This will not all evaporate if the project manager leaves at the end of the contract. To this end, the project manager can impart significant institutional knowledge and assistance, both in terms of performing the contract and more generally for the protégé’s operations, while the project manager is an employee of the protégé. Therefore, the protégé has to plan for the end of the mentoring by maximizing the time while that relationship exists. At most, the protégé can have a six-year mentoring term with one mentor. The new mentor-protégé program does not permit open-ended mentoring relationships. There was no reason to make a distinction and prevent that hiring from the mentor.Īdditionally, we disagree with SBA’s conclusion that the protégé’s business development would be diminished if the project manager leaves at the end of the contract. In the new rule, SBA recognized the importance of giving protégés the flexibility to hire a project manager from outside its workforce.
Again, this would be true whether the personnel came from the mentor or another previous employer. Moreover, many contract workforces follow the contract, so if the protégé does not retain the contract it would expect to lose its project manager and perhaps other personnel. What SBA overlooks here is that these concerns would be present any time the protégé goes outside its existing workforce to hire the project manager the concerns are not unique to hiring from the mentor. If that happens, in SBA’s eyes, the business development of the protégé firm would be diminished. SBA believes the new rule is necessary because it is concerned that the project manager could easily go back to the mentor at the end of the contract because project manager has no previous ties to the protégé and is not bound to stay with the protégé after performance of the contract. This undercuts a key aspect of the mentoring relationship and makes the mentor-protégé joint venture harder to form than it should be. But SBA’s new rule will force small businesses to forgo the mentor as a source of a new hire for the project manager position. Indeed, assisting with personnel in this manner is often precisely the type of mentoring envisioned under the mentor-protégé relationship. When a protégé needs to hire a project manager, the mentor is an excellent resource. If SBA had sought public comment on this new requirement, the small business community (as well as large business mentors) surely would have voiced strong objections. As a result, this rule was not the product of proper notice and comment rulemaking and should not be implemented, at least not before the public has an opportunity to weigh in.
SBA did not previously propose this significant change and, therefore, the public was not given an opportunity to comment on it. This was not a clarification of existing rules, however. SBA then added a further “clarification” in the final rule to prohibit the protégé from hiring the project manager from its mentor. SBA helpfully clarified that the protégé does not need to employ the project manager at the time of proposal submission, as long as the protégé has a letter of commitment from the individual to confirm he or she will become an employee of the protégé and serve as project manager by the time of contract award. The new rules state that the project manager must be an employee of the protégé by the time of contract performance. SBA’s rules require the joint venture to have a project manager that is responsible for performance of the contract. One of the problematic provisions will adversely effect how many small businesses form joint ventures with their mentors.Ī primary benefit of the mentor-protégé relationship is the ability of the mentor and protégé to form joint ventures. However, buried in the lengthy rulemaking are a few provisions that will be problematic for small businesses when the rules go into effect on August 24, 2016. Many aspects of the new rule are very exciting and should be beneficial for the small business community at large. On July 25, 2016, SBA released its long-awaited final rule creating the new mentor-protégé program for all small businesses.
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