NASA Mentor-Protege Program Policies

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1819 and 1852

RIN 2700-AB52

NASA Mentor-Protege Program Policies

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

National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Final rule establishes 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 Socially and Economically Disadvantaged

Businesses 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.

EFFECTIVE DATE: March 24, 1995.

ADDRESSES: NASA Office of Small and Disadvantaged Business Utilization,

NASA Headquarters, (Code K), Washington, DC 20546.

FOR FURTHER INFORMATION CONTACT:

Ms. Rae C. Martel, Telephone: (202) 358-2088.

SUPPLEMENTARY INFORMATION:

Background

NASA published a Proposed Rule on February 9, 1994 amending the

NASA FAR Supplement to implement a Mentor-Protege Program. Having

reviewed the public comments on the Proposed Rule, NASA is publishing

this Final Rule with certain changes to the provisions set forth in the

Proposed Rule. Many of the comments represented editorial

recommendations or affirmations for the program. Also, a number of

comments were duplicative on subject matter. However, the underlying

Mentor-Protege policy has not been significantly altered as a result of

changes made in response to comments. The most suggestive comments and

their disposition are discussed in the preface of this Final Rule. This

Final Rule serves as the regulatory basis for the Mentor-Protege

Program provisions. For the pilot phase of the program, Mentor-Protege

applications and activity are limited to cost-plus-award-fee contracts.

The concept for the NASA Mentor-Protege Program includes the

establishment of a Prime/Subcontractor relationship between the mentor

and protege firm. In the role of subcontractor, the protege will

contribute to the contract efforts; however, to enhance contractual

performance, the protege will receive developmental assistance, as

described in section 1819.7214, from the prime contractor mentor firm.

For consistency with Section 7105 of the Federal Acquisition

Streamlining Act, Public Law 103-355, the categories of eligible

entities defined in section 1819.7202 of the final rule include ``Small

Disadvantaged Businesses, Historically Black Colleges and Universities

and Minority Institutions''. Throughout this final rule, these

categories are collectively identified by the term ``protege''.

NASA received two hundred and twenty-seven comments in response to

the Proposed Rule. Several commenters suggested that NASA provide a

definition of ``high-tech.'' The agency high-tech definition is

provided in 1819.7202 to provide clarity regarding the Mentor-Protege

Program's targeted areas of contract activity. The Mentor-Protege

Program, a key element of NASA's socioeconomic program, is designed to

increase the participation of the entities defined as protege in the

agency's core mission. Many commenters suggested that NASA modify the

rule to allow reimbursement to primes for expenses incurred in

providing developmental assistance to proteges. The coverage in the

final rule explains that expenses incurred by mentor firms in providing

developmental assistance to their protege/subcontractors are allowable.

The language in paragraph 1819.7205 states that the basic condition for

Mentor-Protege requires a prime/subcontractor relationship between the

mentor and protege. The costs will be recognized as part of enhancing

contractor performance and are allowable consistent with the

definitions and requirements in FAR Part 31. A large number of

commenters requested that NASA provide clarity in the final rule

regarding the fee arrangement and the earning of award fee. Future

award fee plans of NASA contracts will be structured such that 15

percent of the available award fee is allocated for Small Disadvantaged

Business Utilization. Mentor-Protege will be evaluated under Small

Disadvantaged Utilization as a separate element and allocated a

separate 5 percent of the 15 percent to evaluate the prime's

performance in the Mentor-Protege Program. For purposes of earning

award fee, the Mentor firm's performance will be evaluated against the

measures described in the NASA FAR Supplement provisions at 1852.219-

79. Many commenters recommended that while NASA explains the

portability of credit features from the statute prescribing the DOD

Mentor-Protege Program that are available to NASA prime contractors, no

provision has been specifically made for credit against SDB goals with

a multiplier similar to the DOD Mentor-Protege Program. A multiplier

option is not included in Section 1819.7204 of the NASA program since

no statute or legislation exists to authorize such an option. Section

1819.7204 includes only the features authorized in the statute creating

the DOD program that can be extended to civilian agencies. A number of

commenters commended NASA for including a provision allowing proteges

to have multiple mentors. However, a number of commenters expressed

concern about this provision. Some concerns centered about proteges

with multiple mentors maintaining confidentiality; others were

concerned with proteges receiving conflicting guidance from multiple

mentors. It is recommended that Mentor-Protege agreements contain some

certification regarding confidentiality and non-disclosure as is

routinely utilized in business relationships. During the review of

Letters of Intent and Agreements, NASA will scrutinize the intended

areas of developmental assistance for duplication in certain

[[Page 15498]] areas that could lead to conflicting guidance. However,

some duplication may be unavoidable but appropriate and beneficial from

successful large aerospace firms. Several prime contractors expressed

concern with the requirement at Section 1819.7217 for quarterly

reporting. In the final rule, the reporting frequency is changed from

quarterly to semi-annual to parallel the Standard Form 294 submission.

Several commenters suggested that NASA delete the provision encouraging

proteges to submit reports because of privity of contract; others

recommended that any report from a protege should be jointly prepared

and submitted through the mentor. This provision remains unchanged in

the final rule. The language in 1819.7217(b) reads that ``proteges are

encouraged to submit quarterly reports on program progress as it

pertains to the Mentor-Protege agreement.'' While reporting is not

mandatory for protege firms, a self evaluation of their progress under

the terms of the approved agreement is desired by the NASA OSDBU. Since

the Mentor-Protege agreement is approved by NASA, a review of progress

against that approved agreement will not violate privity of contract.

Several commenters suggested that NASA modify the rule to allow for

flowing down program participation to lower tier, large business

subcontractors where it makes sound financial sense. Because of privity

of contract issues with the mentor prime contractors, no such provision

will be included in the pilot phase of the Mentor-Protege Program.

Several commenters suggested that NASA expand the program to include a

provision allowing that a protege may be retained, and receive

noncompetitive subcontract awards, until it has grown to more than

twice the size of the SIC code. Such provision cannot be included

without specific legislative authorization. Several commenters asked if

a mentor could make noncompetitive awards to any protege subcontractor

with whom it plans to work or is the mentor limited to noncompetitive

awards to only those protege firms which the mentor is currently using

under its DOD Mentor-Protege Program. NASA prime contractors, who are

DOD mentors, are authorized to award subcontracts noncompetitively

under their NASA contracts to the proteges which they are assisting

under the DOD program in accordance with Public Law 101-510, Section

831(f)(2). In addition, NASA prime contractors who are also approved

mentors under the NASA program may make noncompetitively awards to

protege firms identified in letters of intent and approved agreements

for the NASA program. Several commenters recommend that NASA include

additional mentor-provided developmental assistance features that will

not be required to be paid back: property; rent-free use of facilities

and/or equipment; and assignment of personnel to protege. Section

1819.7214 has been modified in the final rule to include these

features. Several commenters asked if it is NASA's intent that the

Mentor-Protege requirement may be included as part of the evaluation

factors even though a prime contractor may not sign up to participate

in the program. In all NASA solicitations for full and open

competition, Small Disadvantaged Business Utilization is a stand-alone

evaluation factor under Mission Suitability, which includes

consideration for Mentor-Protege participation. While voluntary and

better-suited for certain prime contractors, participation in the

Mentor-Protege program may provide many primes the opportunity to

substantially increase their subcontracting activity while also

achieving other agency and program objectives as delineated in

1819.7207. All things being equal, the firm that proposes in compliance

with the Government's subcontracting goals and includes Mentor-Protege

activity will enhance its competitive position. Several commenters

asked if a NASA prime who is currently a DOD mentor has to apply and be

approved for the NASA Mentor-Protege Program. Any firm that seeks to

participate in the NASA Mentor-Protege Program must apply to NASA, see

Section 1819.7211(a). The discussion at 1819.7204 only highlights the

portability of features from the DOD Mentor-Protege Program that

extends to NASA prime contractors. This section does not address

approved NASA mentors, only NASA contractors who are approved DOD

Mentors. Several commenters sought clarity regarding measurement or

definition of ``good faith,'' which is what NASA mentors will be held

to beyond transferring credit from activity in the DOD activity to NASA

subcontracting plans. ``Good faith'' will be measured by the amount and

quality of developmental assistance provided by mentors from the

measures set forth at 1819.7214 and as described in the clause at

1852.219-79. A discussion of this activity should be included in the

reports submitted by the mentor and in the protege's reports, if any.

Several commenters suggested that NASA modify the rule so that Mentor-

Protege applications may be either contract-specific or broader for

multiple-contract agreements. There is no change in the rule. Since the

Mentor-Protege relationship involves a prime/subcontractor

relationship, the application and activity must be contract-specific.

Several commenters asked if awards to proteges on a noncompetitive

basis under this program will be viewed as an adequate and acceptable

justification for other than full and open competition. The requirement

for full and open competition for subcontractors is a matter of

regulatory policy, not statute. The Associate Administrator for

Procurement is approving an exception to this policy for approved

Mentor-Protege agreements. Several commenters state that with this

voluntary program participation, NASA states that a 30-day notice

should be provided by either party to withdraw. The commenters asked

whether a decision to dissolve the relationship that occurs during a

contract period would impact the amount of award fee available to the

prime contractor. Notwithstanding the 30-day notice provision at

1819.7213(h), the requirement exists that agreements must contain a

plan for accomplishing the work in progress should the agreement be

terminated. The agreement, containing this plan, must be approved by

NASA prior to implementing the developmental assistance program.

Approval of the plan will ensure that the technical performance will

continue satisfactorily and thereby eliminating the possibility for

negative impact to the prime. The remaining major comments will be

addressed individually as follows. One commenter stated that the

application process indicates that the application is only for a

particular contract which the contractor is currently performing. The

commenter stated that this would appear to eliminate any Mentor-Protege

arrangements which are part of a proposal. If a NASA prime is allowed

to propose a Mentor-Protege arrangement as part of its proposal, the

commenter stated that the evaluation criteria should be adjusted for

scoring the protege's relevant experience and past performance for

areas of work in which they are to be mentored. The prime should not be

penalized for inclusion of a less-experienced protege. The application

process is intended to recognize both instances--Mentor-Protege under a

particular contract currently being performed and proposals including

Mentor-Protege arrangements. In response to a competitive cost-plus-

award-fee [[Page 15499]] procurement, the contractor's proposal will be

submitted in accordance with the evaluation methodology and

instructions set forth in the solicitation. However, prior to proposal

submission the letter of intent and the agreement should be submitted

to the OSDBU for approval. The letter of intent and OSDBU approved

agreement should be submitted as part of the proposal. In competitive

proposals that include a Mentor-Protege arrangement, no adjustment will

be made for scoring the protege's relevant experience and past

performance since the protege's record should demonstrate ability to

perform the subcontracting job outlined for a such a firm. The

protege's performance in non-traditional areas is essentially

guaranteed by the prime's commitment to successfully mentor said firm

to perform. In these instances, the proposal should reflect details of

the Mentor-Protege relationship as related to performance under the

proposed contract to provide an understanding of the work plan

relationship and to facilitate a complete evaluation and scoring. This

commitment and performance by mentors form the basis for earning the

associated fee dollars. One commenter requests clarity regarding the

disposition of reports to be submitted by the NASA technical program

manager. They also seek clarity regarding the roles and interactions of

the NASA Mentor-Protege program manager, the NASA technical program

manager, and the contracting officer in the award fee determination

process. The NASA Mentor-Protege program manager, a senior official in

the NASA Headquarters Office of Small and Disadvantaged Business

Utilization, has direct authority for the program and is the designated

recipient for all required reports. The NASA Mentor-Protege program

manager will submit quarterly reports to the contracting officer for

use in the semi-annual award fee determinations as a result of

monitoring activity and work site reviews. The contracting officer is

the responsible NASA official with direct authority for the contract.

The NASA technical program manager, provides technical direction and as

such also provides quarterly evaluations of the contractor's technical

performance for the purpose of semi-annual fee determinations.

Therefore, the program manager will also include in the quarterly

reports an assessment of the contractor's performance in the Mentor-

Protege Program as it pertains to the technical effort and protege

development. One commenter stated that considering NASA's current high

SDB percentage goals included in solicitations, expecting a prime to

exceed these already high SDB percentages is unrealistic. Further, the

contractor states that if incentive eligibility is based upon a prime

exceeding the NASA 8 percent goal (irrespective of a contract's SDB

goal), then a prime would consider program participation as a level of

risk. Mentor-Protege is independent of establishment of SDB

subcontracting goals in specific contracts. The 8 percent goal is an

agency goal; each procurement includes an SDB goal that represents the

maximum practical opportunity as required by public law. The Mentor-

Protege program represents only one means of increasing SDB

participation--with emphasis on high tech effort. Program success will

be determined by the measures cited at 1819.7207. Since the Mentor-

Protege relationship will be contract-specific, the contractor's

performance will be measured against negotiated goals, the Mentor-

Protege agreement, and the other factors cited in 1819.7206. A

commenter recommended that NASA delete provisions at 1819.7213 (b) and

(c), suggesting that there is no privity of contract, and substitute

them with a provision allowing for after-the-fact notification. No

change is made to these subsections. The NASA position is that advance

notification along with a work plan for continuation of work does not

affect privity of contract. One commenter recommended modification in

the final rule such that annual briefings of the Mentor-Protege Program

success should be presented as part of the mentor's normal program

review with the NASA Center it supports. The NASA OSDBU would be

invited to participation at the center; the pertinent protege could, at

the mentor's discretion, be invited to make their own presentation.

Rationale: Mentor-Protege reviews held as part of a center's normally-

scheduled program review would significantly reduce cost to NASA and

contractors thereby maintaining privity between the mentor and the

portege. Section 1819.7218 of the Final Rule has been changed to

include such review in program reviews. Where applicable, separate

reviews will be scheduled for other contracts at the NASA work site.

One commenter recommends that NASA provide the mentor (formally or

informally) with information on any deficiencies noted in the

application so that the deficiencies can be quickly corrected, if the

Mentor so chooses. If the Mentor does not correct the deficiencies

within a reasonable time unilaterally established by NASA, then the

application should be denied, and the whole process would start over. A

commenter suggested that NASA limit application information to two

prior years and that NASA specify the minimum information for letter of

intent. The final rule incorporates both recommended changes in section

1819.7211. A commenter suggested that since the proposed rule making

does not take into account a prior business relationship between the

mentor and protege, some restrictions should be included to prevent

overlapping management (e.g. Board of Directors) and business

arrangements such as partnerships in which the Mentor has a direct

financial interest in the business success of the protege or can take

credit for developmental assistance which would be a part of normal

business development for the mentor. Proposed Mentor-Protege agreements

will be disapproved where the protege firm's owner was a former

employee of the proposed mentor or when the protege firm itself

represents an entity in which the mentor firm holds a financial

interest or ownership. However, mentor firms that hold partial

ownership (up to 10%) of a proposed protege firm due to their approved

participation in the DOD Mentor-Protege Program shall not negatively

impact participation in the NASA program.

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.). The Mentor-Protege

Program is intended to have a positive economic effect on small

businesses by enhancing their ability to participate in both Government

and commercial contracting entities. [[Page 15500]]

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 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--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.Sec.

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 Solicitation provision and contract 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 Small Disadvantaged Business concerns,

Historically Black Colleges and Universities, and Minority Institutions

in enhancing their capabilities to perform NASA contracts and

subcontracts, foster the establishment of long-term business

relationships between these entities and NASA prime contractors, and

increase the overall number of these entities that receive NASA

contract and subcontract awards.

1819.7202 Definitions.

(a) Historically Black Colleges and Universities (HBCU), 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.

HBCUs include any nonprofit research institution that was an integral

part of such a college or university before November 14, 1986.

(b) Minority Institutions (MI), as used in this subpart, means

institutions verified by the Secretary of Education to meet the

criteria set forth in 34 CFR 637.4. MIs include Hispanic-serving

institutions as defined by 20 U.S.C. 1059c(b)(1).

(c) Small Disadvantaged Business concern (SDB), as used in this

subpart, means small business concerns owned and controlled by socially

and economically disadvantaged individuals (as those terms are used in

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

and small business concerns owned and controlled by women (see section

8(d) of the Small Business Act (15 U.S.C. 637(d)) as amended by Public

Law 103-355.

(d) High-Tech: As used in this subpart, means research and/or

development efforts that are within or advances the state-of-the-art in

a technology discipline and are performed primarily by professional

engineers, scientists, and highly skilled and trained technicians or

specialists.

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. Neither shall

partial ownership, up to 10 percent of a Department of Defense (DOD)

sanctioned Protege firm by its DOD mentor constitute affiliation by

NASA.

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 (Public Law 101-510, Section 831, as amended by Public

Law 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 noncompetitively under their NASA contracts to the

proteges which they are assisting under the DOD program (Public Law

101-510, Section 831(f)(2)).

(c) NASA prime contractors may count the costs of developmental

assistance provided to proteges being assisted under the DOD program

toward meeting the goals in their subcontracting plans under their NASA

prime contracts (Public Law 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 program to NASA

subcontracting plans.

1819.7205 General policy.

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

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

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

will enter into agreements with eligible entities as defined in

1819.7202 as Proteges to provide appropriate developmental assistance

to enhance the capabilities of Proteges 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 SDB's, may be

approved as mentors. An active mentor-protege arrangement requires the

protege to be a subcontractor under the mentor's prime contract with

NASA.

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

March 24, 1995. During this period, eligible mentor firms, which have

received approval by NASA to participate in the program pursuant to

section 1819.7212, may enter into agreements with protege

firms. [[Page 15501]]

(c) For the pilot phase of the program, mentor-protege activity

will be limited to cost-plus-award-fee contracts.

(d) Costs incurred by a mentor to provide developmental assistance,

technical or managerial assistance described in section 1819.7214, are

allowable.

1819.7206 Incentives for prime contractor participation.

(a) During source selection, Mentor-Protege will be evaluated under

SDB Utilization which is a stand-alone evaluation subfactor under the

Mission Suitability.

(b) Under cost-plus-award fee contracts, approved mentor firms

shall be eligible to earn award fee associated with their performance

as a mentor by performance evaluation period. The award fee plans of

all NASA contracts are structured such that 15 percent of the available

award fee is allocated for Small Disadvantaged Business Utilization.

Mentor-Protege performance will be evaluated under Small Disadvantaged

Business Utilization as a separate element and allocated a separate 5

percent of the 15 percent award fee. For purposes of earning award fee,

the Mentor firm's performance shall be evaluated to determine the

degree to which the participation went beyond (exceeded) the negotiated

SDB goals commitment. Specifically, the Mentor firm's performance will

be evaluated against the criteria described in the NASA FAR Supplement

provision at 1852.219-79.

1819.7207 Measurement of program success.

The overall success of the NASA Mentor-Protege program encompassing

all participating Mentors and proteges 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 proteges 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);

(c) An increase in the number and dollar value of subcontracts

awarded to a protege firm by its mentor firm; and

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

categories where they 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 48 CFR (FAR)

19.7; and

(3) Small Business prime contractors that can provide developmental

assistance to enhance the capabilities of proteges 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 firms

(e.g., a protege whose size is no greater than 50 percent of the size

standard applicable to the SIC code assigned to a contracting

opportunity); and

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

business relationships.

(3) High-Tech firms as proteges.

1819.7209 Protege firms.

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

(1) An SDB, HBCU or MI as those terms are defined in 1891.7202:

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

to be provided by the protege under its subcontract 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

the requirements set forth in paragraph (a) of this section. Mentor may

rely in good faith on written representations by potential proteges

that they meet the specified eligibility requirements.

(c) Proteges may have multiple mentors. Proteges participating in

mentor-protege programs in addition to the NASA program should maintain

a system for preparing separate reports of mentoring activity for each

agency's program.

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 the types of

protege firms listed in 1819.7208(b).

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

(c) The selection of protege firms by mentor firms may not be

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

(d) Any protest regarding the size or eligibility status of an

entity selected by a mentor to be a protege shall be referred solely to

the Associate Administrator, Office of Small and Disadvantaged Business

Utilization (OSDBU), NASA for resolution. In its discretion, NASA may

seek an advisory opinion from the Small Business Administration.

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. 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 eligible, as of the date of application,

for the award of Federal contracts;

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

of 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 number and dollar amount of subcontracts awarded

under NASA prime contracts within the past 2 years and the number of

dollar value of such subcontracts awarded to entities defined as

proteges.

(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 these

entities are not dominant in the company's current subcontractor base;

and

(7) A Letter of Intent signed by both parties. At a minimum, the

Letter of Intent must include the stated commitment that the parties

intend to [[Page 15502]] enter into a mentor-protege agreement under

the NASA program, that they intend to cooperate in the developmental of

a suitable development assistance program to meet their respective

needs, and that they agree to comply with the obligations in section

1819.7215 and all other provisions governing the program.

1819.7212 OSDBU review and approval process of agreement.

(a) The information specified in 1819.7211(b) is reviewed by NASA

OSDBU. The review by the NASA OSDBU will be completed no later than 30

days after receipt by the 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.

(c) Upon agreement approval, the mentor may implement developmental

assistance program.

(d) An approved agreement will be incorporated into the mentor's

contract with NASA. It should be added to the subcontracting plan in

contracts which contain such a plan.

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

provide additional information for reconsideration. The review of any

supplemental material will be completed within 30 days after receipt by

the OSDBU. Upon finding deficiencies that NASA considers correctable,

the OSDBU will notify the mentor and request information to be provided

within 30 days that may correct the deficiencies.

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;

(c) Procedures for a protege firm to notify the mentor firm in

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 type of developmental program that will be

provided by the mentor firm to the protege firm, to include a

description of the subcontract work, 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;

(c) Noncompetitive award of subcontracts under NASA contracts;

(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 small

disadvantaged businesses 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;

(f) Loans;

(g) Rent-free use of facilities and/or equipment;

(h) Property; and

(i) Temporary assignment of personnel to protege for purpose of

training

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.

(a) 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:

(1) Reviewing and evaluating mentor applications for realism,

validity and accuracy of provided information;

(2) Reviewing semi-annual progress reports submitted by mentors and

proteges, if any, on protege development to measure protege progress

against the master plan contained in the approved agreement.

(3) Site visits to NASA installation where Mentor-Protege activity

is on-going.

(b) NASA may terminate Mentor-Protege agreements if NASA determines

that such actions are in NASA's interest. These actions shall be

approved by the NASA OSDBU. NASA will terminate an agreement or exclude

a particular entity by sending a written notice to the affected party

specifying the action being taken and the effective date of that

action. Termination of an agreement does not constitute a termination

of the subcontract between the Mentor and the Protege. A plan for

accomplishing the subcontract effort should the agreement be terminated

shall be submitted with the agreement, as required in 1819.7213(h).

1819.7217 Reports.

(a) Semi-annual 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 semi-annual reports, to the

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

their mentor-protege agreement. However, costs associated with the

preparation of these reports will not be reimbursed by the Government.

(c) The NASA technical program manager shall include an assessment

of the Prime Contractor's (Mentor's) performance in the Mentor-Protege

program in his quarterly `Strengths and Weaknesses' evaluation report.

A copy of these comments, as pertains to the technical effort and

protege development, will be provided to NASA Headquarters OSDBU and

the Contracting Officer.

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

[[Page 15503]] annual 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, as appropriate, will formally brief the

NASA mentor-protege program manager, the technical program manager and

the contracting officer regarding program accomplishments as pertains

to the approved agreement. This review will be incorporated into the

normal program review, where applicable. A separate review will be

scheduled for other contracts to be held at the NASA work site

location.

1819.7219 Solicitation provision and contract clauses.

(a) The contracting officer shall insert the clause at 1852.219-77,

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

subcontracting plans or in the case of small business set-asides

exceeding $500,000 ($1,000,000 for construction) that offer

subcontracting opportunities.

(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 and FAR 52.219-9, Small Business and Small

Disadvantaged Business Subcontracting Plan.

(c) The contracting officer shall insert the clause at 1852.219-79,

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

protege entities to enhance their capabilities and increase their

participation in NASA contracts.

(b) The pilot program consists of:

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

least one active subcontracting plan or eligible small businesses;

(2) Protege, which are subcontracting under the prime

contractor, include Small Disadvantaged Business (SDB) concerns

including women-owned small businesses, Historically Black Colleges

and Universities, and Minority Institutions, as those terms are

defined in NASA FAR Supplement 1819.7202.

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

Small and Disadvantaged Business Utilization (OSDBU);

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

participation and successful performance in the mentor-protege

program.

(c) Mentor participation in the program, described in 48 CFR

1819.72, means providing technical, managerial and financial

assistance to aid proteges in developing requisite high-tech

expertise and business systems to compete for and successfully

perform 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 (DEC 1994)

NASA will consider (evaluate) the proposed participation and

extent of developmental assistance to be provided by a prime

contractor to protege firms as an approved Mentor in the NASA

Mentor-Protege Program under the SDB Utilization subfactor under

Mission Suitability.

1852.219-79 Mentor Requirements and evaluation.

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

Mentor Requirements and Evaluation (DEC 1994)

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

NASA prime contractor to provide developmental assistance to certain

subcontractors qualifying as proteges. Eligible proteges include

Small Disadvantaged Business concerns including women-owned small

businesses, Historically Black Colleges and Universities, and

Minority Institutions, as those terms are defined in NASA FAR

Supplement 1819.7202.

(b) NASA 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 proteges as

subcontractors and suppliers;

(2) Specific actions taken by the contractor during this

evaluation period to develop the technical and corporate

administrative expertise of a protege 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.

(c) Semi-annual 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).

(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 which ever comes first. At

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

contractor and protege, as appropriate, 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.

(f) NASA may terminate Mentor-Protege agreements and exclude

Mentor or Protege firms from participating in the NASA program if

NASA determines that such actions are in NASA's interest. These

actions shall be approved by the NASA OSDBU. NASA shall terminate an

agreement by delivering to the contractor a Notice specifying the

reason for termination and the effective date. Termination of an

agreement does not constitute a termination of the subcontract

between the mentor and the protege. A plan for accomplishing the

subcontract effort should the agreement be terminated shall be

submitted with the agreement as required in 1819.7213(h).

(End of clause)

[FR Doc. 95-7051 Filed 3-23-95; 8:45 am]

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