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Mentor-Protege Programs Have Policies That Aim to Benefit Participants but Do Not Require Postagreement Tracking

GAO-11-548R: Published: Jun 15, 2011. Publicly Released: Jun 15, 2011.

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A 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.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To more fully evaluate the effectiveness of their mentor-protege programs, the OSDBU and Mentor-Protege Program Directors of DHS, DOE, DOS, EPA, FAA, GSA, HHS, SBA, Treasury, and VA should consider collecting and maintaining protege postcompletion information.

    Agency Affected: Department of Homeland Security: Office of the Secretary: Office of Small and Disadvantaged Business Utilization

    Status: Closed - Implemented

    Comments: In November 2011, DHS updated its mentor-protege program guidance to require protege firms to report on their progress annually for two years after exiting the program.

    Recommendation: To more fully evaluate the effectiveness of their mentor-protege programs, the OSDBU and Mentor-Protege Program Directors of DHS, DOE, DOS, EPA, FAA, GSA, HHS, SBA, Treasury, and VA should consider collecting and maintaining protege postcompletion information.

    Agency Affected: General Services Administration: Office of the Administrator: Office of Small and Disadvantaged Business Utilization

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To more fully evaluate the effectiveness of their mentor-protege programs, the OSDBU and Mentor-Protege Program Directors of DHS, DOE, DOS, EPA, FAA, GSA, HHS, SBA, Treasury, and VA should consider collecting and maintaining protege postcompletion information.

    Agency Affected: Department of State: Office of Small and Disadvantaged Business Utilization

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To more fully evaluate the effectiveness of their mentor-protege programs, the OSDBU and Mentor-Protege Program Directors of DHS, DOE, DOS, EPA, FAA, GSA, HHS, SBA, Treasury, and VA should consider collecting and maintaining protege postcompletion information.

    Agency Affected: Department of the Treasury: Office of Small and Disadvantaged Business Utilization

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To more fully evaluate the effectiveness of their mentor-protege programs, the OSDBU and Mentor-Protege Program Directors of DHS, DOE, DOS, EPA, FAA, GSA, HHS, SBA, Treasury, and VA should consider collecting and maintaining protege postcompletion information.

    Agency Affected: Department of Health and Human Services: Office of Small and Disadvantaged Business Utilization

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To more fully evaluate the effectiveness of their mentor-protege programs, the OSDBU and Mentor-Protege Program Directors of DHS, DOE, DOS, EPA, FAA, GSA, HHS, SBA, Treasury, and VA should consider collecting and maintaining protege postcompletion information.

    Agency Affected: Veterans Administration: Office of Small and Disadvantaged Business Utilization

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To more fully evaluate the effectiveness of their mentor-protege programs, the OSDBU and Mentor-Protege Program Directors of DHS, DOE, DOS, EPA, FAA, GSA, HHS, SBA, Treasury, and VA should consider collecting and maintaining protege postcompletion information.

    Agency Affected: Environmental Protection Agency: Office of Small and Disadvantaged Business Utilization

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To more fully evaluate the effectiveness of their mentor-protege programs, the OSDBU and Mentor-Protege Program Directors of DHS, DOE, DOS, EPA, FAA, GSA, HHS, SBA, Treasury, and VA should consider collecting and maintaining protege postcompletion information.

    Agency Affected: Department of Energy: Office of Small and Disadvantaged Business Utilization

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To more fully evaluate the effectiveness of their mentor-protege programs, the OSDBU and Mentor-Protege Program Directors of DHS, DOE, DOS, EPA, FAA, GSA, HHS, SBA, Treasury, and VA should consider collecting and maintaining protege postcompletion information.

    Agency Affected: Department of Transportation: Federal Aviation Administration: Office of Small and Disadvantaged Business Utilization

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To more fully evaluate the effectiveness of their mentor-protege programs, the OSDBU and Mentor-Protege Program Directors of DHS, DOE, DOS, EPA, FAA, GSA, HHS, SBA, Treasury, and VA should consider collecting and maintaining protege postcompletion information.

    Agency Affected: Small Business Administration: Office of Small and Disadvantaged Business Utilization

    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

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