29–006 

112TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 112–723 

BUILDING BETTER BUSINESS PARTNERSHIPS ACT 

OF 2012 

DECEMBER 20, 2012.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. GRAVES of Missouri, from the Committee on Small Business, 

submitted the following 

R E P O R T 

[To accompany H.R. 3985] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Small Business, to whom was referred the bill 

(H.R. 3985) to amend the Small Business Act with respect to mentor-prote ́ge ́ programs, and for other purposes, having considered 

the same, report favorably thereon with amendments and recommend that the bill as amended do pass. 

C O N T E N T S 

Page 

I. Amendment ................................................................................................. 1 

II. Purpose of the Bill and Summary ............................................................. 2 

III. Background and the Need for Legislation ................................................ 3 

IV. Hearings ....................................................................................................... 6 

V. Committee Consideration ........................................................................... 7 

VI. Committee Votes ......................................................................................... 7 

VII. Section-by-Section Analysis of H.R. 3985 .................................................. 8 

VIII. Congressional Budget Cost Estimate ........................................................ 10 

IX. Unfunded Mandates .................................................................................... 12 

X. New Budget Authority, Entitlement Authority, and Tax Expenditures 12 

XI. Oversight Findings ...................................................................................... 12 

XII. Statement of Constitutional Authority ...................................................... 12 

XIII. Congressional Accountability Act .............................................................. 12 

XIV. Federal Advisory Committee Statement ................................................... 13 

XV. Statement of No Earmarks ........................................................................ 13 

XVI. Performance Goals and Objectives ............................................................ 13 

XVII. Changes in Existing Law Made by the Bill, as Reported ........................ 13 

I. AMENDMENT

The amendments (stated in terms of the page and line numbers 

of the introduced bill) are as follows: 


pwalker on DSK7TPTVN1PROD with 
2 

1Originally, title II of the Act of July 30, 1953, c. 282, 67 Stat. 232 was designated as the 

Small Business Act of 1953. A plethora of amendments in subsequent Congresses led to a rewrite in 1958. Pub. L. No. 85–536, § 1, 72m Stat. 384 (1958). The Act is codified at 15 U.S.C. 

§§ 631–657q. 

Page 4, line 23, strike the period at the end and insert the following: ‘‘, and to protect proteges against actions by the mentor 

that—’’ 

(i) may adversely affect the proteges status as a 

small business; or 

(ii) provide disproportionate economic benefits to the 

mentor relative to those provided the protege. 

Page 7, line 24, insert after ‘‘the Administrator.’’ the following: 

‘‘(e) CURRENT MENTOR PROTEGE AGREEMENTS.—Mentors and proteges with approved agreement in a program operating pursuant to 

subsection (b)(4)(C) shall be permitted to continue their relationship according to the terms specified in their agreement until the 

expiration date specified in the agreement. 

‘‘(f) SUBMISSION OF AGENCY PLANS.—Agencies operating mentor 

protege programs pursuant to subsection (b)(4)(C) must submit the 

plans specified in subsection (b)(1)(A) to the Administrator within 

6 months of the promulgation of rules required by subsection (b)(3). 

The Administrator shall provide initial comments on each plan 

within 60 days of receipt, and final approval or denial of each plan 

with 180 days of receipt.’’. 

Page 7, insert after line 24 the following: 

SEC. 3. GOVERNMENT ACCOUNTABILITY OFFICE REPORT. 

Not later than the date that is 2 years after the agencies operating subject to section 45(b)(4)(C) of the Small Business Act have 

their plans approved or denied by the Administrator, the Comptroller General of the United States shall conduct a study to— 

(1) update the study required by section 1345 of the Small 

Business Jobs Act of 2010 (Pub. Law 111-240); 

(2) examine whether potential affiliation issues between 

mentors and proteges under the prior programs have been resolved by enactment of this Act; and 

(3) examine whether the regulations issued pursuant to section 45(b)(3)(I) of the Small Business Act have increased opportunities for mentor-protege pairs, and if they have decreased 

the paperwork required for such pairs participating in programs at multiple agencies. 

II. PURPOSE AND BILL SUMMARY

The purpose of H.R. 3985, the ‘‘Building Better Business Partnerships Act of 2012,’’ is to amend the Small Business Act (the Act) 1

to allow the Small Business Administration (SBA) to oversee civilian agency mentor-prote ́ge ́ programs. This will promote portability 

of agreements between agencies, guarantee that the programs benefit small businesses, and ensure that the mentor-prote ́ge ́ agreement does not inadvertently harm the prote ́ge ́’s small business status. 

H.R. 3985 seeks to improve mentor-prote ́ge ́ programs to ensure 

that they assist small businesses. First, it authorizes the Administrator of the SBA to create a mentor-prote ́ge ́ program for small 


pwalker on DSK7TPTVN1PROD with 
3 

2Small Business Jobs Act of 2010, Pub. L. No. 111–240, § 1245, 124 Stat. §§ 2504, 2546 (2010). 

3Department of Defense (DoD); Department of Energy (DOE); Department of State (DOS); 

Environmental Protection Agency (EPA); Federal Aviation Administration (FAA); General Services Administration (GSA); Department of Homeland Security (DHS); National Aeronautics and 

Space Administration (NASA); Small Business Administration (SBA); Department of Treasury 

(Treasury); United States Agency for International Development (USAID); and Department of 

Veterans Affairs (VA). 4Some agencies refer to the statutorily defined OSDBU position by different titles. For example, GSA refers to their office as the Office of Small Business Utilization. However, for 

simplicity’s sake, all such offices and position shall be referred to as OSDBUs in this report. 5GAO, Mentor-Prote ́ge ́ Programs Have Policies That Aim To Benefit Participants But Do Not 

Require Postagreement Tracking 1(2011) (GAO–11–548R) (hereinafter ‘‘Mentor Prote ́ge ́ Programs’’). 

businesses and directs the Administrator to use the existing SBA 

8(a) mentor-prote ́ge ́ program established pursuant to 8(a) of the 

Act as a model. Second, it requires agencies and departments to 

seek prior approval for their mentor-prote ́ge ́ programs from the 

SBA Administrator and requires the proposed program plan to be 

approved or disapproved depending on: whether the proposed program will assist small business concerns to compete for Federal 

prime contracts and subcontracts; and complies with SBA program 

regulations. Third, it requires that the Administrator present an 

annual report to the House Committee on Small Business and the 

Senate Committee on Small Business and Entrepreneurship assessing the benefits of each mentor-prote ́ge ́ program and describing 

the number of program participants, prote ́ge ́ assistance received, 

and the progress prote ́ge ́ firms have made to improve their competitive viability. Fourth, it provides definitions of mentor, prote ́ge ́, 

and mentor-prote ́ge ́ program. Finally, it requires the Government 

Accountability Office (GAO) to conduct a study of mentor-prote ́ge ́

programs within two years after agencies have had their plans approved or denied. 

III. NEED FOR LEGISLATION

Mentor-prote ́ge ́ relationships are defined by the Small Business 

Jobs Act of 2010 (Jobs Act) as ‘‘relationships and strategic alliances 

pairing a larger business and a small business concern partner to 

gain access to Federal Government contracts.’’ 2 Mentor-prote ́ge ́

programs are arrangements by which experienced prime contractors, including small businesses, serve as mentors to eligible small 

businesses, or prote ́ge ́s. Mentors provide prote ́ge ́s with technical, 

managerial, and other business development assistance. 

Currently, 13 federal departments or agencies 3 sponsor mentorprote ́ge ́ programs. Agencies, through the Offices of Small and Disadvantaged Small Business Utilization (OSDBUs),4 encourage 

mentor participation by providing the mentor with credit toward 

subcontracting goals, additional evaluation points toward the 

awarding of contracts, an annual award to the mentor providing 

the most effective developmental support to a prote ́ge ́, and in three 

cases, cost reimbursement.5 The SBA 8(a) Mentor-prote ́ge ́ Program 

is the largest program, having twice as many participants as the 

next largest program. 

Mentor-prote ́ge ́ programs are intended to partner small businesses with established mentors in order improve the small business’ ability to win and perform on contracts and subcontracts, but 

the 13 federal agency programs are duplicative (creating an unnecessary paperwork burden for participants) and lack standardized 


pwalker on DSK7TPTVN1PROD with 
4 

6 Jobs Act § 1245, 124 Stat. at 2546. 

7 Id. 

8Mentor Prote ́ge ́ Programs, supra note 5, at 2. 9 13 C.F.R. § 121.103(a). 

measures of success. In addition, while the SBA Administrator is 

authorized to create mentor-prote ́ge ́ programs for certain subsets of 

small businesses, the Small Business Act does not currently allow 

the Administrator to create a mentor-prote ́ge ́ program for all small 

businesses. 

In the Jobs Act, Congress required the GAO to study both the 

SBA’s 8(a) Mentor-prote ́ge ́ program and the other mentor-prote ́ge ́

programs ‘‘to determine whether the programs and relationships 

are effectively supporting the goal of increasing the participation of 

small business concerns in Government contracting.’’ 6 Specifically, 

the report was to address a broad cross section of industries and 

evaluate how the procurement agencies were administering the 

programs, what types of controls were in place, and how agencies 

were ensuring that the prote ́ge ́s were deriving benefit from the programs which prepared them to better compete for federal contracts.7

As part of its study of the mentor-prote ́ge ́ programs, the GAO reviewed the policies and procedures for the 13 programs, and then 

focused on the controls used ‘‘to help ensure that mentor-prote ́ge ́

programs are beneficial to program participants and eligibility requirements are being met,’’ 8 particularly whether the programs 

met the goal of helping firms ultimately compete for federal contracts. The GAO report revealed that there were a number of 

issues that needed to be addressed with mentor-prote ́ge ́ programs, 

especially as the duplication among the 13 programs creates unnecessary paperwork for small businesses. GAO also noted that some 

mentor-prote ́ge ́ programs lack accountability or metrics for tracking success. Based on the GAO study, the Committee further examined the programs, and found that program participants risk losing 

their small business size status due to the principal of affiliation 

when working with other businesses, and that the programs are 

not available to assist the majority of small businesses seeking federal contracts. 

With the exception of the SBA, DoD, DOE and FAA mentorprote ́ge ́ programs, the programs reviewed by the GAO provide the 

same benefits to mentors, provide very similar assistance to small 

businesses, and have similar reporting requirements. Despite the 

similarities and the SBA’s overarching role in determining the size 

of firms in federal procurement, a firm that wants to participate in 

more than one program must be vetted by each agency. One of the 

strengths of the SBA program is that it allows a mentor and 

prote ́ge ́ to contract at any federal agency. However, the SBA program is limited to participants in the 8(a) and HUBZone programs. 

Given the diversity of programs and the limitations of the SBA programs, there should be a civilian agency mentor-prote ́ge ́ program. 

This will allow greater participation, impose fewer paperwork burdens on businesses, and facilitate greater access to contracts. 

Affiliation is the name given to the principles the SBA uses to 

determine whether two entities will be considered under common 

management or control, and thus considered one company, for the 

purposes of determining whether a firm is small.9 Pursuant to SBA 


pwalker on DSK7TPTVN1PROD with 
5 

10 Id. 11 Id. at § 121.103(a)(2). 12 Id. at § 121.103(a)(5). 13 Id. at § 121.103(f). 14 Id. at § 121.103(g). 15 Id. at § 121.103(h). 16 Id. at § 121.103(h)(4). 17 Id. at § 121.103(i). 18SBA, DoD, DHS, DOS, Treasury, VA, NASA, FAA and HHS. 19See, e.g., Associated Refuse & Compactions Services, Inc., B–189,740 at 1–2 (Comp. Gen. 

1977). 20 13 CFR § 121.103(b)(6). 21 10 U.S.C. § 2302 note. 

regulations, two firms may be considered affiliated if SBA finds 

that one firm is controlled by the other.10 To determine affiliation, 

SBA’s Office of Hearing and Appeals considers factors such as 

‘‘ownership, management, previous relationships with or ties to another concern, and contractual relationships, in determining whether affiliation exists.’’ 11 Indeed, SBA looks at the totality of factors 

when considering affiliation, and ‘‘may find affiliation even though 

no single factor is sufficient to constitute affiliation.’’ 12 Affiliation 

can be found based on ‘‘identity of interest’’ which includes firms 

that are ‘‘economically dependent through contractual or other relationships.’’ 13 Affiliation can be found based on shared space and 

employees,14 joint ventures,15 undue use by the prote ́ge ́ of the mentor as a subcontractor,16 and license agreements.17

The development assistance that is encouraged by nearly all 

mentor-prote ́ge ́ programs, aside from the SBA program, and is provided under typical mentor-prote ́ge ́ agreements risks triggering a 

finding of affiliation and thus a potential determination the prote ́ge ́

may be found to be other-than-small. Despite the fact that participation in a program is not cause to find affiliation, the Committee 

is concerned that by encouraging well-intentioned mentors and 

prote ́ge ́s to engage in activities, the programs put small businesses’ 

size status at risk. Additionally, the Committee also is concerned 

that nine of the thirteen mentor-prote ́ge ́ programs claim to waive 

affiliation.18 Pursuant to the Small Business Act, only the SBA has 

the ability to waive affiliation,19 and SBA has simply stated that 

a prote ́ge ́ firm is not an affiliate of a mentor firm ‘‘solely because 

the prote ́ge ́ [sic] firm receives assistance from the mentor firm 

under Federal Mentor-Protege programs’’ but that ‘‘[a]ffiliation may 

be found for other reasons.’’ 20 The DoD program has a statutory 

exemption from affiliation,21 but seven of the remaining programs 

claim this exemption without a basis in law or a waiver from SBA. 

A purported waiver is particularly dangerous, as it may lead 

small firms to believe that they have safe harbor from affiliation 

rules when they provide or accept assistance pursuant to a mentorprote ́ge ́ agreement. However, even the programs that do not claim 

to waive affiliation inadvertently put small businesses in danger, 

since the underlying technical assistance itself may trigger a loss 

of small business status. Since SBA is the only entity with authority to waive affiliation for mentor-prote ́ge ́ participants, it is logical 

that SBA should have regulatory authority over all civilian mentorprote ́ge ́ programs. 

While nine of the agencies agreed to implement GAO’s recommendation on post-program success, to date only one has made 

changes. If mentor-prote ́ge ́ programs are intended to develop the 

capacity of small firms to compete for contracts, measuring postVerDate Mar 15 2010 05:16 Dec 30, 2012 Jkt 029006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR723.XXX HR723

pwalker on DSK7TPTVN1PROD with 
6 

22Mentor Prote ́ge ́ Programs, supra note 5, at 2; GAO, Improvements Needed To Help Ensure 

Reliability of SBA’s Performance Data on Procurement Center Representatives (2011) (GAO–22– 

549R); and GAO, Small Business Contracting: Action Needed by Those Agencies Whose Advocates Do Not Report to Agency Heads as Required (2011) (GAO–11–418). 

program performance is crucial. A uniform program administered 

by SBA with each agency reporting on its progress will give a more 

complete picture of a firm’s successes and challenges. 

Of the thirteen programs reviewed, only eight accept small businesses that do not qualify for one of the other socio-economic contracting or business development programs. Some of the restrictions are logical. For example, the SBA only admits 8(a) and Historically Underutilized Business Zone (HUBZone) firms into its 

mentor-prote ́ge ́ program because the program is intended to be a 

business development tool, and the VA only admits veteran or service-disabled veteran firms in keeping with the agency’s mission. In 

other cases, the restriction is statutory; DoD is statutorily barred 

from allowing small businesses or veteran-owned small businesses 

from participating as prote ́ge ́s. Other restrictions are harder to 

fathom; the EPA excludes prote ́ge ́s that are small businesses, 

HUBZone businesses, and veteran or service-disabled veteranowned firms. 

The Building Better Business Partnerships Act addresses the 

problems of duplication, affiliation, accountability and accessibility 

discussed above. It allows the SBA to oversee civilian agency mentor-prote ́ge ́ programs in order to promote portability of agreements 

between the agencies, guarantee that the programs benefit the 

small businesses, and ensure that the mentor-prote ́ge ́ agreement 

does not inadvertently harm the prote ́ge ́’s small business size status. Ultimately, H.R. 3985 will improve mentor-prote ́ge ́ programs, 

making it easier for small firms to compete for and win government 

contracts, enabling them to grow and create jobs. 

IV. HEARINGS

In the 112th Congress, the Committee held one hearing that 

looked at mentor-prote ́ge ́ programs. On September 15, 2011, the 

Subcommittee on Contracting and Workforce held a hearing titled, 

‘‘Helping Small Businesses Compete: Challenges within Programs 

Designed to Assist Small Contractors.’’ This hearing addressed 

issues related to the inadequacy of current mentor-prote ́ge ́ programs. Specifically, three GAO reports on programs that exist to 

help small businesses compete for federal contracts were reviewed,22 and three problems with agency mentor-prote ́ge ́ programs were examined: affiliation, duplication and accountability. 

The hearing found that the eleven non-statutory mentor-prote ́ge ́

programs provided assistance that could lead to a finding of affiliation which could cause small businesses participating as mentors 

or prote ́ge ́s to lose their small business size status. Furthermore, 

it found that the civilian-agency mentor-prote ́ge ́ programs are duplicative and a firm must be vetted by each agency if it wants to 

participate in more than one program. Finally, the hearing found 

that although nine agencies have agreed to implement GAO’s recommendation to measure post-program success, none had made 

changes as of the hearing date. 


pwalker on DSK7TPTVN1PROD with 
7 

V. COMMITTEE CONSIDERATION

The Committee on Small Business met in open session on March 

22, 2012 and ordered H.R. 3985 reported, as amended, to the 

House by a voice vote at 10:16 a.m. During the markup, one 

amendment was offered and adopted. Disposition of the amendment is addressed below. 

Amendment Number One filed by Ms. Chu (D–CA) ensures that 

current mentor-prote ́ge ́ agreements will continue according to the 

terms and until the expiration of the date specified in the agreement, requires agencies operating mentor-prote ́ge ́ programs to submit their program plans to the Administrator of the SBA within 6 

months of the regulations required under H.R. 3985, and requires 

the GAO to update its study on mentor-prote ́ge ́ programs after 

agency plans are approved or denied. Amendment Number One 

was adopted by voice vote at 10:15 a.m. 

VI. COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the recorded votes on the motion to report the legislation and amendments thereto. No recorded 

votes were taken in consideration of H.R. 3985. 

AMENDMENT TO H.R. 3985 OFFERED BY MS. CHU OF CALIFORNIA

Page 4, line 23, strike the period at the end and insert the following: ‘‘, and to protect proteges against actions by the mentor 

that—’’ 

(i) may adversely affect the proteges status as a 

small business; or 

(ii) provide disproportionate economic benefits to the 

mentor relative to those provided the protege. 

Page 7, line 24, insert after ‘‘the Administrator.’’ the following: 

‘‘(e) CURRENT MENTOR PROTEGE AGREEMENTS.—Mentors and proteges with approved agreement in a program operating pursuant to 

subsection (b)(4)(C) shall be permitted to continue their relationship according to the terms specified in their agreement until the 

expiration date specified in the agreement. 

‘‘(f) SUBMISSION OF AGENCY PLANS.—Agencies operating mentor 

protege programs pursuant to subsection (b)(4)(C) must submit the 

plans specified in subsection (b)(1)(A) to the Administrator within 

6 months of the promulgation of rules required by subsection (b)(3). 

The Administrator shall provide initial comments on each plan 

within 60 days of receipt, and final approval or denial of each plan 

with 180 days of receipt.’’. 

Page 7, insert after line 24 the following: 

SEC. 3. GOVERNMENT ACCOUNTABILITY OFFICE REPORT. 

Not later than the date that is 2 years after the agencies operating subject to section 45(b)(4)(C) of the Small Business Act have 

their plans approved or denied by the Administrator, the Comptroller General of the United States shall conduct a study to— 

(1) update the study required by section 1345 of the Small 

Business Jobs Act of 2010 (Pub. Law 111-240); 


pwalker on DSK7TPTVN1PROD with 
8 

23Pub. Law No. 104–201, 110 Stat. 2422 (1996). 24Small Business Jobs Act a, § 1245. 

(2) examine whether potential affiliation issues between 

mentors and proteges under the prior programs have been resolved by enactment of this Act; and 

(3) examine whether the regulations issued pursuant to section 45(b)(3)(I) of the Small Business Act have increased opportunities for mentor-protege pairs, and if they have decreased 

the paperwork required for such pairs participating in programs at multiple agencies. 

VII. SECTION-BY-SECTION ANALYSIS OF H.R. 3985 AS AMENDED

Section 1. Short title 

This section provides that the bill may be cited as the ‘‘Building 

Better Business Partnerships Act of 2012.’’ 

Section 2. Mentor-Prote ́ge ́ programs 

Subsection (a)—Administrative Program 

Currently, the Act addresses contracting-related mentor-prote ́ge ́

relationships in two ways. First, in Section 8(d)(11), it acknowledges that mentors may receive subcontracting credit for providing 

developmental assistance to prote ́ge ́ through the pilot MentorProte ́ge ́ [sic] Program established by section 831 of the National 

Defense Authorization Act for Fiscal Year 1991.23 Additionally, in 

a note to 15 U.S.C. § 637(a),24 the Administrator is authorized to 

create mentor-prote ́ge ́ programs for service-disabled veteran-owned 

small business concerns (SDVOSBs), women-owned small business 

concerns (WOSBs) and qualified HUBZone firms, with each program to be modeled on the mentor-prote ́ge ́ program that the Administrator created for the 8(a) program through regulation. This 

subsection amends Section 45 of the Small Business Act and provides the Administrator with authority to establish a mentorprote ́ge ́ program for all small business concerns and directs the Administrator to use the existing 8(a) mentor-prote ́ge ́ program as a 

model. 

Subsection (b)—Programs of Other Agencies. 

This subsection amends Section 45 of the Small Business Act. 

Under subsection (b)(1), agencies will be required to seek prior approval for their mentor-prote ́ge ́ programs. Subsection (b)(2) states 

that the Administrator’s approval shall be based on: whether the 

proposed program will assist small business concerns to compete 

for Federal prime contracts and subcontracts; and whether the program complies with SBA regulations. 

Subsection b(3) requires the Administrator to promulgate regulations on mentor-prote ́ge ́ programs. The regulations must address 

the criteria for eligibility; the type of assistance mentors may provide; the effect of the findings of affiliation; the length of the mentor-prote ́ge ́ relationship; the effect of the relationship on contracts 

awarded; the benefits, if any, to the mentor; the reporting requirements during and after participation in the program; the portability of the mentor-prote ́ge ́ relationship to other agencies; and the 

actions the agencies will take to ensure prote ́ge ́ receive benefits 


pwalker on DSK7TPTVN1PROD with 
9 

25 10 U.S.C. § 2301 note 26Section 9(n) of the Small Business Act. 

and protect prote ́ge ́ against actions by a mentor that may adversely 

affect the prote ́ge ́’s status as a small business or provide disproportionate economic benefits to the mentor relative to the prote ́ge ́. 

This level of specificity is necessary to ensure that all participants 

have reasonable expectations of the program. Unlike the SBA’s 8(a) 

mentor-prote ́ge ́ program, the bill does not contemplate joint ventures between mentors and prote ́ge ́ under the prote ́ge ́’s small business status, unless such practice is otherwise authorized. Benefits 

to the mentors and the effect of the relationship on contracting are 

included so that SBA, if it deems appropriate, may allow mentors 

to receive subcontracting credit for providing assistance to prote ́ge ́, 

or to provide prote ́ge ́ with priority access to subcontracts. 

Subsection b(4) clarifies that these new regulations and approval 

process do not apply to the Department of Defense’s MentorProte ́ge ́ Program,25 nor do they apply to any of the mentoring requirements by the Small Business Innovation Research or the 

Small Business Technology Transfer Programs.26 Furthermore, the 

civilian agencies to which the regulations and approval process do 

apply will have a year after the Administrator issues the final regulations to bring their programs into compliance. 

Subsection (c)—Reporting 

This subsection amends Section 45 of the Small Business Act, to 

require that the Administrator annually submit a report to the 

Committee on Small Business and the Senate Committee on Small 

Business and Entrepreneurship which assesses the benefits of the 

mentor-prote ́ge ́ programs. The report is required to include each 

mentor-prote ́ge ́ program and the number of participants in each 

program, including whether the prote ́ge ́ are small, WOSB, 

SDVOSB, HUBZone or small disadvantaged firms. Furthermore, it 

must describe the types of assistance the prote ́ge ́ received, the benefits the mentors received, and the progress the prote ́ge ́ firms made 

to improve their competitive viability. The agencies with mentorprote ́ge ́ programs are expected to assist with this report. 

Subsection (d)—Definitions 

This subsection amends Section 45 of the Small Business Act to 

provide definitions of mentor, prote ́ge ́, and mentor-prote ́ge ́ program. Specifically, mentors are defined as: (1) firms of any size that 

have the ability to help prote ́ge ́ firms compete for Federal prime 

and subcontracts; (2) firms that commit to actually helping prote ́ge ́

firms compete; and (3) meet any other requirements set by the Administrator. Likewise, a prote ́ge ́ is a small business concern that is 

eligible to enter into Federal prime contracts or subcontracts and 

meets any other requirements set by the Administrator. Therefore, 

a mentor-prote ́ge ́ program is defined as a program that pairs a 

mentor with a prote ́ge ́ for purposes of assisting the prote ́ge ́ to compete for Federal prime contracts and subcontracts. 

Subsection (e)—Current Mentor Prote ́ge ́ Agreements 

This subsection provides that mentors and prote ́ge ́ with approved 

agreements in a program operating pursuant to subsection (b)(4)(C) 


pwalker on DSK7TPTVN1PROD with 
10 

shall be permitted to continue their relationship according to the 

terms of their agreement until the expiration date specified in the 

agreement. 

Subsection (f)—Submission of Agency Plans 

This subsection creates a timetable for the agency plans to be 

submitted to, commented on, and approved or denied as specified 

in subsection (b)(1)(A). Within 6 months of the Administrator promulgating the rules required by new subsection (b)(3), agencies operating mentor-prote ́ge ́ programs pursuant to new subsection 

(b)(4)(c) must submit the plans specified in new subsection 

(b)(1)(A). The Administrator shall provide initial comments on each 

plan within 60 days of receipt and shall provide final approval or 

denial of each plan within 180 days of receipt. 

Section 3. Government Accountability Office report 

This section amends section 45 of the Act to require the Government Accountability Office to conduct a study of the mentor-prote ́ge ́

programs no later than 2 years after the agencies operating under 

the Act, as amended by this legislation, have their plans approved 

or denied. The study must: (1) update the study required by section 

1345 of the Jobs Act; (2) examine whether potential affiliation 

issues between mentors and prote ́ge ́ under the prior programs have 

been resolved by enactment of this legislation; and (3) examine 

whether the regulations issued pursuant to section 45(b)(3)(1) of 

the Small Business Act have increased opportunities for mentorprote ́ge ́ pairs; and (4) if they have decreased the paperwork required for such pair participating in programs at multiple agencies. 

VIII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, May 17, 2012. 

Hon. SAM GRAVES, 

Chairman, Committee on Small Business, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3985, the Building Better 

Business Partnerships Act of 2012. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Susan Willie. 

Sincerely, 

DOUGLAS W. ELMENDORF, 

Director. 

Enclosure. 

H.R. 3985—Building Better Business Partnerships Act of 2012 

Summary: H.R. 3985 would amend programs that pair disadvantaged small businesses with other eligible businesses (mentorprote ́ge ́ programs) in order to allow them to participate in set-aside 

programs for federal contracts. The bill would direct the Small 

Business Administration (SBA) to broaden the scope of its mentorprote ́ge ́ program to cover all small businesses (currently the program is open to a limited pool of participants). The bill also would 


pwalker on DSK7TPTVN1PROD with 
11 

direct the SBA to develop regulations that would apply to mentorprote ́ge ́ programs operating in other federal agencies. 

Based on information from the SBA and several federal agencies 

that operate mentor-prote ́ge ́ programs, CBO estimates that implementing H.R. 3985 would cost $6 million over the 2013–2017 period, assuming appropriation of the necessary amounts. CBO estimates that enacting H.R. 3985 would not affect direct spending or 

revenues; therefore, pay-as-you-go procedures do not apply. 

H.R. 3985 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would not affect the budgets of state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary impact of HR. 3985 is shown in the following table. The costs 

of this legislation fall within several budget functions, including 

250 (general science, space, and technology), 370 (commerce and 

housing credit), and 550 (health). 

By fiscal year, in millions of dollars 

2013 2014 2015 2016 2017 2013– 

2017 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated Authorization Level .......................................... * 1 2 2 2 7 

Estimated Outlays ............................................................ * 1 1 2 2 6 

*= less than $500,000. 

Basis of estimate: H.R. 3985 would expand the SBA’s mentorprote ́ge ́ program beyond the limited pool of participants eligible to 

participate under current law and would direct the agency to establish rules to ensure that mentor-prote ́ge ́ programs in other federal 

agencies improve the ability of prote ́ge ́s to compete for federal contracts. Under current law, 13 agencies have developed mentorprote ́ge ́ programs with similar but not standardized policies and 

procedures. Once the SBA has established rules for the program, 

the bill would give participating agencies one year to develop a 

plan that conforms to those rules. 

The cost of mentor-prote ́ge ́ programs to the participating agencies consists primarily of personnel and associated overhead expenses to process applications, prepare reports, and track outcomes. The organizational structure varies from agency to agency; 

some agencies have full-time staff members devoted to the mentorprote ́ge ́ program, with other staff assisting as part of their duties. 

Most agencies, however, have employees working part-time on the 

program. 

Based on information from the SBA and several agencies with 

existing programs, CBO expects that the new rules would probably 

require agencies to revise their current plans, meet new performance tracking and reporting requirements, and track prote ́ge ́ performance after the partnership has expired. CBO estimates that 

implementing those provisions would cost $6 million over the 

2013–2017 period, assuming appropriation of the necessary 

amounts. 

Pay-As-You-Go considerations: None. 

Intergovernmental and private-sector impact: H.R. 3985 contains 

no intergovernmental or private-sector mandates as defined in 


pwalker on DSK7TPTVN1PROD with 
12 

UMRA and would not affect the budgets of state, local, or tribal 

governments. 

Estimate prepared by: Federal Costs: Susan Willie; Impact on 

State, local, and Tribal governments: Elizabeth Cove Delisle; Impact on the private sector: Vi Nguyen. 

Estimate approved by: Theresa Gullo, Deputy Assistant Director 

for Budget Analysis. 

IX. UNFUNDED MANDATES

H.R. 3985 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act, Pub. L. 

No. 104–4, and would impose no costs on state, local or tribal governments. 

X. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY AND

TAX EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House, the Committee provides the following opinion and estimate 

with respect to new budget authority, entitlement authority and 

tax expenditures. 

The Committee does not adopt as its own the estimate of new 

budget authority contained in the cost estimate prepared by the Director of the Congressional Budget Office (CBO) pursuant to § 402 

of the Congressional Budget Act of 1974. CBO estimates that implementation of the program will cost $6 million over five years. 

Since the agencies already operate their own mentor-prote ́ge ́ program, the only additional cost will be preparing the plan to obtain 

approval by the Administrator of the SBA. Such costs, the Committee believes, would be handled under existing levels of appropriations for agency salaries and expenses. However, the costs that 

will be incurred are simply opportunity costs, as current personnel 

will need to prioritize revising plans and promulgating regulations. 

Thus, the Committee does not believe that any additional appropriations will be necessary to implement this legislation. 

XI. OVERSIGHT FINDINGS

In accordance with clause 2(b)(1) of rule X of the Rules of the 

House, the oversight findings and recommendations of the Committee on Small Business with respect to the subject matter contained in H.R. 3985 are incorporated into the descriptive portions 

of this report. 

XII. STATEMENT OF CONSTITUTIONAL AUTHORITY

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the authority for this 

legislation in Art. I, § 8, cls. 1, 3, and 18 and Art. IV, § 3, cl. 2 of 

the Constitution of the United States. 

XIII. CONGRESSIONAL ACCOUNTABILITY ACT

H.R. 3985 does not relate to the terms and conditions of employment or access to public services or accommodations within the 

meaning of § 102(b)(3) of Pub. L. No. 104–1. 


pwalker on DSK7TPTVN1PROD with 
13 

XIV. FEDERAL ADVISORY COMMITTEE ACT STATEMENT

H.R. 3985 does not establish or authorize the establishment of 

any new advisory committees as that term is defined in the Federal 

Advisory Committee Act, 5 U.S.C. App. 2. 

XV. STATEMENT OF NO EARMARKS

Pursuant to clause 9 of rule XXI, H.R. 3985 does not contain any 

congressional earmarks, limited tax benefits or limited tariff benefits as defined in subsections (d), (e) or (f) of clause 9 of rule XXI 

of the Rules of the House. 

XVI. PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House, 

the Committee establishes the following performance-related goals 

and objectives for this legislation: 

H.R. 3985 includes a number of provisions designed to improve establishing mentor-prote ́ge ́ agreements under the Small 

Business Act, by guaranteeing that the programs benefit small 

businesses, and ensuring that the mentor-prote ́ge ́ agreement 

does not inadvertently harm the prote ́ge ́’s small business status. 

XVII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

SMALL BUSINESS ACT 

* * * * * * * 

SEC. 45. MENTOR-PROTEGE PROGRAMS. 

(a) ADMINISTRATION PROGRAM.— 

(1) AUTHORITY.—The Administrator is authorized to establish 

a mentor-protege program for all small business concerns. 

(2) MODEL FOR PROGRAM.—The mentor-protege program established under paragraph (1) shall be identical to the mentorprotege program of the Administration for small business concerns that participate in the program under section 8(a) of this 

Act (as in effect on the date of enactment of the Building Better 

Business Partnerships Act of 2012), except that the Administrator may modify the program to the extent necessary given the 

types of small business concerns included as proteges. 

(b) PROGRAMS OF OTHER AGENCIES.— 

(1) APPROVAL REQUIRED.—Except as provided in this subsection, a Federal department or agency may not carry out a 

mentor-protege program for small business concerns unless— 

(A) the head of the department or agency submits a plan 

to the Administrator for the program; and 

(B) the Administrator approves such plan. 


pwalker on DSK7TPTVN1PROD with 
14 

(2) BASIS FOR APPROVAL.—The Administrator shall approve 

or disapprove a plan submitted under paragraph (1) based on 

whether the program proposed— 

(A) will assist proteges to compete for Federal prime contracts and subcontracts; and 

(B) complies with the regulations issued under paragraph (3). 

(3) REGULATIONS.—Not later than 270 days after the date of 

enactment of the Building Better Business Partnerships Act of 

2012, the Administrator shall issue, subject to notice and comment, regulations with respect to mentor-protege programs, 

which shall ensure that such programs improve the ability of 

proteges to compete for Federal prime contracts and subcontracts and which shall address, at a minimum, the following: 

(A) Eligibility criteria for program participants, including any restrictions on the number of mentor-protege relationships permitted for each participant. 

(B) The types of developmental assistance to be provided 

by mentors, including how the assistance provided shall 

improve the competitive viability of the proteges. 

(C) Whether any developmental assistance provided by a 

mentor may affect the status of a program participant as 

a small business concern due to affiliation. 

(D) The length of mentor-protege relationships. 

(E) The effect of mentor-protege relationships on contracting. 

(F) Benefits that may accrue to a mentor as a result of 

program participation. 

(G) Reporting requirements during program participation. 

(H) Postparticipation reporting requirements. 

(I) The need for a mentor-protege pair, if accepted to participate as a pair in a mentor-protege program of any Federal department or agency, to be accepted to participate as 

a pair in all Federal mentor-protege programs. 

(J) Actions to be taken to ensure benefits for proteges, 

and to protect proteges against actions by the mentor that— 

(i) may adversely affect the proteges status as a 

small business; or 

(ii) provide disproportionate economic benefits to the 

mentor relative to those provided the protege. 

(4) LIMITATION ON APPLICABILITY.—Notwithstanding the provisions of subsection (b)(1), the provisions of subsection (b)(1) 

shall apply to the following: 

(A) Any mentor-protege program of the Department of Defense in effect on the date of enactment of the Building Better Business Partnerships Act of 2012. 

(B) Any mentoring assistance provided under a Small 

Business Innovation Research Program or a Small Business Technology Transfer Program. 

(C) Until the date that is 1 year after the date on which 

the Administrator issues regulations under paragraph (3), 

any Federal department or agency operating a mentor-proVerDate Mar 15 2010 05:16 Dec 30, 2012 Jkt 029006 PO 00000 Frm 00014 Fmt 6659 Sfmt 6603 E:\HR\OC\HR723.XXX HR723

pwalker on DSK7TPTVN1PROD with 
15 

tege program in effect on the date of enactment of the 

Building Better Business Partnerships Act of 2012. 

(c) REPORTING.— 

(1) IN GENERAL.—Not later than 2 years after the date of enactment of the Building Better Business Partnerships Act of 

2012, and annually thereafter, the Administrator shall submit 

to the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate a report that— 

(A) identifies each Federal mentor-protege program; 

(B) specifies the number of participants in each such program, including the number of participants that are— 

(i) small business concerns; 

(ii) small business concerns owned and controlled by 

service-disabled veterans; 

(iii) qualified HUBZone small business concerns; 

(iv) small business concerns owned and controlled by 

socially and economically disadvantaged individuals; 

or 

(v) small business concerns owned and controlled by 

women; 

(C) describes the type of assistance provided to proteges 

under each such program; 

(D) describes the benefits provided to mentors under each 

such program; and 

(E) describes the progress of proteges under each such 

program with respect to competing for Federal prime contracts and subcontracts. 

(2) PROVISION OF INFORMATION.—The head of each Federal 

department or agency carrying out a mentor-protege program 

shall provide to the Administrator, upon request, the information necessary for the Administrator to submit a report required 

under paragraph (1). 

(d) DEFINITIONS.—In this section, the following definitions apply: 

(1) MENTOR.—The term ‘‘mentor’’ means a for-profit business 

concern, of any size, that— 

(A) has the ability to assist and commits to assisting a 

protege to compete for Federal prime contracts and subcontracts; and 

(B) satisfies any other requirements imposed by the Administrator. 

(2) MENTOR-PROTEGE PROGRAM.—The term ‘‘mentor-protege 

program’’ means a program that pairs a mentor with a protege 

for the purpose of assisting the protege to compete for Federal 

prime contracts and subcontracts. 

(3) PROTEGE.—The term ‘‘protege’’ means a small business 

concern that— 

(A) is eligible to enter into Federal prime contracts and 

subcontracts; and 

(B) satisfies any other requirements imposed by the Administrator. 

(e) CURRENT MENTOR PROTEGE AGREEMENTS.—Mentors and proteges with approved agreement in a program operating pursuant to 

subsection (b)(4)(C) shall be permitted to continue their relationship 


pwalker on DSK7TPTVN1PROD with 
16 

according to the terms specified in their agreement until the expiration date specified in the agreement. 

(f) SUBMISSION OF AGENCY PLANS.—Agencies operating mentor 

protege programs pursuant to subsection (b)(4)(C) must submit the 

plans specified in subsection (b)(1)(A) to the Administrator within 

6 months of the promulgation of rules required by subsection (b)(3). 

The Administrator shall provide initial comments on each plan 

within 60 days of receipt, and final approval or denial of each plan 

with 180 days of receipt. 

SEC. ø45.¿ 46. All laws and parts of laws inconsistent with this 

Act are hereby repealed to the extent of such inconsistency. 

Æ 


pwalker on DSK7TPTVN1PROD with