73306 Federal Register / Vol. 88, No. 205 / Wednesday, October 25, 2023 / Proposed Rules 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Chapter 2 

[Docket DARS–2023–0037] 

RIN 0750–AL84 

Defense Federal Acquisition 

Regulation Supplement: DoD MentorProte ́ge ́ Program (DFARS Case 2023– 

D011) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule. 

SUMMARY: DoD is proposing to amend 

the Defense Federal Acquisition 

Regulation Supplement (DFARS) to 

implement a section of the National 

Defense Authorization Act for Fiscal 

Year 2023 that permanently authorizes 

and modifies the DoD Mentor-Prote ́ge ́

Program. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before 

December 26, 2023 to be considered in 

the formation of a final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2023–D011, 

using any of the following methods: 

Æ Federal eRulemaking Portal: 

https://www.regulations.gov. Search for 

DFARS Case 2023–D011. Select 

‘‘Comment’’ and follow the instructions 

to submit a comment. Please include 

‘‘DFARS Case 2023–D011’’ on any 

attached documents. 

Æ Email: osd.dfars@mail.mil. Include 

DFARS Case 2023–D011 in the subject 

line of the message. 

Comments received generally will be 

posted without change to https://

www.regulations.gov, including any 

personal information provided. To 

confirm receipt of your comment(s), 

please check https://

www.regulations.gov, approximately 

two to three days after submission to 

verify posting. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Jeanette Snyder, 703–508–7524. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD is proposing to revise the DFARS 

to implement section 856 of the 

National Defense Authorization Act 

(NDAA) for Fiscal Year (FY) 2023 (Pub. 

L. 117–263). Section 856 transferred 

section 831 of the NDAA for FY 1991 

(Pub. L. 101–510; 10 U.S.C. 4901 note) 

to 10 U.S.C. 4902 and authorized the 

DoD Mentor-Prote ́ge ́ Program on a 

permanent basis. Section 856 also 

extends the term for program 

participation and removes the term 

limitation for mentors to incur costs 

under mentor-prote ́ge ́ agreements 

entered into after December 23, 2022. 

Section 856 does not apply to mentorprote ́ge ́ agreements entered into prior to 

December 23, 2022. 

II. Discussion and Analysis 

DoD proposes to modify DFARS 

subpart 219.71 and DFARS appendix I 

to implement section 856 of the NDAA 

for FY 2023, which authorizes on a 

permanent basis and modifies the DoD 

Mentor-Prote ́ge ́ Program (the Program). 

This proposed rule removes all 

references to ‘‘pilot’’ to acknowledge 

that the Program is no longer a 

temporary, pilot program. Removal of 

the deadline for entering into a mentorprote ́ge ́ agreement is also proposed, as 

this deadline is no longer applicable 

since the program is no longer 

authorized on a temporary basis. This 

proposed rule removes the specific 

dates for mentor reimbursements and 

credit toward subcontracting goals in its 

small business subcontracting plan 

under mentor-prote ́ge ́ agreements 

entered into after December 23, 2022. 

In addition, DoD proposes to 

implement other changes made by 

section 856. The dollar threshold for 

mentor eligibility is proposed to be 

changed from $100 million to $25 

million. The program participation term 

is proposed to be extended from two 

years to three years. The proposed rule 

includes the addition of 

‘‘manufacturing, test and evaluation’’ to 

the list of assistance that a mentor may 

provide to a prote ́ge ́ under a mentorprote ́ge ́ agreement and the addition of 

‘‘manufacturing innovation institutes’’ 

to the list of assistance that a mentor 

firm may obtain for the prote ́ge ́ firm 

under a mentor-prote ́ge ́ agreement. 

III. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold, for Commercial Products 

(Including Commercially Available Offthe-Shelf Items), and for Commercial 

Services 

This proposed rule amends the clause 

at DFARS 252.232–7005, 

Reimbursement of Subcontractor 

Advance Payments—DoD Pilot MentorProte ́ge ́ Program, to remove the word 

‘‘Pilot’’ from the clause title. However, 

this rule does not impose any new 

requirements on contracts at or below 

the SAT, for commercial products 

including COTS items, or for 

commercial services. The clause will 

continue to not apply to acquisitions at 

or below the SAT, to acquisitions of 

commercial products including COTS 

items, and to acquisitions of commercial 

services. 

IV. Expected Impact of the Rule 

This proposed rule implements the 

permanent authorization of and 

statutory amendments to the DoD 

Mentor-Prote ́ge ́ Program. The purpose of 

the program is to provide incentives to 

DoD contractors to furnish eligible small 

business concerns with assistance 

designed to— 

(1) Enhance the capabilities of small 

business concerns to perform as 

subcontractors and suppliers under DoD 

contracts and other contracts and 

subcontracts; and 

(2) Increase the participation of small 

business concerns as subcontractors and 

suppliers under DoD contracts, other 

Federal Government contracts, and 

commercial contracts. 

Therefore, this proposed rule, when 

finalized, will benefit small business 

concerns that participate in the program 

by extending the opportunity to enter 

into DoD Mentor-Prote ́ge ́ agreements 

and extending the term of the 

agreements. This proposed rule is also 

expected to benefit large entities and the 

Government by expanding the defense 

industrial base. 

V. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is not a significant 

regulatory action and, therefore, was not 

subject to review under Section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, as amended. 

VI. Regulatory Flexibility Act 

DoD does not expect this proposed 

rule, when finalized, to have a 

significant economic impact on a 

substantial number of small entities 

within the meaning of the Regulatory 

Flexibility Act, 5 U.S.C. 601, et seq., 

because this proposed rule is only 

expected to impact a limited number of 

small entities that become prote ́ge ́s 

under a DoD mentor-prote ́ge ́ agreement. 

However, an initial regulatory flexibility 

analysis has been performed and is 

summarized as follows: 


lotter on DSK11XQN23PROD with PROPOSALS1
Federal Register / Vol. 88, No. 205 / Wednesday, October 25, 2023 / Proposed Rules 73307 

This proposed rule is necessary to 

implement section 856 of the National 

Defense Authorization Act (NDAA) for 

Fiscal Year (FY) 2023 (Pub. L. 117–263). 

Section 856 transferred section 831 of 

the NDAA for FY 1991 (Pub. L. 101– 

510; 10 U.S.C. 4901 note) to 10 U.S.C. 

4902 and authorized the DoD MentorProte ́ge ́ Program on a permanent basis. 

Section 856 also extends the term for 

program participation and removes the 

term limitation for mentors to incur 

costs under agreements entered into 

after December 23, 2022. 

The objective of this proposed rule is 

to implement the permanent 

authorization of the DoD Mentor-Prote ́ge ́

Program and to make other Program 

changes. The legal basis for the rule is 

section 856 of the NDAA for FY 2023. 

The number of new DoD mentorprote ́ge ́ agreements entered into in FY 

2021 was 50, with a total of 104 active 

agreements; in FY 2022, 29 new 

agreements were entered into, with a 

total of 62 active agreements; and in FY 

2023, 25 new agreements were entered 

into, with a total of 75 active 

agreements. The average number of new 

agreements entered into during the last 

three fiscal years was approximately 35 

per year, with an average of 80 total 

active agreements per fiscal year. DoD 

estimates 44 new agreements will be 

entered into in FY 2024, with a total of 

81 active agreements in place. As of 

June 5, 2023, there are 62 unique small 

entities with active agreements. Since 

the number of small entities that will 

enter into new agreements is unknown, 

DoD cannot provide a more precise 

estimate of the number of small entities 

to which this rule will apply. 

This proposed rule does not impose 

any new reporting, recordkeeping, or 

other compliance requirements for small 

entities. 

This proposed rule does not 

duplicate, overlap, or conflict with any 

other Federal rules. 

DoD did not identify any significant 

alternatives to the rule that would 

accomplish the stated objectives of the 

statute and that would minimize the 

significant economic impact of the rule 

on small entities. DoD does not expect 

this proposed rule, when finalized, to 

have a significant economic impact on 

a substantial number of small entities. 

Any impact is expected to be beneficial. 

DoD invites comments from small 

business concerns and other interested 

parties on the expected impact of this 

rule on small entities. 

DoD will also consider comments 

from small entities concerning the 

existing regulations in subparts affected 

by this rule in accordance with 5 U.S.C. 

610. Interested parties must submit such 

comments separately and should cite 5 

U.S.C. 610 (DFARS Case 2023–D011), in 

correspondence. 

VII. Paperwork Reduction Act 

The Paperwork Reduction Act (44 

U.S.C. chapter 35) applies to this 

proposed rule. However, these changes 

to the DFARS do not impose additional 

information collection requirements to 

the paperwork burden previously 

approved by the Office of Management 

and Budget (OMB) under OMB Control 

Number 0704–0332. 

List of Subjects in 48 CFR Chapter 2 

Government procurement. 

Jennifer D. Johnson, 

Editor/Publisher, Defense Acquisition 

Regulations System. 

Therefore, 48 CFR parts 219, 232, 252, 

and Appendix I to Chapter 2 are 

proposed to be amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 219, 232, 252, and Appendix I to 

Chapter 2 continues to read as follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

PART 219—SMALL BUSINESS 

PROGRAMS 

■ 2. Revise section 219.7100 to read as 

follows: 

219.7100 Scope. 

This subpart implements the DoD 

Mentor-Prote ́ge ́ Program (referred to as 

the Program) authorized under 10 U.S.C. 

4902. The purpose of the Program is to 

provide incentives for DoD contractors 

to assist prote ́ge ́ firms in enhancing 

their capabilities and to increase 

participation of such firms in 

Government and commercial contracts. 

219.7101 [Amended] 

■ 3. Amend section 219.7101 by 

removing the word ‘‘Pilot’’. 

219.7103–1 [Amended] 

■ 4. Amend section 219.7103–1 by 

removing the word ‘‘Pilot’’. 

219.7103–2 [Amended] 

■ 5. Amend section 219.7103–2 in 

paragraph (b) by removing the word 

‘‘Pilot’’. 

■ 6. Amend section 219.7104 by 

revising paragraphs (b) and (d) to read 

as follows: 

219.7104 Developmental assistance costs 

eligible for reimbursement or credit. 

* * * * * 

(b) Before incurring any costs under 

the Program, mentor firms must 

establish the accounting treatment of 

developmental assistance costs eligible 

for reimbursement or credit. For mentorprote ́ge ́ agreements entered into prior to 

December 23, 2022, to be eligible for 

reimbursement under the Program, the 

mentor firm must incur the costs not 

later than September 30, 2026. 

* * * * * 

(d) For mentor-prote ́ge ́ agreements 

entered into prior to December 23, 2022, 

developmental assistance costs incurred 

by a mentor firm not later than 

September 30, 2026, that are eligible for 

crediting under the Program, may be 

credited toward subcontracting plan 

goals as set forth in appendix I. For 

mentor-prote ́ge ́ agreements entered into 

on or after December 23, 2022, 

developmental assistance costs that are 

eligible for crediting under the Program 

may be credited toward subcontracting 

plan goals as set forth in appendix I. 

PART 232—CONTRACT FINANCING 

232.412–70 [Amended] 

■ 7. Amend section 232.412–70 in 

paragraph (b) by removing the word 

‘‘Pilot’’. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 8. Revise the clause heading, title, and 

date to read as follows: 

252.232–7005 Reimbursement of 

Subcontractor Advance Payments—DoD 

Mentor-Prote ́ge ́ Program. 

* * * * * 

Reimbursement of Subcontractor 

Advance Payments—DoD Mentor– 

Prote ́ge ́ Program (Date) 

* * * * * 

■ 9. Amend appendix I to chapter 2— 

■ a. By revising the appendix title; 

■ b. In section I–100 by revising 

paragraph (a) introductory text. 

■ c. In section I–102— 

■ i. In paragraph (a)(3)(i) by removing 

‘‘$100’’ and adding ‘‘$25’’ in its place; 

■ ii. In paragraph (a)(3)(ii) by removing 

‘‘or’’; and 

■ iii. By adding paragraph (a)(3)(iv). 

■ d. By revising section I–103. 

■ e. In section I–106— 

■ i. In paragraph (d)(1)(ii) by removing 

‘‘control’’ and adding ‘‘control, 

manufacturing, test and evaluation,’’ in 

its place; and 

■ ii. By adding paragraph (d)(6)(vi). 

■ f. In section I–107 by revising 

paragraph (k). 

■ g. In section I–108 paragraph (a)(5) by 

removing ‘‘2 years’’ and adding ‘‘3 

years’’ in its place. 

■ h. In section I–109 paragraph (b) by 

removing the word ‘‘Pilot’’. 

■ i. In section I–111 by removing 

‘‘Director, OSBP’’ and adding ‘‘Director, 


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73308 Federal Register / Vol. 88, No. 205 / Wednesday, October 25, 2023 / Proposed Rules 

OSBP, OUSD(A&S) or the Director, 

OSBP’’ in its place. 

■ j. In section I–112.2 by removing 

paragraph (a)(3) and redesignating 

paragraph (a)(4) as (a)(3). 

The revisions and additions read as 

follows: 

Appendix I to Chapter 2—Policy and 

Procedures for the DoD Mentor-Prote ́ge ́

Program 

I–100 Purpose 

(a) This appendix implements the DoD 

Mentor-Prote ́ge ́ Program (referred to as the 

Program) authorized under 10 U.S.C. 4902. 

The purpose of the Program is to provide 

incentives to DoD contractors to furnish 

eligible small business concerns with 

assistance designed to— 

* * * * * 

I–102 Participant Eligibility 

(a) * * * 

(3) * * * 

(iv) Is otherwise capable to assist in the 

development of prote ́ge ́ firms and is 

approved by the Director OSBP, OUSD(A&S). 

* * * * * 

I–103 Incentives for Mentors 

Mentors incurring costs through September 

30, 2026, pursuant to a-mentor-prote ́ge ́

agreement approved prior to December 23, 

2022, and mentors incurring costs pursuant 

to a mentor-prote ́ge ́ agreement approved on 

or after December 23, 2023, may be eligible 

for— 

(a) Credit toward the attainment of its 

applicable subcontracting goals for 

unreimbursed costs incurred in providing 

developmental assistance to its prote ́ge ́

firm(s); 

(b) Reimbursement pursuant to the 

execution of a separately priced contract line 

item added to a DoD contract; or 

(c) Reimbursement pursuant to entering 

into a separate DoD contract upon 

determination by the Director, OSBP, of the 

cognizant military department or defense 

agency that unusual circumstances justify 

using a separate contract. 

* * * * * 

I–106 Development of Mentor-Prote ́ge ́

Agreements 

* * * * * 

(d) * * * 

(6) * * * 

(vi) Manufacturing innovation institutes. 

* * * * * 

I–107 Elements of a Mentor-Prote ́ge ́

Agreement 

* * * * * 

(k) A program participation term for the 

agreement that does not exceed 3 years. The 

agreement may be extended for a period not 

to exceed 2 years if approved by the Director, 

OSBP, OUSD(A&S). The Director, OSBP, of 

the cognizant military department or defense 

agency will submit requests for an extension 

of the agreement to the Director, OSBP, 

OUSD(A&S) for approval. The request will 

include a justification describing the unusual 

circumstances that warrant a term in excess 

of 3 years; 

* * * * * 

[FR Doc. 2023–23436 Filed 10–24–23; 8:45 am] 

BILLING CODE 6001–FR–P 


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