**Christopher Teti**

**General Services Administration, Mid-Atlantic Region**

**GSAR Case 2006-G501**

**Comments on Mentor Protege Program:**

**Paragraph 519.7003, General Policy**. Paragraph 519.7003(b) notes that
a small business firm may also seek to be a Mentor. But the new GSAR
Subpart then proceeds to concentrate primarily on the inclusion of
Mentor-Protege agreements in Subcontracting Plans. Subcontracting Plans
are not required of small business firms, and hence the new Subpart
needs to address how Mentor-Protegee agreements are incorporated into
small business prime awards, and how evaluation credit during source
selection is given to small business firms that have Mentor-Protegee
agreements with their small business subcontractors.

**Paragraph 519.7004, Incentive for Prime Contract Participation.**
Considering the intense application process described later in the
document, and the amount of resources and effort Mentors would need to
invest, there are virtually no real incentives offered here. Specific
comments follow:

\(1\) Firstly, paragraph (b) does not appear to belong in this section
at all, since it points out that the Mentor's costs are not reimbursable
directly under any GSA contract but may be reimbursable once indirect
cost rates are established with the cognizant audit agency. How does
this relate to incentives for Mentors?

\(2\) Also, indirect cost rates are generally established for cost
contracts and certain special fixed price contracts (i.e., fixed price
redeterminable). Firm fixed price contracts are either competitive (not
requiring separate negotiation or establishment of a specific indirect
cost rate), or are sole source (in which case indirect rates are
negotiated on a contract-by-contract basis, given that a contractor's
overhead experience will change from year to year.) Many fixed priced
contracts are too small to be affected by cost and pricing data
requirements (i.e., below \$650,000). The references to indirect cost
rates seem to be entirely out of place, and would often be inappicable
to many competitive (or lower priced) firm fixed price GSA contracts.

\(3\) This section notes that, as an incentive, Contracting Officers may
give evaluation credit under FAR 15.101 during source selection.
Firstly, the sentence published in the Federal Register at GSAR
519.7004(c) is grammatically incomplete, reading "\...may give mentors
evaluation credit under FAR 15.101-1 considerations for subcontracts
awarded\...." Also, FAR 15.101-1 discusses the **tradeoff** process. The
natural implication is that the evaluation credit is not applicable to
**lowest-price technically acceptable** source selection, given that
tradeoffs are not permitted in that scenario. While this is logical, it
should be clearly stated, for it substantially limits the circumstances
under which this "incentive" could be applied. Careful distinction is
also required, since the same paragraph goes on to say that past
compliance with subcontracting plans (presumably including those that
contain Mentor-Protege agreements) can be considered not only as part of
past performance evaluation (again, presumably under the Tradeoff
scenario), but also as part of Responsibility Determinations.
Responsibility Determinations are made regarless of whether the Tradeoff
or LPTA scenario is used, so the paragraph as written is muddy in regard
to the distinction between the two types of source selection.

\(4\) Paragraph 519.7004 (d) notes that once a year, GSA may present a
non-monetary award to the most effective Mentor. What would that be? How
much of an incentive would such a non-monetary award be, given once a
year to just one firm?

\(5\) Paragraph 519.7004(e) discusses an Annual Conference on the
Mentor-Protege program, participation in which is voluntary for Mentors
and Proteges. What is this doing in a paragraph about incentives?

\(6\) Overall, there are no true incentives offered for the time and
effort the Mentor Program would require.

**Paragraph 519.7009, Application Process for Mentor Firms to
Participate in the** **Program**. This paragraph notes that a large
business Mentor's application must include a statement that the firm is
currently performing under at least one active approved subcontracting
plan. However, paragraph 519.7006 states that Mentors must either
currently be operating under an approved subcontracting plan under a
negotiated award, OR have operated under one for a contract awarded
within the past five years. Please clarify. Could a mentor's application
refer to a former subcontracting plan within the five year period? Could
it refer to a sealed bid subcontracting plan?

In addition, Paragraph 519.7009(b) is sometimes unclear. The application
must include data on all current GSA contracts, including "type of
contract." Please specify what this means: fixed price, cost, time and
materials? Or construction, services, supply? "Type of contract" can
mean many things. Also, paragraph 519.7009(b), as published in the
Federal Register, requires the following to be included in applications:
"technical Program effort(s) (Program Title)." What does this mean?

Most importantly, this paragraph does not require any **specific**
contract or contracts to be identified as one(s) in which the Protegee
will perform as a subcontractor. It is clear that the application must
include information on all currently awarded GSA contracts, but not
every current contract awarded to a potential Mentor will necessarily
have a subcontracting possibility for a Protegee. And, if more than one
Protege is proposed, they may have different capabilities. And yet,
later in the new subpart, it indicates that the Contracting Officer and
Program Manager for a specific contract (or contracts) will review and
concur on the Mentor's application and the Mentor-Protegee agreement.
Once an application is submitted it should be clear, in the application
itself, which contracts (already awarded or undergoing negotiation) will
be initially affected, and hence which COs and Program Managers will
have review, and which contracts will have their Subcontracting Plans
revised to include the Mentor-Protegee Agreement. The guidance, overall,
is not very clear as to how the separate application process affects the
award of existing solicitations, or the administration of awarded
contracts.

**Paragraph 519.7010, Application Review**. This paragraph sets forth a
process in which the GSA Mentor-Protege Program Manager reviews the
application, during a period in which time the affected Contracting
Officer and Technical Program Manager also review the document. Once the
application is approved, the Mentor and Protege execute the
Mentor-Protege Agreement, and again, the GSA Mentor-Protege Program
Manager, the affected CO(s) and Technical Program Managers have
concurrent reviews of the actual Agreement. Why wouldn't Mentors be
encouraged to include the draft of the Mentor-Protege agreement(s) in
the initial application, thus saving much time and review? Any concerns
about the content of the draft Agreement could be resolved as part of
the application process, and once the draft Agreement is executed,
additional review would be limited to a check that the contents of the
final Agreement(s) match the Draft(s), and resolution of any such
changes in content. Mentors would be required to highlight any
additional changes made from the draft Agreement to the Final version.

**Paragraph 519.7015. Reports**. This paragraph requires Mentors to
submit semi-annual reports, with input from their Protege(s). I suggest
that a standard outline for the content and format of the reports be
developed, in order to assist Mentors in completing the reports, and to
ease review of the reports by GSA.

**Paragraph 519.7017, Contract Clauses**. Two new clauses are provided.
The first, "GSA Mentor-Protege Program" is required in all unrestricted
solicitations and contracts that exceed the simplified acquisition
threshold. The second, "Mentor Requirements and Evaluation" is required
on any solicitation exceeding the simplified acquisition threshold
(there is no reference to unrestricted solicitations). Comments:

\(1\) The new GSAR Subpart relies extensively on the incorporation of
Mentor-Protegee Agreements into Subcontracting Plans. Subcontracting
Plans are not required under \$550,000 (or under \$1 Million for
Construction). In any event, the use of the simplified acquisition
threshold seems much too low for a new program that has many details to
be worked out. The threshold for use of the clauses, and for the
extensive efforts a Mentor is meant to pursue under any actual contract,
should be at a higher level, at least commensurate with the
Subcontracting Plan threshold. This is not to say that once a Protege is
benefitting from the Mentor's guidance under an Agreement incoroporated
into the subcontracting plan for a \$1.5 Million construction contract,
that the benefits are then forever limited to that contract. Instead,
the initial investment in time and resources **begins** with larger
contracts, and can have future effects on the Protege's ability to
obtain larger and smaller subcontract awards (from the Mentor and
others) as well. Remember that even a large business firm, once aware
that its Mentoring costs are not directly reimbursable under a smaller
contract, is not likely to seek to enter the Program in relation to such
small awards anyway.

\(2\) In addition, the incentives previously described in the new GSAR
Subpart primarily focus on evaluation credit under the Tradeoff process,
and are in any event limited by the Small Business Act to negotiated
contracts (excluding sealed bidding). Thus, the clauses should be
included only in solicitations that use the Tradeoff process, or should
at least be limited to negotiations (excluding sealed bidding). Again,
it is not that Proteges won't ultimately benefit from future subcontract
awards under sealed bid contracts, but that the encouragement and
invitation to initially APPLY as a Mentor, submit semi-annual reports,
and invest heavily in Proteges, should be made to large businesses that
will already be submitting Subcontracting Plans and who could receive
evaluation credit under a specific Tradeoff process. What purpose do the
clauses serve by being included in solicitations where no Subcontracting
Plan would ever be required, and no evaluation credit during source
selection could occur?

If the purpose of including the clauses so extensively in contracts is
to advertise the Program, then the clauses do not do that well at all.
Very little information is included in them (contractors are told to
read the GSAR instead, or to call Central Office for information); in
addition, contractors rarely read clauses unless specifically necessary
in the moment; and these clauses would be incorporated by reference
anyway. There would need to be much more direct outreach to the
contractor community rather than relying on clauses to get contractors
to read GSAR Part 519.

\(3\) Regarding the text of the clause entitled "Mentor Requirements and
Evaluation", the final paragraph refers to the FAR Clause at 52.244-5. I
suggest that the title of the clause be included as well (Competition in
Subcontracting), and that wording takes into consideration that this
clause does not apply to all contracts, i.e., "Subcontracts awarded to
GSA Protege firms under this Program are exempt from competition
requirements, regardless of the inclusion of FAR clause 52.244-5
(Competition in Subcontracting) in any individual contract. However,
subcontracts awarded noncompetitively to Protege firms must still be
awarded at fair and reasonable prices."

**Overall Comment**: As more and more agencies implement a
Mentor-Protege Program, the FAR Council should consider having one
uniform approach outlined in FAR Part 19 (just as there is for
Subcontracting Plans) rather than having disparate requirements that may
differ among several agencies.