An 8(a) mentor-protégé agreement, which expired one year after its approval by the SBA, did not protect the 8(a) protégé and its mentor from affiliation–and meant that their 8(a) mentor-protégé joint venture was an ineligible large business.
A recent size appeal decision of the SBA Office of Hearings and Appeals is a cautionary tale for 8(a) protégé and their mentors, and highlights the importance of securing timely SBA reauthorization of 8(a) mentor-protégé agreements.
OHA’s decision in Size Appeal of North Star Magnus Pacific Joint Venture, SBA No. SIZ-5715 (2016) involved a joint venture between North Star Construction and Engineering, an 8(a) program participant, and North Star’s mentor, Magnus Pacific Corp.
On July 5, 2014, the SBA approved a mentor-protégé agreement between North Star and Magnus Pacific. The mentor-protégé agreement stated that the initial period of the agreement was one year. North Star, the protégé, was required to request continuance of the mentor-protégé agreement within 60 days prior to its expiration. The SBA’s letter approving the mentor-protégé agreement similarly stated, “[t]his agreement shall expire after one year, unless SBA approves an extension.” The letter reiterated that North Star was to request an extension within 60 days prior to expiration.
Keep reading this article at: http://smallgovcon.com/sbaohadecisions/expired-8a-mentor-protege-agreement-sinks-jvs-eligibility/