protege
post-completion information" to more fully evaluate the effectiveness
of its mentor-protege program and the ability of small businesses to
effectively compete for government contracts. DHS concurs with this
recommendation. DHS will consider following the Department of Defense
model by requiring proteges to report their progress annually for 2
years after exiting the program, including information on annual
revenue, number of employees, and participation in DHS and other
federal contracts. However, as GAO acknowledges in its report, the
potential benefits of doing this will have to be weighed against
potential costs.
Again, thank you for the opportunity to review and comment on this
draft report. We look forward to working with you on future Homeland
Security issues.
Sincerely,
Signed by:
Jim H. Crumpacker:
Director:
Departmental GAO/OIG Liaison Office:
[End of enclosure]
Enclosure III: Comments from the Department of Energy:
Department of Energy:
Washington, DC 20585:
June 3, 2011:
Mr. William Shear:
Director, Financial Markets and Community Investments:
United States Government Accountability Office:
441 G. Street, N.W.
Washington, RC, 20548:
Dear Mr. Shear:
Thank you for the opportunity to comment on the Government
Accountability Office's (GAO) draft report on the Department of
Energy's (DOE or Department), Federal Mentor-Protégé
Programs (GAO-11-548R).
DOE's concern is that the GAO conclusion focuses only on post-
agreement data collection, leading the reader to assume that this
objective is the most important to having a successful Mentor-Protégé
Program. The conclusion of this report states (beginning at the bottom
of page 12): "However, without post-agreement data collection, the
ability of these agencies to ensure that their programs are benefiting
the protégés as intended is limited." This implies that the . success
of a mentor-protege program solely depends on the collection of post
mentor-protégé agreement information on proteges.
The report clearly identifies three objectives:
(1) Describe the policies and procedures for administering and
monitoring Federal mentor-protégé programs;
(2) Identify controls used to help ensure that mentor-protégé programs
are beneficial to program participants and eligibility requirements
are being met; and;
(3) Determine if information is available on whether protégés have
become able to compete for Federal contracts without the assistance of
a mentor.
DOE, like other agencies, established objectives for its mentor-
protégé program and measures success by the achievement of these
objectives through a semi-annual review process. The Department's
review process assesses:
* The number of contracts received by the protege at both the prime
and subcontract level;
* The additional employees hired;
* An increase in revenue received;
* A protégé's profit margin; and;
* The mentor's and protégé's overall satisfaction with the mentoring
experience.
For DOE, after a 2-year term with an average of a 1 to 2-year
extension as a protege, many of the proteges have grown to an extent
that they are no longer classified as a small business in their
primary North American Industrial Classification System (NAICS) code,
as they have exceeded the size standard limitation. In the end,
becoming a large business is a goal of most small businesses, and
certainly one of the best measures of success.
The Department believes that post-agreement information may be useful,
along with other factors, in determining the success of the program.
Therefore, we will collect it for proteges that are still small in
their primary NAICSs code when they graduate from the program. We look
forward to working with your team on future engagements.
Sincerely,
Signed by:
William J. Valdez:
Acting Director:
Office of Small and Disadvantaged Business Utilization:
Office of Economic Impact and Diversity:
Attachment:
[End of enclosure]
Enclosure IV: Comments from the Department of State:
United States Department of State:
Chief Financial Officer:
Washington, DC 20520:
June 2, 2011:
Ms. Jacquelyn Williams-Bridgers:
Managing Director:
International Affairs and Trade:
Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548-0001:
Dear Ms. Williams-Bridgers:
We appreciate the opportunity to review your draft report,
"Mentor-Protégé Programs Have Policies That Aim to Benefit
Participants but Do Not Require Post-Agreement Tracking," GAO Job Code
250602.
The enclosed Department of State comments are provided for
incorporation with this letter as an appendix to the final report.
If you have any questions concerning this response, please contact
Shapleigh Drisko, Director, Bureau of Administration. Office of Small
and Disadvantaged Business Utilization at (703) 875-6823.
Sincerely,
Signed by:
James L. Millette:
cc: GAO ” William B. Shear:
A - Will Moser:
State/OIG - Evelyn Klemstine:
[End of letter]
Department of State Comments on GAO Draft Report:
Mentor-Protégé Programs Have Policies That Aim to Benefit Participants
but Do Not Require Post-Agreement Tracking (GAO-11-548R, GAO Code
250602):
Thank you for the opportunity for commenting on your report. The
Department partially agrees with GAO's recommendation. The Mentor
protégé program is a successful tool that allows the Department to
expand the capabilities and foster the growth of American small
business contractors. We reviewed your findings and recommendations
and are concerned about the program implications that post-completion
reporting for Mentor-Protégé programs will have on the Department, the
protégé firms, and the mentor firms.
If the policy is implemented, the Department would initiate post-
program monitoring of its former protégé firms. However, the
Department recommends against implementing increased reporting
requirements as it would increase the burden on all parties without
adding significant value to the existing program. First, it would
place additional reporting burdens on participating firms which would
be counter productive. The OMB specifically asks agencies to find ways
of reducing cost and time burden placed on the public, but this
initiative goes in the opposite direction. Experience tells us that
large firms are sometimes ambivalent about participation in the
program and additional reporting requirements could be enough to
discourage them from serving as mentors in the program.
Staffing to manage this program in the Department would consist of one
or more technicians and supervisory capacity to monitor their work.
This would also have labor and non-labor budgetary implications for
the Department.
Given the current success of the program, tentative hold on large firm
participation, and possible budget implications in the Department, we
feel that the addition of this reporting requirement would be ill-
advised at this time.
[End of enclosure]
Enclosure V: Comments from the Department of the Treasury:
Department of the Treasury:
Comments on Proposed Correspondence and GAO-11-548R Federal Mentor
Protégé Programs:
The Department of the Treasury, Office of Small and Disadvantaged
Business Utilization, has reviewed the proposed correspondence and
briefing slides entitled "Mentor-Protégé Programs Have Policies That
Aim to Benefit Participants but Do Not Require Post-Agreement
Tracking."
The Department of the Treasury is in the process of revising its
Mentor-Protégé Program policies and procedures and will include the
requirement for post-agreement reporting by the Protégé firms as
recommended in GAO-11-548R, Federal Mentor-Protégé Programs. The post-
agreement reporting requirement will be implemented for firms exiting
the Mentor-Protégé Program beginning in Fiscal Year 2012. Protégé
firms will be required to submit post-agreement reports 24 months
after exiting the program. Approximately 30 Mentor-Protégé agreements
are due to expire in Fiscal Year 2012. Participants in the Mentor-
Protégé Program will be informed in writing of the new reporting
requirement, including reporting guidelines and due dates.
In the interim, the Department of the Treasury will survey existing
Mentor-Protege teams to assess Program effectiveness and to assist in
making quality improvements; and prepare brief case study summaries of
each of the dyads, and/or an overall retrospective statistical summary
of Treasury's Mentor”Protégé program. The resulting information will
be included in the annual OMWI report to Congress.
[End of enclosure]
Enclosure VI: Comments from the Department of Veterans Affairs:
Department of Veterans Affairs:
Washington DC 20420:
May 31, 2011:
William B. Shear:
Director, Financial Markets and Community Investment:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Shear:
The Department of Veterans Affairs (VA) has reviewed the Government
Accountability Office's (GAO) draft report, Mentor-Protégé Programs
Have Policies That Aim to Benefit Participants but Do Not Require Post-
Agreement Tracking (GAO-11-548R) and generally agrees with GAO's
conclusions and concurs with GAO's recommendation.
The enclosure specifically addresses GAO's recommendation on the draft
report. VA appreciates the opportunity to comment on you draft report.
Sincerely,
Signed by:
John R. Gingrich:
Chief of Staff:
Enclosure:
[End of letter]
Enclosure:
Department of Veterans Affairs (VA) Response to Government
Accountability Office (GAO) Draft Report:
Mentor-Protégé Programs Have Policies That Aim to Benefit Participants
but Do Not Require Post-Agreement Tracking (GAO-11-548R):
GAO recommendation: To more fully evaluate the effectiveness of their
mentor-protégé programs and the ability of small businesses to
effectively compete for government contracts, we recommend that the
OSDBU and Mentor-Protégé Program Directors of DHS, DOE, DOS, EPA, EPA,
FAA, GSA, HHS, SBA, Treasury, and VA consider collecting and
maintaining protégé post-completion information.
VA response: Concur. Currently VA's Mentor-Protégé Program (MPP)
requires the mentor and protégé to prepare an evaluation of VA's MPP
upon completion of the program. Additionally, VA will add in the VA
Mentor-Protégé Guidebook a requirement to collect data from the
protégé for one year after completing VA's MPP in order to evaluate
the effectiveness of the program and the protégé's ability to compete on
Federal procurements without the assistance of a mentor.
[End of enclosure]
Footnotes:
[1] Pub. L. No. 111-240, § 1345, 124 Stat. 2504, 2546 (2010).
[2] The Department of Defense and Full-Year Continuing Appropriations
Act, 2011, extended the program until September 30, 2011, for approval
of new agreements and until September 30, 2014, for only reimbursement
of incurred costs or credit toward attainment of a subcontracting goal.
[3] Although some agencies may refer to their offices as the Office of
Small Business Programs or Small Business Development Office, for
simplicity we use the term OSDBU for all agencies in this report.
[4] All agencies allow mentors to have multiple protégés, while most
agencies do not allow protégés to have more than one mentor.
[5] In 2003, the program transitioned from the Office of the Secretary
of Defense, OSDBU level to the military services and defense agencies.
Services and agencies currently involved include: Army, Navy, Air
Force, U.S. Special Operations Command, Joint Ground Robotics
Enterprise, National Geospatial Intelligence Agency, National Security
Agency, Missile Defense Agency, Defense Contract Management Agency,
and Defense Logistics Agency (no current mentor-protégé agreements).
Although it had prior involvement, the Defense Information Systems
Agency is not currently involved in the program.
[6] The Fiscal Year 1996 Department of Transportation Appropriations
Act directed FAA to develop its own acquisition-management system
outside of FAR. It developed the FAA Acquisition System Toolset,
including the acquisition-management system that consists of
acquisition management policy and guidance specific to FAA.
[7] SBA's mentor-protégé program is limited to participants in the
8(a) program, and VA's mentor-protégé program is limited to small
businesses owned by veterans and service-disabled veterans. Most
agencies accept various types of small businesses as protégés in their
mentor-protégé program, such as small disadvantaged businesses; women-
owned, veteran-owned and service-disabled veteran-owned businesses;
HUBZone businesses; and historically black colleges and universities
and other minority institutions.
[8] As a result, our objective was to determine if information is
available on whether protégés have become able to compete for federal
contracts without the assistance of a mentor.
[9] According to SBA officials, as a result of protégé firms
participating in its 8(a) program, the agency collects information on
the firm for a period of 3 years following completion of either the 9-
year 8(a) program term or early graduation from the program. However,
the information is collected for purposes of the 8(a) program and is
not suitably detailed to determine whether protégés have become able
to compete for federal contracts.
[10] DOD's requirement for collecting and maintaining information on
the protégé after conclusion of the mentor-protégé program derives
from amendments to the program in the National Defense Authorization
Act for Fiscal Year 2000, Pub. L. No. 106-65, § 811, 113 Stat. 706
(1999).
[11] DOD is also required to verify that mentors and protégés
accurately reported progress and to determine that all costs
reimbursed to mentors during the agreement were reasonably incurred.
[12] DOD Office of Small Business Programs, DOD Mentor-Protégé Program
Annual Report to Congress, Fiscal Year 2009, (Washington, D.C., August
2010).
[13] DOD Office of Small Business Programs, DOD Mentor-Protégé Program
Annual Report to Congress, Fiscal Year 2007 and Fiscal Year 2008,
(Washington, D.C., September 2009).
[14] Most agency officials told us they only collect information on
protégés during the period in which they are participating in the
agency's mentor-protégé program, including data on the increase in
number and dollar value of contacts and subcontracts awarded to the
protégé. Some agencies also collect information on increases in
protégé subcontracting opportunities in areas where the protégé had
not traditionally performed--opportunities that would indicate an
expansion of its field of expertise. For some agencies, the
information gathered on the protégé's progress while it is
participating in the program is used as a measure of overall success
for their mentor-protégé programs.
[15] The National Defense Authorization Act for Fiscal Year 2005
extended the program until September 30, 2010 for approval of new
agreements, and until September 30, 2013, for only reimbursement of
incurred costs or credit toward attainment of a subcontracting goal.
[16] The 8(a) program is one of the federal government's primary
vehicles for developing small businesses that are owned and controlled
by socially and economically disadvantaged individuals. Firms in SBA's
8(a) program receive SBA technical assistance and management training,
and may be eligible for contracts that federal agencies set aside for
8(a) firms. SBA's mentor-protégé program serves as an additional
developmental tool for 8(a) participants and protégés must be
participants in SBA's 8(a) program.
[17] Unlike other mentor-protégé programs, SBA's Mentor-Protégé
Program is administered by the Office of Business Development through
SBAs district offices and does not involve the OSDBU.
[18] Effective October 2003, the program transitioned from the Office
of the Secretary of Defense, OSDBU level to the military services and
defense agencies. The following military services and defense agencies
are currently involved: Army, Navy, Air Force, US Special Operations
Command, Joint Ground Robotics Enterprise, National Geospatial
Intelligence Agency, National Security Agency, Missile Defense Agency,
Defense Contract Management Agency, and Defense Logistics Agency (no
current mentor-protégé agreements). Although it had prior involvement,
the Defense Information Systems Agency is not currently involved in
the program.
[19] The Fiscal Year 1996 Department of Transportation Appropriations
management system outside of FAR. It developed the FAA Acquisition
System Toolset, including the Acquisition Management System that
consists of acquisition policy and guidance specific to FAA.
[20] DOD and DOE also allow cost reimbursements for mentors under
their mentor-protégé programs.
[21] As previously mentioned, SBA's Mentor-Protégé Program is offered
under its 8(a) Business Development Program.
[22] According to SBA officials, as a result of protégé firms being
participants in SBA's 8(a) program, the agency collects information on
the firm for a period of 3 years following completion of the 9-year
program term or early graduation from the 8(a) program. However, the
information is not suitably detailed to determine whether protégés
have become able to compete for federal contracts.
[23] National Defense Authorization Act for Fiscal Year 2000, Pub. L.
No. 106-65, § 811 (1999).
[24] DOD Mentor-Protege Program Annual Report to Congress, Fiscal Year
2009, Office of Small Business Programs, August 2010.
[End of section]
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