Source: https://www.federalregister.gov/documents/2000/02/10/00-2946/defense-federal-acquisition-regulation-supplement-mentor-protege-program-improvements
Timestamp: 2016-09-30 03:32:01
Document Index: 249683335

Matched Legal Cases: ['art 219', 'art 219', 'art2', 'art 219', 'art 219', 'art 19', 'art 19', 'art3', 'art 121', 'art 32']

:: Defense Federal Acquisition Regulation Supplement; Mentor-Protege Program Improvements
Subpart 219.71—Pilot Mentor-Protege Program Appendix I—Policy and Procedures for the DOD Pilot Mentor-Protege Program
I-101 Definitions.
I-101.1 Emerging SDB concern.
I-101.2 Historically Black college or university.
I-101.3 Minority institution of higher education.
I-102 General procedures.
I-103 Program duration.
I-104 Eligibility requirements for a protege firm.
I-105 Selection of protege firms.
I-106 Approval process for companies to participate in the Program as mentor firms. I-107 Mentor-protege agreements.
I-108 Reimbursement procedures.
I-110 Advance agreements on the treatment of developmental assistance costs.
I-111 Reporting requirements.
I-112 Agreement reviews.
https://www.federalregister.gov/d/00-2946
The Acting Director of Defense Procurement has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 811 of the National Defense Authorization Act for Fiscal Year 2000. Section 811 amends statutory provisions pertaining to the DoD Pilot Mentor-Protege Program.
Comment date: Comments on the interim rule should be submitted in writing to the address shown below on or before April 10, 2000, to be considered in the formation of the final rule.
Interested parties should submit written comments to: Defense Acquisition Regulations Council, Attn: Ms. Susan Schneider, PDUSD (AT&L) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062. Telefax (703) 602-0350.
Please cite DFARS Case 99-D307 in all correspondence related to this rule. E-mail comments should cite DFARS Case 99-D307 in the subject line.
This interim rule revises DFARS Subpart 219.71 and Appendix I to implement Section 811 of the National Defense Authorization Act for Fiscal Year 2000 (Public Law 106-65). Section 811 amends statutory provisions pertaining to the DoD Pilot Mentor-Protege Program. The amendments revise the procedures for reimbursement Start Printed Page 6555of costs to mentor firms for assistance provided to protege firms; require both mentor and protege firms to submit progress reports; require the Defense Contract Management Command to conduct annual performance reviews of mentor-protege agreements; extend the period for entering into mentor-protege agreements until September 30, 2002; and extend the period during which mentor firms may incur costs under the Program until September 30, 2005.
DoD does not expect this rule 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. The rule changes procedures for administering and monitoring the Mentor-Protege Program, but maintains the primary objective of providing incentives for major DoD contractors to assist small disadvantaged business concerns and qualified organizations employing the severely disabled in enhancing their capabilities to satisfy Government and commercial contract requirements. Therefore, DoD has not performed and initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 99-D307.
The Paperwork Reduction Act (44 U.S.C. 3501, et seq.) applies because the interim rule contains new information collection requirements. Under the emergency processing provisions of 44 U.S.C. 3507(j) as implemented at 5 CFR 1320.13, the Office of Management and Budget (OMB) has granted emergency approval of the information collection requirements through July 31, 2000, under OMB Clearance Number 0704-0412. DoD will obtain the OMB approval required by 44 U.S.C. 3507(a)(2) prior to publication of the final rule.
b. The accuracy of the agency's estimate of the burden of the information collection;
2. Title, Associated Form, and OMB Number: DoD Pilot Mentor-Protege Program, Defense Federal Acquisition Regulation Supplement Appendix I; OMB Number 0704-0412.
3. Needs and Uses: The new information collection required by Appendix I, Policy and Procedures for the DoD Pilot Mentor-Protege Program, is required by Section 811 of the National Defense Authorization Act for Fiscal Year 2000 (Public Law 106-65). DoD will use the information to assess whether the purposes of the Pilot Mentor-Protege Program have been attained and to prepare the reports to Congress required by Section 811 of Public Law 106-65.
4. Affected Public: Businesses or other for-profit entities.
5. Annual Burden Hours: 435.
6. Number of Respondents: 145.
8. Number of Responses: 145.
9. Average Burden Per Response: 3 hours (1 reporting hour; 2 recordkeeping hours).
10. Frequency: Annually.
11. Supplementary Information: DFARS Appendix I requires a protege firm to report on its progress under a mentor-protege agreement by concurring with or rebutting its mentor firm's year-end report. The protege firm also must provide data on its employment, revenues, and participation in DoD contracts. The report is required annually during the protege firm's Program participation term and for 2 fiscal years after the expiration of the Program participation term.
A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish this interim rule prior to affording the public an opportunity to comment. This interim rule implements Section 811 of the National Defense Authorization Act for Fiscal Year 2000. Section 811 amends statutory provisions pertaining to the DoD Pilot Mentor-Protege Program. Section 811 became effective on October 5, 1999. DoD will consider comments received in response to this interim rule in the formation of the final rule.
Start Amendment Part2. Subpart 219.71 is revised to read as follows:End Amendment Part
Subpart 219.71—Pilot Mentor-Protege Program 219.7100 Scope.
This subpart implements the Pilot Mentor-Protege Program established under Section 831 of the National Defense Authorization Act for Fiscal Year 1991 (Pub. L. 101-510; 10 U.S.C. 2302 note). The purpose of the Program is to provide incentives for DoD contractors to assist small disadvantaged businesses in enhancing their capabilities and to increase participation of such firms in Government and commercial contracts. Qualified organizations employing the severely disabled, as defined in Section 8064A of Pub. L. 102-172, are also eligible to participate as protege firms.
(a) Mentor firms that are prime contractors with at least one active subcontracting plan negotiated under FAR Subpart 19.7.Start Printed Page 6556
(b) Protege firms that are small disadvantaged business (SDB) concerns as defined at 219.001(1), or qualified organizations employing the severely disabled, eligible for receipt of Federal contracts and selected by the mentor firm.
(ii) A separate contract, upon written determination by the Director, Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) SADBU, OUSD (AT&L)), that unusual circumstances justify reimbursement using a separate contract; or
(2) Credit toward SDB subcontracting goals, established under a subcontracting plan negotiated under FAR Subpart 19.7, for developmental assistance costs that are not reimbursed.
The procedures for application, acceptance, and participation in the Program are in Appendix I, Policy and Procedures for the DoD Pilot Mentor-Protege Program. The Director, SADBU, OUSD (AT&L), approves contractors as mentor firms, approves mentor-protege agreements, and forwards approved mentor-protege agreements to the contracting officer when program funding is available through a DoD program manager.
(b) Modify (without consideration) applicable contract(s) to incorporate the clause at 252.232-7005, Reimbursement of Subcontractor Advance Payments—DoD Pilot Mentor-Protege Program, when a mentor firms provides advance payments to a protege firm under the Program and the mentor firm requests reimbursement of advance payments.
(c) Modify (without consideration) applicable contract(s) to incorporate other than customary progress payments for small disadvantaged businesses in accordance with FAR 32.504(c) if a mentor firm provides such payments to a protege firm and the mentor firm requests reimbursement.
(1) A DoD program manager has made funds available for that purpose; and
(e) Negotiate and award a separate contract for reimbursement of developmental assistance cost if—
(1) A DoD program manager has made funds available for that purpose;
(3) The Director, SADBU, OUSD (AT&L), has made a determination in accordance with 219.7102(d)(1)(ii).
(f) Authorized reimbursement for costs of assistance furnished to a protege firm in excess of $1,000,000 in a fiscal year only after receipt of a written determination from the Director, SADBU, OUSD (AT&L).
(h) Provide a copy of the approved Mentor-Protege agreement to the Defense Contract Management Command administrative contracting officer responsible for conducting the annual performance review (see Appendix I, Section I-112).
(a) Development assistance provided under an approved mentor-protege agreement is distinct from, and must not duplicate, any effort that is the normal and expected product of the award and administration of the mentor firm's subcontracts. The mentor firm must accumulate and charge costs associated with the latter in accordance with its approved accounting practices. Mentor firm costs that are eligible for reimbursement are set forth in Appendix I.
(b) Before incurring any costs under the Program, mentor firms must establish the accounting treatment of developmental assistance costs eligible for reimbursement or credit. Advance agreements are encouraged. To be eligible for reimbursement under the Program, the mentor firm must incur the costs before October 1, 2005.
(d) Developmental assistance costs incurred by a mentor firm before October 1, 2005, that are eligible for crediting under the Program, may be credited toward subcontracting plan goals as set forth in Appendix I.
Mentor and protege firms must report on the progress made under mentor-protege agreements as indicated in Appendix I, Section I-111.
The Defense Contract Management Command will conduct annual performance reviews of all mentor-protege agreements as indicated in Appendix I, Section I-112.
Start Amendment Part3. Appendix I to Chapter 2 is revised to read as follows:End Amendment Part
I-106 Approval process for companies to participate in the Program as mentor firms.
I-107 Mentor-protege agreements.
I-109 Credit for unreimbursed developmental assistance costs.
(a) This Appendix I to 48 CFR Chapter 2 implements the Pilot Mentor-Protege Program (hereinafter referred to as the “Program”) established under Section 831 of Pub. L. 101-510, the National Defense Authorization Act for Fiscal Year 1991 (10 U.S.C. 2302 note). The purpose of the Program is to—
(1) Provide incentives to major DoD contractors, performing under at least one active approved subcontracting plan negotiated with DoD or another Federal agency, to assist small disadvantaged business (SDB) concerns or qualified organizations employing the severely disabled (hereinafter referred to as “protege firms”) in enhancing their capabilities to satisfy DoD and other contract and subcontract requirements;
(2) Increase the overall participation of protege firms as subcontractors and suppliers under DoD contracts, other Federal agency contracts, and commercial contracts; and (3) Foster the establishment of long-term business relationships between protege firms and such contractors.Start Printed Page 6557
(b) Under the Program, eligible companies approved as mentor firms will enter into mentor-protege agreements with eligible protege firms to provide appropriate developmental assistance to enhance the capabilities of the protege firms to perform as subcontractors and suppliers. According to the law, DoD may provide the mentor firm with either cost reimbursement or credit against SDB subcontracting goals established under contracts with DoD or other Federal agencies.
(1) An increase in the dollar value of subcontracts awarded to protege firms by mentor firms under DoD contracts;
(2) An increase in the dollar value of contract and subcontract awards to protege firms (under DoD contracts, contracts awarded by other Federal agencies, and commercial contracts) from the date of their entry into the Program until 2 years after the conclusion of the agreement;
(3) An increase in the number and dollar value of subcontracts awarded to a protege firm (or former protege firm) by its mentor firm (or former mentor firm);
(4) An increase in subcontracting with SDB concerns in industry categories where SDBs traditionally have not participated within the mentor firm's vendor base;
(5) The involvement of emerging SDBs in the Program; and
(6) An increase in the employment level of protege firms from the date of entry into the Program until 2 years after the completion of the agreement.
(1) Reimbursement through a separate contract line item in a DoD contract or a separate contract with DoD; or (2) Credit toward SDB subcontracting goals for costs incurred under the Program.
A small disadvantaged business whose size is no greater than 50 percent of the numerical size standard applicable to the standard industrial code for the supplies or services that the protege firm provides or would provide to the mentor firm.
An institution meeting the definition of “Minority Institution” at FAR 26.301.
(a) At any time between October 1, 1991, and September 30, 2002, companies interested in becoming mentor firms that want to take credit toward SDB subcontracting goals for costs incurred for providing developmental assistance to one or more protege firms must apply to DoD for participation in the Program pursuant to the application process set forth at I-106(a).
(b) At any time between October 1, 1991, and September 30, 2002, companies interested in becoming mentor firms that are able to identify funding from a DoD program manager(s) to provide developmental assistance to one or more protege firms must apply to DoD for participation in the Program, pursuant to the application process set forth at I-106(d).
(a) From October 1, 1991, until September 30, 2002, companies that have been approved for participation in the Program as mentor firms pursuant to I-102, General Procedures, may enter into mentor-protege agreements, pursuant to I-107, Mentor Protege Agreements.
(b) From October 1, 1991, until September 30, 2005, DoD may reimburse a mentor firm's costs of providing developmental assistance to its protege firm only if a DoD program manager has identified the funding for such costs and—
(ii) For mentor-protege agreements entered into on or after October 1, 1999, the mentor firm incurs such costs after DoD and the mentor firm enter into a separate contract based upon a determination by the Director, Small and Disadvantaged Business Utilization, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) (SADBU, OUSD (AT&L)), that unusual circumstances justify using a separate contract; or (2) The mentor firm incurs such costs pursuant to the execution of a separately priced contract line item added to a DoD contract(s).
(c) From October 1, 1991, until September 30, 2005, a mentor firm may receive credit toward the attainment of its goals for subcontract awards to SDBs, for unreimbursed costs incurred in providing developmental assistance to its protege firms, only it such costs are incurred pursuant to an approved mentor-protege agreement.
(1) An SDB concern as defined at 219.001, paragraph (1) of the definition of “small disadvantaged business concern,” that is—
(ii) A small business according to the Small Business Administration (SBA) size standard for the Standard Industrial Classification (SIC) code that represents the contemplated supplies or services to be provided by the protege firm to the mentor firm; or
(b) A protege firm may self-certify to a mentor firm that it meets the eligibility requirements in paragraph (a)(1) or (2) of this section. Mentor firms may rely in good faith on a written representation that the entity meets the requirements of paragraph (a)(1) or (2) of this section, except for a protege's status as a small disadvantaged business concern (see FAR 19.703(b)).
(a) Mentor firms will be solely responsible for selecting protege firms. Mentor firms are encouraged to identify and select protege firms that are defined as emerging SDB concerns. (b) The selection of protege firms by mentor firms may not be protested, except as in paragraph (c) of this section.
(c) In the event of a protest regarding the size or disadvantaged status of an entity selected to be a protege firm as defined in I-104(a)(1), the mentor firm must refer the protest to the SBA to resolve in accordance with 13 CFR Part 121 (with respect to size) or 13 CFR 124 (with respect to disadvantaged status). (d) For purposes of the Small Business 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 its protege firm, pursuant to a mentor-protege agreement, any form of developmental assistance described in I-107(f).
(e) If at any time pursuant to paragraph (c) of this section, the SBA determines that an SDB protege firm is not an SDB concern, assistance that the mentor firm furnishes to such a concern after the date of the determination may not be considered assistance furnished under the Program.
I-106 Approval process for companies to participate in the Program as mentor firms. (a) On or after October 1, 1991, a company that is interested in becoming a mentor firm that is seeking credit toward SDB subcontracting goals for costs incurred under the Program must submit a request to the Director, SADBU, OUSD (AT&L), for approval as a mentor firm under the Program. The Director will evaluate the request based on the extent to which the company's proposal addresses the items listed in paragraphs (b) and (c) of this section. To the maximum extent possible, a company should limit its request to not more than 10 pages, single-spaced. A company may identify more than one protege in its request for approval under the Program. The request must include the information required in paragraphs (b) and (c) of this section and may cover one or more proposed mentor-protege relationships.
(b) A company must indicate whether it is interested in participating in the Program pursuant to I-100(d)(1) or (2) and must submit the following information:
(1) A statement that the company is currently performing under at least one Start Printed Page 6558active approved subcontracting plan negotiated with DoD or another Federal agency pursuant to FAR 19.702, and that the company is currently eligible for the award of Federal contracts.
(3) A summary of the company's historical and recent activities and accomplishments under its SDB program.
(4) The total dollar amount of DoD contracts and subcontracts that the company received during the 2 preceding fiscal years. (Show prime contracts and subcontracts separately per year.)
(5) The total dollar amount of all other Federal agency contracts and subcontracts that the company received during the 2 preceding fiscal years. (Show prime contracts and subcontracts separately per year.)
(6) The total dollar amount of subcontracts that the company awarded under DoD contracts during the 2 preceding fiscal years.
(7) The total dollar amount of subcontracts that the company awarded under all other Federal agency contracts during the 2 preceding fiscal years.
(8) The total dollar amount and percentage of subcontracts that the company awarded to all SDB firms under DoD contracts and other Federal agency contracts during the 2 preceding fiscal years. (Show DoD subcontract awards separately.) If the company presently is required to submit a Standard Form (SF) 295, Summary Subcontract Report, the request must include copies of the final reports for the 2 preceding fiscal years.
(1) Information on the company's ability to provide developmental assistance to the identified protege firm and how that assistance will potentially increase subcontracting opportunities in industry categories where SDBs are not dominant in the company's vendor base.
(ii) The protege firm's business classification, based upon the SIC code(s) that represents the contemplated supplies or services to be provided by the protege firm to the mentor firm.
(iii) A statement that the protege firm meets the eligibility criteria in I-104(a)(1) or (2).
(d) A company that has identified Program funds to be made available through a DoD program manager must provide the information in paragraphs (b) and (c) of this section through the appropriate program manager and the cognizant Director, SADBU, to the Director, SADBU, OUSD(AT&L), with a letter signed by the appropriate program manager indicating the amount of funding that has been identified for the developmental assistance program. The company must submit a justification and endorsement from the cognizant Director, SADBU, when requesting—
(1) Reimbursement of developmental costs in excess of $1,000,000;
(2) Reimbursement through a separate contract; or
(e) Companies seeking credit toward SDB subcontracting goals for the cost of developmental assistance, or reimbursement with funds made available by a DoD program manager, must submit four copies of the information specified in paragraphs (b) and (c) of this section to the Director, SADBU, OUSD(AT&L), ATTN: Pilot Mentor-Protege Program Manager, 1777 North Kent Street, Suite 9100, Arlington, VA 22209. Upon receipt of this information, the Director, SADBU, OUSD(AT&L), will review and evaluate each request and, to the maximum extent possible, within 30 days advise each applicant of approval or rejection of its request to become a mentor firm.
(f) A company approved as a mentor firm, either for credit or for reimbursement through funds made available by a DoD program manager, proceed with the negotiation of the mentor-protege agreement with the identified protege firm(s). (g) Companies that apply for participation in the Program pursuant to paragraph (e) of this section, and are not approved, will be provided the reasons and an opportunity to submit additional information for reconsideration.
(i) If the mentor firm is suspended or debarred while performing under an approved mentor-protege agreement, the mentor firm—
(3) Must promptly give notice of its suspension or debarment to its protege firm and the Director, SADBU, OUSD (AT&L). I-107 Mentor-protege agreements.
(a) A signed mentor-protege agreement for each mentor-protege relationship identified under I-106(b)(2) must be submitted to the Director, SADBU, OUSD (AT&L), and approved before developmental assistance costs may be incurred. To the maximum extent possible, such mentor-protege agreements will be approved within 5 business days of receipt.
(2) The SIC code that represents the contemplated supplies or services to be provided by the protege firm to the mentor firm and a statement that, at the time the agreement is submitted for approval, the protege firm, if an SDB concern, does not exceed the size standard for the appropriate SIC code;
(3) A developmental program for the protege firm specifying the type of assistance identified in paragraph (f) of this section that will be provided. The developmental program also must include—
(ii) The anticipated number, dollar value, and type of subcontracts to be awarded the protege firm consistent with the extent and nature of the mentor firm's business, and the period of time over which the subcontracts will be awarded; and (iii) The dollar value of the technical assistance program, broken out per year;
(4) A program participation term for the agreement that does not exceed 3 years. Requests for an extension of the agreement for a period not to exceed an additional 2 years are subject to the approval of the Director, SADBU, OUSD (AT&L), and are contingent upon the endorsement and submission of justification for such an extension from the cognizant Director, SADBU. The justification must detail the unusual circumstances that warrant a term in excess of 3 years;Start Printed Page 6559
(5) Procedures for the mentor firm to notify the protege firm in writing at least 30 days in advance of the mentor firm's intent to voluntarily withdraw its participation in the Program. A mentor firm may voluntarily terminate its mentor-protege agreement(s) only if it no longer wants to be a participant in the Program as a mentor firm. Otherwise, a mentor firm must terminate a mentor-protege agreement for cause;
(6) Procedures for a protege firm to notify the mentor firm in writing at least 30 days in advance of the protege firm's intent to voluntarily terminate the mentor-protege agreement;
(7) Procedures for the mentor firm to terminate the mentor-protege agreement for cause which provide that—
(iii) Upon prompt consideration of the protege firm's response, the mentor firm must either withdraw the notice of proposed termination and continue the protege firm's participation, or issue the notice of termination; and (iv) The decision of the mentor firm regarding termination for cause, conforming with the requirements of this section, will be final and is not reviewable by DoD; and (8) Additional terms and conditions as may be agreed upon by both parties.
(c) Mentor firms must send a copy of any termination notices to the Director, SADBU, OUSD (AT&L), and the Defense Contract Management Command administrative contracting officer responsible for conducting the annual performance review, and, where funding is made available through a DoD program manager, must provide a copy to the program manager and to the contracting officer.
(d) Termination of a mentor-protege agreement will not impair the obligations of the mentor firm to perform pursuant to its contractual obligations under Government contracts and subcontracts. Termination of all or part of the mentor-protege agreement will not impair the obligations of the protege firm to perform pursuant to its contractual obligations under any contract awarded to the protege firm by the mentor firm.
(e) Only developmental assistance provided after DoD approval of the mentor-protege agreement may be reimbursed.
(ii) Engineering and technical matters such as production inventory control and quality assurance; and (iii) Any other assistance designed to develop the capabilities of the protege firm under the developmental program.
(3) Payment of progress payments for the performance of subcontracts by a protege firm in amounts as provided for in the subcontract; but in no event may any such progress payment exceed 100 percent of the costs incurred by the protege firm for the performance of the subcontract. Provision of progress payments by a mentor firm to an SDB protege firm at a rate other than the customary rate for SDBs must be implemented in accordance with FAR 32.504(c). (4) Advance payments under such subcontracts. The mentor firm must administer advance payments in accordance with FAR subpart 32.4.
(6) Investment(s) in the protege firm in exchange for an ownership interest in the protege firm, not to exceed 10 percent of the total ownership interest. Investment may include, but are not limited to, cash, stock, and contribution in kind.
(g) A mentor firm may not require a protege firm to enter into a mentor-protege agreement as a condition for award of a contract by the mentor firm, including a subcontract under a DoD contract awarded to the mentor firm.
(a) DoD will reimburse a mentor firm only for the cost of developmental assistance incurred by the mentor firm and provided to a protege firm under I-107(f)(1) and (7), and pursuant to an approved mentor-protege agreement. For agreements entered into prior to October 1, 1999, DoD will provide reimbursement only through a separate contract, cooperative agreement, or other agreement entered into between DoD and the mentor firm, awarded for the purpose of providing developmental assistance to one or more protege firms; a separately priced contract line item in a DoD contract; or inclusion of program costs in indirect expense pools. For agreements entered into on or after October 1, 1999, DoD will provide reimbursement only through a separately priced contract line item in a DoD contract; or through a separate contract if the Director, SADBU, OUSD(AT&L), determines the unusual circumstances justify reimbursement using a separate contract. No other means for the reimbursement of the costs of developmental assistance provided under I-107(f)(1) and (7) are authorized under the Program.
(c) Assistance provided in the form of progress payments to SDB protege firms in excess of the customary progress payment rate for SDBs, will be reimbursed only if implemented in accordance with FAR 32.504(c).
(d) Assistance provided in the form of advance payments will be reimbursed only if the payments have been provided to a protege firm under subcontract terms and conditions similar to those in the clause at FAR 52.232.12, Advance Payments. Reimbursements of any advance payments will be made pursuant to the inclusion of the clause at FARS 252.232-7005, Reimbursement of Subcontractor Advance Payments—DoD Pilot Mentor-Protege Program, in appropriate contracts. In requesting reimbursement, the mentor firm agrees that the risk of any financial loss due to the failure or inability of a protege firm to repay any unliquidated advance payments will be the sole responsibility of the mentor firm.
(e) No other forms of developmental assistance are authorized for reimbursement under the Program.
(f) The total amount reimbursed to a mentor firm for costs of assistance furnished to a protege firm in a fiscal year may not exceed $1,000,000 unless the Director, SADBU, OUSD(AT&L), determines in writing that unusual circumstances justify reimbursement at a higher amount. Request for authority to reimburse in excess of $1,000,000 must detail the unusual circumstances and must be endorsed and submitted by the program manager and the cognizant Director, SADBU.
(a) Developmental assistance costs incurred by a mentor firm for providing assistance to a protege firm pursuant to an approved mentor-protege agreement, that have not been reimbursed through a separate contract, cooperative agreement, or other agreement entered into between DoD and the mentor firm, or through a separately priced contract line item added to a DoD contract, may be credited as if it were a subcontract award for determining the performance of the mentor firm in attaining an SDB subcontracting goal established under any contract containing a subcontracting plan pursuant to the clause at FAR 52.219-9, Small Business Subcontracting Plan.
(b) For crediting purposes only, costs that have been reimbursed through inclusion in indirect expense pools may also be credited as subcontract awards for determining the performance of the mentor firm in attaining an SDB subcontracting goal established under any contract containing a subcontracting plan pursuant to the clause at FAR 52.219-9. However, costs that have not Start Printed Page 6560been reimbursed because they are not reasonable, allocable, or allowable under I-108(b), will not be recognized for crediting purposes. (c) Other costs that are not eligible for reimbursement pursuant to I-108(a) may be recognized for credit only if requested, identified, and incorporated in an approved mentor-protege agreement.
(e) A mentor firm may receive credit toward the attainment of an SDB subcontracting goal for each subcontract awarded for a product or a service by the mentor firm to an entity that qualifies as a protege firm pursuant to I-104(a). With respect to a former SDB protege firm(s), a mentor may take credit for awards to such concern(s) that, except for its size would be a small business concern owned and controlled by socially and economically disadvantaged individuals, but only if—
(1) The size of such business concern is not more than two time the appropriate size standard;
(3) The credit is taken not later than October 1, 2005.
(f) Amounts credited toward the SDB goal(s) for unreimbursed costs under the Program must be separately identified from the amounts credited toward the goal resulting from the award of actual subcontracts to protege firms. The combination of the two must equal the mentor firm's overall accomplishment toward the SDB goal(s).
(g) Adjustments may be made to the amount of credit claimed under paragraphs (a) and (b) of this section if the Director, SADBU, OUSD(AT&L), determines that—
(1) A mentor firm's performance in the attainment of its SDB subcontracting goals through actual subcontract awards declined from the prior fiscal year without justifiable cause; and
(h) The mentor firm must be afforded the opportunity to explain the decline in SDB participation before imposition of any such limitation on credit. In making the final decision to impose a limitation on credit, the Director, SADBU, OUSD (AT&L), must consider—
(1) The mentor firm's overall SDB participation rates (in terms of percentages of subcontract awards and dollars awarded) as compared to the participation rates existing during the 2 fiscal years prior to the firm's admission to the Program;
(i) The decision of the Director, SADBU, OUSD (AT&L), regarding the imposition of a limitation on credit will be final.
(j) Any prospective limitation on credit imposed by the Director, SADBU, OUSD (AT&L), must be expressed as a percentage of otherwise eligible credit, will apply beginning on a specific date in the future, and will continue until a date certain during the current fiscal year.
(k) Any retroactive limitation on credit imposed by the Director, SADBU, OUSD (AT&L), must reflect the actual costs incurred for developmental assistance (not exceeding the maximum amount reimbursed).
(l) For purposes of calculating any incentives to be paid to be a mentor firm for exceeding an SDB subcontracting goal pursuant to the clause at FAR 52.219-26, Small Disadvantaged Business Participation Program—Incentive Subcontracting, incentives will be paid only if an SDB subcontracting goal has been exceeded as a result of actual subcontract awards to SDBs (i.e., excluding credit under paragraphs (a), (b), and (c) of this section).
(m) Developmental assistance costs that are incurred pursuant to an approved mentor-protege agreement, and have been charged to, but not reimbursed through, a separate contract, cooperative agreement, or other agreement entered into between DoD and the mentor firm, or through a separately priced contract line item added to a DoD contract, will not be otherwise reimbursed, as either a direct or indirect cost, under any other DoD contract, irrespective of whether the costs have been recognized for credit against SDB subcontracting goals.
(a) Mentor firms must report on the progress made under active mentor-protege agreements semiannually for the periods ending March 31st and September 30th. The September 30th report must address the entire fiscal year. Reports are due 30 days after the close of each reporting period. The report must include—
(1) Data on performance under the mentor-protege agreement, including dollars obligated, expenditures, credit taken under the Program, SDB subcontract awards under DoD contracts, developmental assistance provided, impact of the agreement, and progress of the agreement (A recommended format and guidance for this submission are available via the Internet at http://www.acq.osd.mil/​sadbu/​mentor_​protege);​ and
(2) A copy of the SF 294, Subcontracting Report for Individual Contracts, for each contract where developmental assistance was credited, with a statement in Block 15 identifying—
(i) The amount of dollars credited to the SDB subcontract goal as a result of developmental assistance provided to protege firms under the Program; and
(3) In addition to the reporting requirements of paragraph (a)(1) of this section, for commercial companies and companies participating in the DoD Test Program for Negotiation of Comprehensive Small Business Subcontracting Plans, indicate in Block 15 of the SF 295—
(i) The total dollars credited to the SDB goal as a result of developmental assistances provided to a protege firm(s) under the Program; and
(b) The protege firm must report on progress made under the mentor-protege agreement annually by October 31st. The protege firm must concur with or rebut its mentor's report that covers the period ending September 30th and must provide data on the firm's employment, annual revenue, and annual participation in DoD contracts. The report is required annually during the protege firm's Program participation term and for 2 fiscal years after the expiration of the Program participation term.
(c) Progress reports must be submitted as follows:Start Printed Page 6561
(1) For agreements that provide credit toward SDB subcontracting goals for costs incurred under the Program, to the Director, SADBU, OUSD (AT&L), and the Defense Contract Management Command (DCMC) administrative contracting officer.
(2) For agreements that provide for reimbursement of costs incurred under the Program, to the Director, SADBU, OUSD (AT&L), the contracting officer, the DCMC administrative contracting officer, the program office, and the cognizant Director, SADBU.
The Defense Contract Management Command will conduct annual performance reviews of the progress and accomplishments realized under approved mentor-protege agreements. These reviews must verify data provided on the semiannual reports and must provide information as to—
(a) Whether all costs reimbursed to the mentor firm under the agreement were reasonably incurred to furnish assistance to the protege firm in accordance with the mentor-protege agreement and applicable regulations and procedures;
(b) Whether the mentor firm and protege firm accurately reported progress made by the protege firm in employment, revenues, and participation in DoD contracts during the Program participation term and for 2 fiscal years following the expiration of the agreement; and
[FR Doc. 00-2946 Filed 2-9-00; 8:45 am]