National Defense Authorization Act Expands Mentor-Protégé beyond the 8(a) Program

By Ralph E. Winnie, Jr., Federal Allies News National Correspondent

On January 3, 2013 President Barack Obama signed into law the National Defense Authorization Act for Fiscal Year 2013 (NDAA).  The NDAA provides the US Government with new authority to create a Mentor-Protégé Program targeting thousands of non-8(a) small businesses so they will be able to participate in programs based on the current framework which was limited to businesses that were already accepted into the 8(a) Program.

“Expanding the Mentor Protégé Program beyond the 8(a) Program establishes a new dynamic among small businesses and federal agencies. It is a real investment in the future growth and dependability of small businesses,” said Frank Clay, Jr., Chairman, Federal Allies Institute, and President, The ClayGroup, Olathe, Kansas.

This will mean that more small businesses, including member companies associated with Federal Allies, will be eligible to benefit from the skills, training, and capital of large business mentors while, at the same time, gaining access to prime government contracts that were previously unavailable under the old system. Given that the expansion of the Mentor-Protégé Program is not mandatory its implementation is less that certain.  However, Federal Allies will be monitoring the status of the affiliation rules and the impact on federal contractors over the coming months to gauge its impact on small businesses associated with Federal Allies and make necessary recommendations.

“The good news is the door is open to recognize partnerships with small business that can make a difference. It is not essential that a Mentor Protégé Program be mandatory… what is important is that an opportunity is not missed because a small business is not 8(a),” said Clay.

Although the Act does provide for increased transparency in the sphere of small business contracting, it does not include major incentives for contractors to meet those goals. Construction contracts will be treated separately as SBA is planning to issue additional regulations as specified in the NDAA and these regulations can be difficult to comprehend at times. While the earlier regulations address the “cost of the contract” the new rules discuss the amount to be paid to a small business contractor which is the price and not the cost.

Federal Allies is closely monitoring the changes the NDAA is mandating, that SBA makes to its Women Owned Small Business Federal Contracting Program, and the impact this will have on our member companies. Federal Allies will work aggressively to make sure that its women owned small business members will be armed with the requisite knowledge, resources and skills to be able to effectively participate in SBA’s  Women’s Federal Contract Program and compete for and win federal contracts.  Prior to the new law, the anticipated award of a contract for a women-owned and economically disadvantaged women-owned minority small business could not exceed 6.5 million for manufacturing contracts and 4 million for all other contracts. The new law now removes the thresholds and allows women-owned small businesses greater access to federal contracting opportunities without limitations or restrictions as to the value of a contract.

“This one change will allow these best women-owned companies to become better by going after larger contracts that can grow their businesses,” said Clay.

NDAA also requires SBA to conduct another study to identify and report industries underrepresented by women-owned small businesses. Federal Allies applauds the implementation of the NDAA and will closely follow the implementation of this legislation to help women-owned small businesses which are members of Federal Allies get more federal contracts and help the Federal Government meet and exceed its statutory five percent women’s contracting goals.

Finally, the NDAA requires the Small Business Administration to establish a reporting mechanism to allow subcontractors to report issues of bad faith or fraud on the part of prime contractors. As a service to its member companies, Federal Allies, over the next few months, will be closely monitoring how this system will be implemented and what penalties will be used to enforce compliance.  Despite lingering questions, these new rules may increase the amount of money that gets into the hands of small businesses nationwide and also lead to greater diligence in administering plans on the part of prime contractors.

“All small businesses should follow the roll out of programs stemming from this legislation. FAI will do its part to communicate the policy specifics that will enable small businesses to take advantage of these new changes,” said Clay.

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