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Protégé subcontract revenues from mentor hold no basis for economic dependence

October 4, 2019 By Andrew Smith

An important benefit of a mentor-protégé agreement (MPA) is that no determination of affiliation may be found between a protégé and its mentor solely because of assistance provided under the agreement.  A recent decision of the Small Business Administration (SBA) Office of Hearings and Appeals (OHA), Avar Consulting, Inc., upheld a size determination which found that a protégé was not affiliated with its SBA-approved mentor through economic dependence, even though the revenues it received from the mentor constituted over 70% of the revenues it received between formation and the date of size self-certification.  A small business government contractor that anticipates future affiliation with a business under the 70% economic dependence rule should consider entering into an SBA-approved small business MPA with that business to prevent future revenues it receives from the business from being considered when economic dependence is assessed.

Continue reading at:  Piliero Mazza

Filed Under: Contracting Tips Tagged With: affiliation, All Small Mentor-Protégé, mentor-protege

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