A bill to enhance small business access to Federal contracting opportunities and provide technical advice and support that small businesses need to perform contracts awarded to them, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Governmentwide Mentor-Protege 
Program Act of 2001''.

SEC. 2. MENTOR-PROTEGE PROGRAM.

    The Small Business Act (15 U.S.C. 631 et seq.) is amended--
            (1) by redesignating section 36 as section 37; and
            (2) by inserting after section 35 the following:

``SEC. 36. MENTOR-PROTEGE PROGRAM.

    ``(a) Establishment of Program.--The Administrator shall establish 
a Program to be known as the `Governmentwide Mentor-Protege Program'.
    ``(b) Purposes.--The purposes of the Program are to provide--
            ``(1) incentives for major Federal contractors to assist 
        eligible small business concerns to enhance the capabilities of 
        eligible small business concerns to perform as subcontractors 
        and suppliers under Federal contracts in order to increase the 
        participation of eligible small business concerns as 
        subcontractors and suppliers under those contracts; and
            ``(2) Governmentwide criteria for partial reimbursement of 
        certain agency costs incurred in the administration of the 
        Program.
    ``(c) Program Participants.--
            ``(1) Mentor firms.--A mentor firm may enter into 
        agreements under subsection (e) and furnish assistance to 
        eligible small business concerns upon making application to the 
        head of the agency for which it is contracting and being 
        approved for participation in the Program by the head of the 
        agency.
            ``(2) Eligible small business concerns.--
                    ``(A) In general.--An eligible small business 
                concern may obtain assistance from a mentor firm upon 
                entering into an agreement with the mentor firm to 
                become a protege firm, as provided in subsection (e).
                    ``(B) Restriction.--A protege firm may not be a 
                party to more than one agreement to receive assistance 
                described in subparagraph (A) at any time.
            ``(3) Certification.--
                    ``(A) In general.--Before receiving assistance from 
                a mentor firm under this section, a small business 
                concern shall furnish to the mentor firm--
                            ``(i) if the Administration regularly 
                        issues certifications of qualification for the 
                        category of that small business concern listed 
                        in subsection (k)(1), that certification; and
                            ``(ii) if the Administration does not 
                        regularly issue certifications of qualification 
                        for the category of that small business concern 
                        listed in subsection (k)(1), a statement 
                        indicating that it is an eligible small 
                        business concern.
                    ``(B) Development of certification.--Nothing in 
                this section shall be construed to require the 
                Administration to develop a certification program for 
                any category of small business concern listed in 
                subsection (k)(1).
                    ``(C) Assistance to non-eligible small business 
                concern.--If at any time, a small business concern is 
                determined by the Administration not to be an eligible 
                small business concern in accordance with this 
                section--
                            ``(i) the small business concern shall 
                        immediately notify the mentor firm of the 
                        determination; and
                            ``(ii) assistance furnished to that small 
                        business concern by the mentor firm after the 
                        date of the determination may not be considered 
                        to be assistance furnished under the Program.
    ``(d) Mentor Firm Eligibility.--
            ``(1) In general.--Subject to subsection (c)(1), a mentor 
        firm that is eligible for award of Federal contracts may enter 
        into an agreement with one or more protege firms under 
        subsection (e) and provide assistance under the Program 
        pursuant to that agreement, if the mentor firm demonstrates to 
        the subject agency the capability to assist in the development 
        of protege firms.
            ``(2) Presumption of capability.--A mentor firm shall be 
        presumed to be capable under paragraph (1) if the total amount 
        of contracts and subcontracts that the mentor firm has entered 
        into with the subject agency exceeds an amount determined by 
        the Administrator, in consultation with the head of the subject 
        agency, to be significant relative to the contracting volume of 
        the subject agency.
    ``(e) Mentor-Protege Agreement.--
            ``(1) In general.--Before providing assistance to a protege 
        firm under the Program, a mentor firm shall enter into a 
        mentor-protege agreement with the protege firm regarding the 
        assistance to be provided by the mentor firm.
            ``(2) Contents of agreement.--The agreement required by 
        paragraph (1) shall include--
                    ``(A) a developmental program for the protege firm, 
                in such detail as may be reasonable, including--
                            ``(i) factors to assess the developmental 
                        progress of the protege firm under the Program; 
                        and
                            ``(ii) the anticipated number and type of 
                        subcontracts to be awarded to the protege firm;
                    ``(B) a Program participation term of not longer 
                than 3 years, except that the term may be for a period 
                of not longer than 5 years if the Administrator 
                determines, in writing, that unusual circumstances 
                justify a Program participation term of longer than 3 
                years; and
                    ``(C) procedures for the protege firm to terminate 
                the agreement voluntarily and for the mentor firm to 
                terminate the agreement for cause.
    ``(f) Forms of Assistance.--A mentor firm may provide to a protege 
firm--
            ``(1) assistance using mentor firm personnel, in--
                    ``(A) general business management, including 
                organizational management, financial management, and 
                personnel management, marketing, business development, 
                and overall business planning;
                    ``(B) engineering and technical matters, including 
                production, inventory control, and quality assurance; 
                and
                    ``(C) any other assistance designed to develop the 
                capabilities of the protege firm under the 
                developmental program referred to in subsection 
                (e)(2)(A);
            ``(2) the award of subcontracts on a noncompetitive basis 
        under Federal contracts;
            ``(3) progress payments for performance of the protege firm 
        under a subcontract referred to in paragraph (2), in amounts as 
        provided for in the subcontract, except that no such progress 
        payment may exceed 100 percent of the costs incurred by the 
        protege firm for the performance;
            ``(4) advance payments under subcontracts referred to in 
        paragraph (2);
            ``(5) loans;
            ``(6) cash in exchange for an ownership interest in the 
        protege firm, not to exceed 10 percent of the total ownership 
        interest;
            ``(7) assistance obtained by the mentor firm for the 
        protege firm from--
                    ``(A) small business development centers 
                established pursuant to section 21;
                    ``(B) entities providing procurement technical 
                assistance pursuant to chapter 142 of title 10, United 
                States Code; or
                    ``(C) a historically Black college or university or 
                a minority institution of higher education.
    ``(g) Incentives for Mentor Firms.--
            ``(1) Reimbursement for progress or advance payment.--The 
        head of the agency for which a mentor firm is contracting may 
        provide to a mentor firm reimbursement for the total amount of 
        any progress payment or advance payment made under the Program 
        by the mentor firm to a protege firm in connection with a 
        Federal contract awarded to the mentor firm.
            ``(2) Reimbursement for mentoring assistance.--
                    ``(A) Mentor firm.--The head of the agency for 
                which a mentor firm is contracting may provide to a 
                mentor firm reimbursement for the costs of the 
                assistance furnished to a protege firm pursuant to 
                paragraphs (1) and (7) of subsection (f), as provided 
                for in a line item in a Federal contract under which 
                the mentor firm is furnishing products or services to 
                the agency, subject to a maximum amount of 
                reimbursement specified in the contract, except that 
                this subparagraph does not apply in a case in which the 
                head of the agency determines in writing that unusual 
                circumstances justify reimbursement using a separate 
                contract.
                    ``(B) Total amount of reimbursement.--The total 
                amount reimbursed under subparagraph (A) to a mentor 
                firm for costs of assistance furnished in a fiscal year 
                to a protege firm may not exceed $1,000,000, except in 
                a case in which the head of the subject agency 
                determines in writing that unusual circumstances 
                justify reimbursement of a higher amount.
                    ``(C) Reimbursement to agency.--The head of an 
                agency may submit documentation to the Administrator 
                indicating the total amount of reimbursement that the 
                agency paid to each mentor firm under this paragraph, 
                and the agency shall be reimbursed by the 
                Administration for not more than 50 percent of that 
                total amount, as indicated in the documentation.
            ``(3) Costs not reimbursed.--
                    ``(A) In general.--
                            ``(i) Credit.--Costs incurred by a mentor 
                        firm in providing assistance to a protege firm 
                        that are not reimbursed pursuant to paragraph 
                        (2) shall be recognized as credit in lieu of 
                        subcontract awards for purposes of determining 
                        whether the mentor firm attains a 
                        subcontracting participation goal applicable to 
                        the mentor firm under a Federal contract or 
                        under a divisional or companywide 
                        subcontracting plan negotiated with an agency.
                            ``(ii) Subject agency authority.--Clause 
                        (i) shall not be construed to authorize the 
                        negotiation of divisional or companywide 
                        subcontracting plans by an agency that did not 
                        have such authority before the date of 
                        enactment of the Governmentwide Mentor-Protege 
                        Program Act of 2001.
                    ``(B) Amount of credit.--The amount of the credit 
                given to a mentor firm for unreimbursed costs described 
                in subparagraph (A) shall be equal to--
                            ``(i) 4 times the total amount of the 
                        unreimbursed costs attributable to assistance 
                        provided by entities described in subsection 
                        (f)(7);
                            ``(ii) 3 times the total amount of the 
                        unreimbursed costs attributable to assistance 
                        furnished by the employees of the mentor firm; 
                        and
                            ``(iii) 2 times the total amount of any 
                        other unreimbursed costs.
                    ``(C) Adjustment of credit.--Under regulations 
                issued by the Administrator pursuant to subsection (j), 
                the head of the subject agency shall adjust the amount 
                of credit given to a mentor firm pursuant to 
                subparagraphs (A) and (B) of this paragraph, if the 
                head of the subject agency determines that the 
                performance of the mentor firm regarding the award of 
                subcontracts to eligible small business concerns has 
                declined without justifiable cause.
    ``(h) Administrative Provisions.--
            ``(1) Developmental assistance.--For purposes of this Act, 
        no determination of affiliation or control (either direct or 
        indirect) may be found between a protege firm and its mentor 
        firm on the basis that the mentor firm has agreed to furnish 
        (or has furnished) to the protege firm pursuant to a mentor-
        protege agreement under this section any form of developmental 
        assistance described in subsection (f).
            ``(2) Participation in program.--Notwithstanding section 8, 
        the Administration may not determine an eligible small business 
        concern to be ineligible to receive any assistance authorized 
        under this Act on the basis that the small business concern has 
        participated in the Program, or has received assistance 
        pursuant to any developmental assistance agreement authorized 
        under the Program.
            ``(3) Administration review.--
                    ``(A) In general.--Upon determining that the 
                mentor-protege program administered by the subject 
                agency conforms to the standards set forth in the rules 
                issued under subsection (j)(1), the Administrator may 
                not require a small business concern that is entering 
                into, or has entered into, an agreement under 
                subsection (e) as a protege firm, or a firm that makes 
                an application under subsection (c)(1), to submit the 
                application, agreement, or any other document required 
                by the agency in the administration of the Program to 
                the Administration for review, approval, or any other 
                purpose.
                    ``(B) Exception.--The Administrator may require 
                submission for review of an agreement entered into 
                under subsection (e), or application submitted under 
                subsection (c)(1), if the agreement or application 
                relates to--
                            ``(i) a mentor-protege program administered 
                        by the agency that does not conform to the 
                        standards set forth in the rules issued under 
                        subsection (j)(1); or
                            ``(ii) a claim for reimbursement of costs 
                        submitted by an agency to the Administration 
                        under subsection (g)(2)(C) that the 
                        Administrator has reason to believe is not 
                        authorized under this section.
    ``(i) Participation in Program Not To Be a Condition for Award of a 
Contract or Subcontract.--A mentor firm may not require a small 
business concern to enter into an agreement with the mentor firm 
pursuant to subsection (e) as a condition for being awarded a contract 
by the mentor firm, including a subcontract under a contract awarded to 
the mentor firm.
    ``(j) Regulations.--
            ``(1) Proposed rules.--Not later than 270 days after the 
        date of enactment of the Governmentwide Mentor-Protege Program 
        Act of 2001, the Administrator shall issue final rules to carry 
        out this section.
            ``(2) Proposed rules from the federal acquisition 
        regulatory council.--Not later than 180 days after the date of 
        issuance of the final rules of the Administration under 
        paragraph (1), the Federal Acquisition Regulatory Council shall 
        publish final rules that conform to the final rules issued by 
        the Administration.
    ``(k) Definitions.--In this section--
            ``(1) the term `eligible small business concern' means--
                    ``(A) any qualified HUBZone small business concern, 
                as defined in section 3(p)(5);
                    ``(B) any small business concern that is owned and 
                controlled by women, as defined in section 3(n);
                    ``(C) any small business concern that is owned and 
                controlled by socially and economically disadvantaged 
                individuals, as defined in section 8(a)(4); and
                    ``(D) any small business concern that is owned and 
                controlled by service-disabled veterans, as defined in 
                section 3(q)(2);
            ``(2) the term `historically Black college and university' 
        means any of the historically Black colleges and universities 
        referred to in section 2323 of title 10, United States Code;
            ``(3) the term `mentor firm' means a business concern 
        that--
                    ``(A) meets the requirements of subsection (d); and
                    ``(B) is approved for participation in the Program 
                under subsection (c)(1);
            ``(4) the term `minority institution of higher education' 
        means an institution of higher education with a student body 
        that reflects the composition specified in paragraphs (3), (4), 
        and (5) of section 312(b) of the Higher Education Act of 1965 
        (20 U.S.C. 1058(b)(3), (4), (5));
            ``(5) the term `Program' means the Mentor-Protege Program 
        established under this section;
            ``(6) the term `protege firm' means an eligible small 
        business concern that receives assistance from a mentor firm 
        under this section; and
            ``(7) the term `subcontracting participation goal', with 
        respect to a Federal Government contract, means a goal for the 
        extent of the participation by eligible small business concerns 
        in the subcontracts awarded under such contract, as established 
        by the Administrator and the subject agency head, in accordance 
        with the goals established pursuant to section 15(g).
    ``(l) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $30,000,000 for each of fiscal 
years 2002 through 2004.''.

Summary: Governmentwide Mentor-Protege Program Act of 2001 - Amends the Small Business Act to direct the Administrator of the Small Business Administration to establish the Governmentwide Mentor-Protege Program under which major Federal contractors assist eligible small businesses to perform as subcontractors and suppliers under Federal contracts. Requires a mentor-protege agreement regarding the assistance to be provided. Provides incentives for mentor firms to enter into such agreements, including reimbursement for progress or advance payments made to protege firms in connection with a Federal contract, as well as reimbursement for mentoring assistance . Prohibits a mentor firm from requiring an eligible small business to enter into an agreement as a condition for the award of a contract or subcontract. Makes eligible for such Program: (1) any qualified HUBZone small business. And (2) any small business owned and controlled by women, socially and economically disadvantaged individuals, or service-disabled veterans.