Mentor-Protege Program

Federal RegisterFeb 9, 1994

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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1819 and 1852

Mentor-Protege Program

AGENCY: Office of Small and Disadvantaged Business Utilization (OSDBU),

National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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SUMMARY: This proposed rule establishes NASA policy for the Mentor-

Protege Program which is designed to increase the overall participation

of Small Disadvantaged Businesses (SDBs) in NASA contracts and

subcontracts. The resultant increased participation of SDBs in NASA

contracts and subcontracts will enhance NASA's efforts to meet and

sustain the annual minimum eight (8) percent goal prescribed in Public

Law 101-144 and its amended version Public Law 101-507.

DATES: Comments are due no later than April 11, 1994.

ADDRESSES: Comments should be addressed to Ms. Rae C. Martel, NASA

Headquarters, NASA Office of Small and Disadvantaged Business

Utilization, (Code K), Washington, DC 20546. Comments should also be

addressed to the Office of Information and Regulatory Affairs of OMB,

ATTN: Desk Officer for NASA, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT:

Ms. Rae C. Martel, Telephone: (202) 358-2088 or 1800-2NASA-95.

SUPPLEMENTARY INFORMATION:

Background

The rule proposes NASA's policy on its Mentor-Protege Program. With

respect to prime contractors, it defines eligibility for participation,

allowable developmental assistance measures that will enhance the

capabilities of SDBs to perform NASA contracts and subcontracts, and

incentives for program participation. Further, it defines the

transportability of subcontracting goal credit features from the

Department of Defense (DOD) Mentor-Protege Program to NASA Contractors.

However, the effectiveness of a mentor under the NASA Program will be

evaluated by the measurable amount of developmental assistance provided

under NASA contracts. Participation in the program is voluntary.

With regard to SDBs, ``Socially And Economically Disadvantaged

Businesses'' include the eligible participants set forth in NASA's

Eight (8) percent legislation, Public Law 101-144 and the amended

provision in Public Law 101-507.

Availability of NASA FAR Supplement

The NASA FAR Supplement, of which this proposed coverage will

become a part, is codified in 48 CFR, chapter 18, and is available in

its entirety on a subscription basis from the Superintendent of

Documents, Government Printing Office, Washington, DC 20402. Cite GPO

Subscription Stock Number 933-003-00000-1. It is not distributed to the

public, whether in whole or in part, directly by NASA.

Impact

NASA certifies that this regulation will not have a significant

economic effect on a substantial number of small entities under the

Regulatory Flexibility Act (5 U.S.C. 601 et seq.). This proposed rule

imposes reporting or recordkeeping requirements subject to OMB approval

under the Paperwork Reduction Act, which will be requested separately.

List of Subjects in 48 CFR Parts 1819 and 1852

Government procurement.

Deidre A. Lee,

Associate Administrator for Procurement.

Accordingly, 48 CFR parts 1819 and 1852 are proposed to be amended

as follows:

1. The authority citation for 48 CFR parts 1819 and 1852 continues

to read as follows:

Authority: 42 U.S.C. 2473(c)(1).

PART 1819--SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS

2. Subpart 1819.72 is added to read as follows:

Subpart 1819.72 [Added]

Subpart 1819.72--The NASA Mentor-Protege Program

1819.7201 Scope of subpart.

1819.7202 Definitions.

1819.7203 Non-affiliation.

1819.7204 Transportability of features from the Department of

Defense (DOD) mentor-protege program to NASA contractors.

1819.7205 General policy.

1819.7206 Incentives for prime contractor participation.

1819.7207 Measurement of program success.

1819.7208 Mentor firms.

1819.7209 Protege firms.

1819.7210 Selection of protege firms.

1819.7211 Application process for mentor firms to participate in

the program.

1819.7212 OSDBU review and approval process of agreement.

1819.7213 Agreement contents.

1819.7214 Developmental assistance.

1819.7215 Obligation.

1819.7216 Internal controls.

1819.7217 Reports.

1819.7218 Program review.

1819.7219 Contract and solicitation clauses.

Subpart 1819.72--The NASA Mentor-Protege Program

1819.7201 Scope of subpart.

The NASA Mentor-Protege Program is designed to incentivize NASA

prime contractors to assist High Tech small disadvantaged businesses

(SDB)s in enhancing their capabilities to perform NASA contracts and

subcontracts, foster the establishment of long term business

relationships between SDBs and NASA prime contractors, and increase the

overall number of SDBs that receive NASA contract and subcontract

awards.

1819.7202 Definitions.

Historically Black Colleges and Universities, as used in this

subpart, means institutions determined by the Secretary of Education to

meet the requirements of 34 CFR 608.2 and listed therein.

Minority Educational Institutions, as used in this subpart, means

institutions meeting the criteria established in 34 CFR 607.2 by the

Secretary of Education.

Small Disadvantaged Business concern, as used in this subpart,

means a small business concern owned or controlled by individuals who

are both socially and economically disadvantaged (within the meaning of

section 8(a) (5) and (6) of the Small Business Act (15 U.S.C. 637(a)

(5) and (6))).

1819.7203 Non-affiliation.

For purposes of the Small Business Act, a protege firm may not be

considered an affiliate of a mentor firm solely on the basis that the

protege firm is receiving developmental assistance referred to in

1819.7214 from such mentor firm under the program.

1819.7204 Transportability of features from the Department of Defense

(DOD) mentor-protege program to NASA contractors.

(a) In accordance with the benefits authorized by the DOD Mentor-

Protege Program (Pub. L. 101-510, section 831, as amended by Pub. L.

102-190, section 814) a NASA contractor who is also an approved DOD

Mentor can transfer credit features to their NASA contracts.

(b) NASA prime contractors, who are approved DOD mentors, can award

subcontracts non-competitively under their NASA contracts to the

proteges which they are assisting under the DOD program (Pub. L. 101-

510, section 831(f)(2)).

assistance provided to proteges being assisted under the DOD program

toward meeting the goals in their subcontracting plans under their NASA

prime contracts (Pub. L. 102-190, section 814). Limitations which may

reduce the value of this benefit include:

(1) Credit toward attaining subcontracting goals is available only

to the extent that the developmental assistance costs have not been

reimbursed to the contractor by DOD as direct or indirect costs; or

(2) The credit is available to meet the goals of a NASA

subcontracting plan only to the extent that it has not been applied to

a DOD subcontracting plan. The same unreimbursed developmental

assistance costs cannot be counted toward meeting the subcontracting

goals of more than one prime contract. These costs would accrue from

credit for the multiples attributed to assistance provided by Small

Business Development Centers, Historically Black Colleges and

Universities and minority educational institutions.

(d) The features identified in paragraphs (a), (b), and (c) of this

section point out the portability of features from the DOD Mentor-

Protege Program to NASA prime contractors. NASA mentors will be held to

show ``good faith'' by providing actual developmental assistance beyond

transferring credit from activity in the DOD activity to NASA

subcontracting plans.

1819.7205 General policy.

(a) Eligible large business prime contractors, not included on the

``Parties Excluded from Procurement Programs'' list, who have at least

one active subcontracting plan, and who are approved as mentor firms

will enter into agreements with eligible (SDBs) as protege firms to

provide appropriate developmental assistance to enhance the

capabilities of SDBs to perform as subcontractors and suppliers.

Eligible small business prime contractors, not included on the

``Parties Excluded from Procurement Programs'' list and that are

capable of providing developmental assistance to SDBs, may be approved

as mentors.

(b) The pilot program has a duration of three years commencing from

[the date of the published final rule]. During this period, eligible

mentor firms, which have received approval by NASA to participate in

the program pursuant to subpart 1819.9212, may enter into agreements

with protege firms.

award-fee contracts may include a factor for evaluation of a

contractor's performance associated with Mentor-Protege Program

participation.

(d) Other contract types, including cost-plus-fixed-fee, with

subcontracting opportunities may include the clause at 52.219-10,

Incentive Subcontracting Program for Small and Small Disadvantaged

Business Concerns, for use in evaluating a contractor's performance

associated with Mentor-Protege Program participation when a

subcontracting plan is required.

(e) Costs incurred by a mentor to negotiate an agreement with a

protege and to implement the agreement are incurred by both parties at

their own risk. NASA will not reimburse these costs.

1819.7206 Incentives for prime contractor participation.

(a) Under cost-plus-award fee contracts, mentor firms may be

eligible to earn award fee associated with their performance as a

mentor by performance evaluation period. This performance may be

evaluated to determine the degree to which the participation went

beyond (exceeded) the negotiated SDB goals commitment.

(b) Under other contract types with subcontracting opportunities,

including cost-plus-fixed-fee, mentor firms may be eligible to earn fee

associated with their performance as a mentor. This performance may be

evaluated to determine the degree to which the participation went

beyond (exceeded) the negotiated SDB goals commitment.

contractors, in promoting the use of SDBs as subcontractors, may be an

evaluation factor in award fee plans of all cost-plus-award-fee

contracts. Criteria under the factor could include:

(1) Active participation in the NASA Mentor Protege Program;

(2) Actions taken by the contractor to develop working

relationships with SDBs and others;

(3) The amount and quality of developmental assistance provided;

(4) Subcontracts awarded to SDBs and others;

(5) Success of the protege firms in increasing their business as a

result of receiving developmental assistance; and

(6) Accomplishment of any other activity as related to the Mentor-

Protege relationship.

1819.7207 Measurement of program success.

The overall success of the program will be measured by the extent

to which it results in:

(a) An increase in the number, dollar value and percentage of

subcontracts awarded to SDBs by mentor firms under NASA contracts since

the date of entry into the program;

(b) An increase in the number and dollar value of contract and

subcontract awards to protege firms since the time of their entry into

the program (under NASA contracts, contracts awarded by other Federal

agencies and under commercial contracts);

awarded to a protege firm by its mentor firm; and

(d) An increase in subcontracting with SDB firms in industry

categories where SDBs have not traditionally participated within the

mentor firm's activity.

1819.7208 Mentor firms.

(a) Eligibility:

(1) Contractors eligible for receipt of government contracts;

(2) Large prime contractors performing under contracts with at

least one negotiated subcontracting plan as required by FAR 19.7; and

(3) Small Business prime contractors that can provide developmental

assistance to enhance the capabilities of SDBs to perform as

subcontractors and suppliers. A small business prime contractor

performing under a NASA contract that does not contain a negotiated

subcontracting plan may apply.

(b) Mentors will be encouraged to identify and select:

(1) A broad base of firms including those defined as emerging SDB

firms (e.g., an SDB whose size is no greater than 50% of the size

standard applicable to the SIC code assigned to a contracting

opportunity); and

(2) SDBs in addition to firms with whom they have established

business relationships.

Sec. 1819.7209 Protege firms.

(a) For selection as a protege, a firm must be:

(1) A small disadvantaged business concern as defined by FAR

19.001;

(2) Certified as small in the SIC code for the services or supplies

to be provided by the protege to the mentor; and

(3) Eligible for receipt of government contracts.

(b) A protege firm may self-certify to a mentor firm that it meets

each of the eligibility requirements in paragraphs (a) (1), (2) and (3)

of this section. Mentor firms may rely in good faith on a written

representation of a business concern that such business meets the

requirements in paragraphs (a) (1) and (2).

educational institutions, and small women-owned businesses are eligible

as proteges under this program.

(d) Proteges may have multiple mentors. Proteges should maintain a

system for developing reports of mentoring activity by federal agency.

Sec. 1819.7210 Selection of protege firms.

(a) Mentor firms will be solely responsible for selecting protege

firms. The mentor is encouraged to identify and select protege firms

that represent a balance in company size, e.g., start-up, emerging,

etc.

(b) Mentor firms may have more than one protege.

protested, except as in paragraph (d) of this section.

(d) In the event of a protest regarding the size or disadvantaged

status of a business concern eligible to be a protege firm, the mentor

firm shall refer the protest to the Associate Administrator, NASA

Office of Small and Disadvantaged Business Utilization (OSDBU) for

resolution. When appropriate, NASA will seek an advisory option from

the SBA.

Sec. 1819.7211 Application process for mentor firms to participate in

the program.

(a) Prime contractors interested in becoming a mentor firm must

submit a request to the NASA OSDBU to be approved under the program.

The application will be evaluated on the extent to which the company

plans to provide developmental assistance and that a balance is

represented among the size and SDB status of such potential proteges.

The information required in paragraph (b) of this section must be

submitted to be considered for approval as a mentor firm.

(b) A proposed mentor must submit the following information to the

NASA OSDBU:

(1) Certification that the mentor firm is currently performing

under at least one active approved subcontracting plan (small business

exempted) and that they are currently eligible for the award of federal

contracts;

(2) The cognizant NASA contract number(s), type of contract,

performance (including options), title of technical program effort,

name of NASA Program Manager (including contact information) and name

of NASA field center where support is provided;

(3) The number of proposed Mentor-Protege arrangements;

(4) Data on all current NASA contracts and subcontracts to include

the contract/subcontract number(s), period of performance, awarding

NASA installation or contractor and contract/subcontract value(s)

including options;

(5) Data on total (NASA) subcontracts awarded and SDB awards.

(6) Information on the proposed types of developmental assistance.

For each proposed Mentor-Protege relationship include information on

the company's ability to provide developmental assistance to the

identified protege firm and how that assistance will potentially

increase subcontracting opportunities for the protege firm, including

subcontracting opportunities in industry categories where SDBs are not

dominant in the company's current subcontractor base; and

(7) A Letter of Intent signed by both the mentor and protege(s).

Sec. 1819.7212 OSDBU review and approval process of agreement.

(a) Information and Letter of Intent is reviewed by NASA OSDBU.

NASA OSDBU will provide a copy of the submitted information to the

cognizant NASA technical program manager and contracting officer for a

parallel review and concurrence.

(b) If OSDBU approves the application, then the mentor

(1) Negotiates agreement with the protege; and

(2) Submits an original and two (2) copies of the agreement to NASA

OSDBU for approval by the NASA Mentor-Protege program manager, the NASA

technical program manager and the contracting officer.

assistance program.

(d) An approved agreement will become a part of the official

subcontracting plan, where applicable. Other agreements will be

incorporated into the contract.

(e) If OSDBU disapproves the application, then the mentor may

provide additional information for reconsideration.

Sec. 1819.7213 Agreement contents.

The contents of the agreement must contain:

(a) Names and addresses of mentor and protege firms and a point of

contact within both firms who will oversee the agreement;

(b) Procedures for the mentor firm to notify the protege firm,

OSDBU, and the contracting officer, in writing, at least 30 days in

advance of the mentor firm's intent to voluntarily withdraw from the

program;

writing at least 30 days in advance of the protege firm's intent to

voluntarily terminate the mentor-protege agreement. The mentor shall

notify the OSDBU and the contracting officer immediately upon receipt

of such notice from the protege;

(d) A description of the developmental program for the protege,

including the type of developmental assistance that will be provided by

the mentor firm to the protege firm, and a schedule for providing

assistance and criteria for evaluation of the protege's developmental

success;

(e) A listing of the number and types of subcontracts to be awarded

to the protege firm;

(f) Program participation term;

(g) Termination procedures;

(h) Plan for accomplishing work should the agreement be terminated;

and

(i) Other terms and conditions, as appropriate.

1819.7214 Developmental assistance.

The forms of developmental assistance a mentor can provide to a

protege include:

(a) Management guidance relating to

(1) Financial management,

(2) Organizational management,

(3) Overall business management/planning, and

(4) Business development;

(b) Engineering and other technical assistance;

(d) Progress payments based on costs. The customary progress

payment rate for all NASA contracts with small disadvantaged businesses

is 95 percent. This customary progress payment rate for SDBs may be

used by prime contractors;

(e) Advance payments. While a mentor can make advance payments to

its proteges who are performing as subcontractors, the mentor will only

be reimbursed by NASA for these costs if advance payments have been

authorized in accordance with statute and regulation; and

(f) Loans.

1819.7215 Obligation.

(a) Mentor or protege may voluntarily withdraw from the program as

mutually agreed by both mentor and protege.

(b) Mentor and protege firms will submit a ``lessons learned''

evaluation to the NASA OSDBU at the conclusion of the pilot program

period or the conclusion of their effort whichever comes first.

1819.7216 Internal controls.

The NASA OSDBU will manage the program. Internal controls will be

established by NASA OSDBU to achieve the stated program objectives (by

serving as checks and balances against undesired actions or

consequences) such as:

(a) Reviewing and evaluating mentor applications for realism,

validity and accuracy of provided information; and

(b) Reviewing quarterly progress reports submitted by mentors and

proteges on protege development to measure protege progress against the

master plan contained in the approved agreement.

1819.7217 Reports.

(a) Quarterly reports shall be submitted by the mentor to the NASA

mentor-protege program manager, NASA Headquarters OSDBU to include

information as outlined in 1819.7206(b).

(b) Proteges are encouraged to submit quarterly reports, to the

NASA mentor-protege program manager, on program progress as pertains to

their mentor-protege agreement.

reports, for the purposes of award fee determination, assessing the

prime contractor's performance in the mentor-protege program as

pertains to the technical effort and protege development.

(d) The NASA mentor-protege program manager will submit quarterly

reports to the cognizant contracting officer regarding participating

prime contractor's performance in the program for use in the award fee

determination process.

1819.7218 Program review.

At the conclusion of each year in the mentor-protege program, the

prime contractor and protege will formally brief the NASA mentor-

protege program manager, the technical program manager, and the

contracting officer during a formal program review regarding program

accomplishments as pertains to the approved agreement.

1819.7219 Solication provisions and contract clause.

(a) The contracting officer shall insert the provision at 1852.219-

77, NASA Mentor-Protege Program, in all solicitations and contracts

with subcontracting plans or that offer subcontracting opportunities,

regardless of the dollar value of the prime contract.

(b) The contracting officer shall insert the provision at 1852.219-

78, Evaluation of Prime Contractor Participation in the Mentor-Protege

Program, in all solicitations containing the provisions at 1852.219-77,

NASA Mentor-Protege Program or FAR 52.219-9, Small Business and Small

Disadvantaged Business Subcontracting Plan.

Mentor Responsibility and Evaluation, in contracts where the prime

contractor is a participant in the NASA Mentor-Protege Program.

PART 1852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

a. Sections 1852.219-77, 1852.219-78, and 1852.219-79 are added to

read as follows:

1852.219-77 NASA Mentor-Protege Program.

As prescribed in 1819.7219(a), insert the following provision:

NASA Mentor-Protege Program (Jan 1994)

(a) Prime contractors, including certain small businesses, are

encouraged to participate in the NASA pilot mentor-protege program

for the purpose of providing developmental assistance to eligible

small disadvantaged businesses to enhance their capabilities and

increase their participation in NASA contracts.

(b) The pilot program consists of:

(1) Mentor firms, which are prime contractors with at least one

active subcontracting plan;

(2) Protege firms, which are small disadvantaged business (SDB)

concerns, include the eligible participants as set forth in Public

Law 101-144, as amended by Public Law 101-507, as follows:

``Small Business concerns or other organizations owned or

controlled by socially and economically disadvantaged individuals

(within the meaning of section 8(a) (5) and (6) of the Small

Business Act (15 U.S.C. 637(a) (5) and (6)), including Historically

Black Colleges and Universities and Minority Educational

Institutions''. For the purpose of this section economically and

socially disadvantaged individuals shall be deemed to include

women;''

(3) Mentor-Protege agreements, approved by the NASA Office of

Small and Disadvantaged Business Utilization;

(4) Potential of payment of additional award fee for voluntary

participation and successful performance in the mentor-protege

program.

1819.72, means providing technical, managerial and financial

assistance to aid SDBs in developing requisite high-tech expertise

and business systems to compete successfully for NASA contracts and

subcontracts.

(d) Contractors interested in participating in the pilot program

are encouraged to contact the NASA OSDBU, Washington, DC 20546,

(202) 358-2088, for further information.

(End of clause)

1852.219-78 Evaluation of Prime Contractor Participation in the NASA

Mentor-Protege Program.

As prescribed in 1819.7219(b), insert the following provision:

Evaluation of Prime Contractor Participation in the NASA Mentor-Protege

Program (Jan 1994)

This subfactor will consider the proposed participation and

extent of developmental assistance to be provided by a prime

contractor to small disadvantaged businesses.

1852-219-79 Mentor Requirements and Evaluation.

As prescribed in 1819-7219(c), insert the following provision:

Mentor Requirements and Evaluation (Jan 1994)

(a) The purpose of the NASA Mentor-Protege Program (Program) is

for a NASA prime contractor to provide developmental assistance to a

small disadvantaged business (SDB). The Mentor's active

participation in the Program, in compliance with the terms of the

negotiated Mentor-Protege Agreement, demonstrates both a commitment

to achieve the goal of its contractual subcontracting plan and a

commitment to increase the participation of SDBs in NASA contracts

and subcontracts. This commitment will be recognized in determining

the Mentor's performance fee.

(b) The OSDBU will evaluate the contractor's performance through

the Performance Evaluation process. The evaluation will consider the

following:

(1) Specific actions taken by the contractor, during the

evaluation period, to increase the participation of SDBs as

subcontractors and suppliers;

(2) Specific actions taken by the contractor during this

evaluation period to develop the technical and corporate

administrative expertise of the SDBs as defined in the agreement;

(3) To what extent the Protege has met the developmental

objectives in the agreement; and

(4) To what extent the firm's participation in the Mentor-

Protege Program resulted in the Protege receiving competitive

contract(s) and subcontract(s) from private firms and agencies other

than the Mentor.

NASA mentor-protege program manager, NASA Headquarters OSDBU to

include information as outlined in 1819.7206(b).

(d) The Mentor will notify the OSDBU and the contracting

officer, in writing, at least 30 days in advance of the mentor

firm's intent to voluntarily withdraw from the program or upon

receipt of a Protege's notice to withdraw from the Program;

(e) Mentor and protege firms will submit a ``lessons learned''

evaluation to the NASA OSDBU at the conclusion of the pilot program

period or the conclusion of their effort whichever comes first. At

the conclusion of each year in the mentor-protege program, the prime

contractor and protege will formally brief the NASA mentor-protege

program manager, the technical program manager, and the contracting

officer during a formal program review regarding program

accomplishments as pertains to the approved agreement.

(End of clause)

[FR Doc. 94-2876 Filed 2-8-94; 8:45 am]

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