[Federal Register Volume 69, Number 240 (Wednesday, December 15, 2004)]
[Rules and Regulations]
[Pages 74995-75000]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27351]
[[Page 74995]]
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DEPARTMENT OF DEFENSE
48 CFR Part 219 and Appendix I to Chapter 2
[DFARS Case 2003-D013]
Defense Federal Acquisition Regulation Supplement; DoD Pilot
Mentor-Prot[eacute]g[eacute] Program
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
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SUMMARY: DoD has issued a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to update policy pertaining
to the DoD Pilot Mentor-Prot[eacute]g[eacute] Program. The rule
authorizes the Director, Small and Disadvantaged Business Utilization,
of each military department and defense agency to approve mentor firms
and mentor-prot[eacute]g[eacute] agreements.
EFFECTIVE DATE: December 15, 2004.
FOR FURTHER INFORMATION CONTACT: Mr. Thaddeus Godlewski, Defense
Acquisition Regulations Council, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062
Defense Pentagon, Washington, DC 20301-3062. Telephone (703) 602-2022;
facsimile (703) 602-0350. Please cite DFARS Case 2003-D013.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule authorizes the Director, Small and Disadvantaged
Business Utilization (SADBU), of each military department and defense
agency to approve mentor firms and mentor-prot[eacute]g[eacute]
agreements under the DoD Pilot Mentor-Prot[eacute]g[eacute] Program.
The Director, Office of the Secretary of Defense, SADBU, will retain
policy and oversight responsibility for the offices participating in
the Program and will remain the principal budget authority for the
Program. This rule also updates procedures for implementation of the
Mentor-Prot[eacute]g[eacute] Program.
DoD published a proposed rule at 69 FR 26533 on May 13, 2004. Two
respondents submitted comments on the proposed rule. One respondent
expressed support for the rule. The other respondent recommended
amendment of the rule to allow service-disabled veteran-owned small
business concerns to participate as prot[eacute]g[eacute] firms.
Statutory authority permitting participation of service-disabled
veteran-owned small business concerns as prot[eacute]g[eacute] firms
was provided in Section 842 of the National Defense Authorization Act
for Fiscal Year 2005 (Public Law 108-375) on October 28, 2004. DoD will
be implementing the new authority provided by Section 842 separately
under DFARS Case 2004-D028. Therefore, DoD has adopted the proposed
rule published on May 13, 2004, as a final rule without change.
This rule was not subject to Office of Management and Budget review
under Executive Order 12866, dated September 30, 1993.
B. Regulatory Flexibility Act
DoD certifies that this final rule will not 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 the changes in the rule relate primarily to administrative
aspects of the DoD Pilot Mentor-Prot[eacute]g[eacute] Program. The
basic principles of the Program have not changed.
C. Paperwork Reduction Act
The information collection requirements of the DoD Pilot Mentor
Prot[eacute]g[eacute] Program have been approved by the Office of
Management and Budget under Control Number 0704-0332 for use through
May 31, 2007.
List of Subjects in 48 CFR Part 219
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
0
Therefore, 48 CFR part 219 and appendix I to chapter 2 are amended as
follows:
0
1. The authority citation for 48 CFR part 219 and appendix I to
subchapter I continues to read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 219--SMALL BUSINESS PROGRAMS
0
2. Section 219.7100 is amended by revising the first sentence to read
as follows:
219.7100 Scope.
This subpart implements the Pilot Mentor-Prot[eacute]g[eacute]
Program (hereafter referred to as the ``Program'') established under
Section 831 of the National Defense Authorization Act for Fiscal Year
1991 (Public Law 101-510; 10 U.S.C. 2302 note). * * *
0
3. Section 219.7102 is amended by revising paragraphs (a) and (d) to
read as follows:
219.7102 General.
* * * * *
(a) Mentor firms that are prime contractors with at least one
active subcontracting plan negotiated under FAR Subpart 19.7 or under
the DoD Comprehensive Subcontracting Test Program.
* * * * *
(d) Incentives that DoD may provide to mentor firms, including--
(1) Reimbursement for developmental assistance costs through--
(i) A separately priced contract line item on a DoD contract; or
(ii) A separate contract, upon written determination by the
cognizant Component Director, Small and Disadvantaged Business
Utilization (SADBU), that unusual circumstances justify reimbursement
using a separate contract; or
(2) Credit toward applicable subcontracting goals, established
under a subcontracting plan negotiated under FAR Subpart 19.7 or under
the DoD Comprehensive Subcontracting Test Program, for developmental
assistance costs that are not reimbursed.
0
4. Section 219.7103-1 is revised to read as follows:
219.7103-1 General.
The procedures for application, acceptance, and participation in
the Program are in Appendix I, Policy and Procedures for the DoD Pilot
Mentor-Prot[eacute]g[eacute] Program. The Director, SADBU, of each
military department or defense agency has the authority to approve
contractors as mentor firms, approve mentor-prot[eacute]g[eacute]
agreements, and forward approved mentor-prot[eacute]g[eacute]
agreements to the contracting officer when funding is available.
0
5. Section 219.7103-2 is amended as follows:
0
a. By revising paragraphs (d), (e), and (f); and
0
b. In paragraph (h), in the parenthetical, by removing ``I-112'' and
adding in its place ``I-113''. The revised text reads as follows:
219.7103-2 Contracting officer responsibilities.
* * * * *
(d) Modify applicable contract(s) to establish a contract line item
for reimbursement of developmental assistance costs if--
(1) A DoD program manager or the cognizant Component Director,
SADBU, has made funds available for that purpose; and
(2) The contractor has an approved mentor-prot[eacute]g[eacute]
agreement.
(e) Negotiate and award a separate contract for reimbursement of
developmental assistance costs only if--
(1) Funds are available for that purpose;
(2) The contractor has an approved mentor-prot[eacute]g[eacute]
agreement; and
(3) The cognizant Component Director, SADBU, has made a
[[Page 74996]]
determination in accordance with 219.7102(d)(1)(ii).
(f) Not authorize reimbursement for costs of assistance furnished
to a prot[eacute]g[eacute] firm in excess of $1,000,000 in a fiscal
year unless a written determination from the cognizant Component
Director, SADBU, is obtained.
* * * * *
219.7105 [Amended]
0
6. Section 219.7105 is amended by removing ``I-111'' and adding in its
place ``I-112''.
219.7106 [Amended]
0
7. Section 219.7106 is amended in the first sentence by removing ``I-
112'' and adding in its place ``I-113''.
0
8. Appendix I to Chapter 2 is revised to read as follows:
Appendix I--Policy and Procedures for the DOD Pilot Mentor-Protege
Program
I-100 Purpose.
(a) This Appendix I to 48 CFR Chapter 2 implements the Pilot
Mentor-Prot[eacute]g[eacute] Program (hereafter referred to as the
``Program'') established under Section 831 of Public Law 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 prot[eacute]g[eacute]
firms in enhancing their capabilities to satisfy DoD and other
contract and subcontract requirements;
(2) Increase the overall participation of prot[eacute]g[eacute]
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 prot[eacute]g[eacute] firms and such contractors.
(b) Under the Program, eligible companies approved as mentor
firms will enter into mentor-prot[eacute]g[eacute] agreements with
eligible prot[eacute]g[eacute] firms to provide appropriate
developmental assistance to enhance the capabilities of the
prot[eacute]g[eacute] firms to perform as subcontractors and
suppliers. DoD may provide the mentor firm with either cost
reimbursement or credit against applicable subcontracting goals
established under contracts with DoD or other Federal agencies.
(c) DoD will measure the overall success of the Program by the
extent to which the Program results in--
(1) An increase in the dollar value of contract and subcontract
awards to prot[eacute]g[eacute] 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;
(2) An increase in the number and dollar value of subcontracts
awarded to a prot[eacute]g[eacute] firm (or former
prot[eacute]g[eacute] firm) by its mentor firm (or former mentor
firm);
(3) An increase in the employment level of prot[eacute]g[eacute]
firms from the date of entry into the Program until 2 years after
the completion of the agreement.
(d) This policy sets forth the procedures for participation in
the Program applicable to companies that are interested in
receiving--
(1) Reimbursement through a separate contract line item in a DoD
contract or a separate contract with DoD; or
(2) Credit toward applicable subcontracting goals for costs
incurred under the Program.
I-101 Definitions.
I-101.1 Historically Black college or university.
An institution determined by the Secretary of Education to meet
the requirements of 34 CFR 608.2. The term also means any nonprofit
research institution that was an integral part of such a college or
university before November 14, 1986.
I-101.2 Minority institution of higher education.
An institution of higher education with a student body that
reflects the composition specified in section 312(b)(3), (4), and
(5) of the Higher Education Act of 1965 (20 U.S.C. 1058(b)(3), (4),
and (5)).
I-101.3 Eligible entity employing the severely disabled.
A business entity operated on a for-profit or nonprofit basis
that--
(a) Uses rehabilitative engineering to provide employment
opportunities for severely disabled individuals and integrates
severely disabled individuals into its workforce;
(b) Employs severely disabled individuals at a rate that
averages not less than 20 percent of its total workforce;
(c) Employs each severely disabled individual in its workforce
generally on the basis of 40 hours per week; and
(d) Pays not less than the minimum wage prescribed pursuant to
section 6 of the Fair Labor Standards Act (29 U.S.C. 206) to those
employees who are severely disabled individuals.
I-101.4 Severely disabled individual.
An individual who has a physical or mental disability which
constitutes a substantial handicap to employment and which, in
accordance with criteria prescribed by the Committee for the
Purchase from the Blind and Other Severely Handicapped established
by the first section of the Act of June 25, 1938 (41 U.S.C. 46;
popularly known as the ``Javits-Wagner-O'Day Act'') is of such a
nature that the individual is otherwise prevented from engaging in
normal competitive employment.
I-101.5 Small disadvantaged business (SDB).
A small business concern that is--
(a) An SDB concern as defined at 219.001, paragraph (1) of the
definition of ``small disadvantaged business concern'';
(b) A business entity owned and controlled by an Indian tribe as
defined in Section 8(a)(13) of the Small Business Act (15 U.S.C.
637(a)(13)); or
(c) A business entity owned and controlled by a Native Hawaiian
Organization as defined in Section 8(a)(15) of the Small Business
Act.
I-101.6 Women-owned small business (WOSB).
A small business concern owned and controlled by women as
defined in Section 8(d)(3)(D) of the Small Business Act (15 U.S.C.
637(d)(3)(D)).
I-102 Participant eligibility.
(a) To be eligible to participate as a mentor, an entity must
be--
(1) An entity other than small business, unless a waiver to the
small business exception has been obtained from the Director, Small
and Disadvantaged Business Utilization (SADBU), OUSD (AT&L), that is
a prime contractor to DoD with an active subcontracting plan; or
(2) A graduated 8(a) firm that provides documentation of its
ability to serve as a mentor; and
(3) Approved to participate as a mentor in accordance with I-
105.
(b) To be eligible to participate as a prote[eacute]g[eacute],
an entity must be--
(1) An SDB, a WOSB, or an eligible entity employing the severely
disabled;
(2) Eligible for the award of Federal contracts; and
(3) A small business according to the Small Business
Administration (SBA) size standard for the North American Industry
Classification System (NAICS) code that represents the contemplated
supplies or services to be provided by the prot[eacute]g[eacute]
firm to the mentor firm if the firm is representing itself as a
qualifying entity under the definition at I-101.5(a) or I-101.6.
(c) Mentor firms may rely in good faith on a written
representation that the entity meets the requirements of paragraph
(a) of this section, except for a prot[eacute]g[eacute]'s status as
a small disadvantaged business concern (see FAR 19.703(b)).
(d) If at any time the SBA (or DoD in the case of entities
employing the severely disabled) determines that a
prot[eacute]g[eacute] is ineligible, assistance that the mentor firm
furnishes to the prot[eacute]g[eacute] after the date of the
determination may not be considered assistance furnished under the
Program.
(e) A company may not be approved for participation in the
Program as a mentor firm if, at the time of requesting participation
in the Program, it is currently debarred or suspended from
contracting with the Federal Government pursuant to FAR Subpart 9.4.
(f) If the mentor firm is suspended or debarred while performing
under an approved mentor-prot[eacute]g[eacute] agreement, the mentor
firm--
(1) May continue to provide assistance to its
prot[eacute]g[eacute] firms pursuant to approved mentor-
prot[eacute]g[eacute] agreements entered into prior to the
imposition of such suspension or debarment;
(2) May not be reimbursed or take credit for any costs of
providing developmental assistance to its prot[eacute]g[eacute]
firm, incurred more than 30 days after the imposition of such
suspension or debarment; and
[[Page 74997]]
(3) Must promptly give notice of its suspension or debarment to
its prot[eacute]g[eacute] firm and the cognizant Component Director,
SADBU.
I-103 Program duration.
(a) New mentor-prot[eacute]g[eacute] agreements may be submitted
and approved through September 30, 2005.
(b) Mentors incurring costs prior to September 30, 2008,
pursuant to an approved mentor-prot[eacute]g[eacute] agreement may
be eligible for--
(1) Credit toward the attainment of its applicable
subcontracting goals for unreimbursed costs incurred in providing
developmental assistance to its prot[eacute]g[eacute] firm(s);
(2) Reimbursement pursuant to the execution of a separately
priced contract line item added to a DoD contract; or
(3) Reimbursement pursuant to entering into a separate DoD
contract upon determination by the cognizant Component Director,
SADBU, that unusual circumstances justify using a separate contract.
I-104 Selection of prot[eacute]g[eacute] firms.
(a) Mentor firms will be solely responsible for selecting
prot[eacute]g[eacute] firms. Mentor firms are encouraged to identify
and select concerns that are defined as emerging SDB
prot[eacute]g[eacute] firms.
(b) The selection of prot[eacute]g[eacute] 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
prot[eacute]g[eacute] firm as defined in I-101.5, 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 part 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 prot[eacute]g[eacute] firm and its mentor firm on the
basis that the mentor firm has agreed to furnish (or has furnished)
to its prot[eacute]g[eacute] firm, pursuant to a mentor-
prot[eacute]g[eacute] agreement, any form of developmental
assistance described in I-107(f).
(e) A prot[eacute]g[eacute] firm may have only one active DoD
mentor-prot[eacute]g[eacute] agreement.
I-105 Mentor approval process.
(a) An entity seeking to participate as a mentor must apply to
the cognizant Component Director, SADBU, to establish its initial
eligibility as a mentor. This application may accompany its initial
mentor-prot[eacute]g[eacute] agreement.
(b) The application must provide the following information:
(1) A statement that the company is currently performing under
at least one active 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 or
a statement that the entity is a graduated 8(a) firm.
(2) A summary of the company's historical and recent activities
and accomplishments under its small and disadvantaged business
utilization program.
(3) 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.)
(4) 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.)
(5) The total dollar amount of subcontracts that the company
awarded under DoD contracts during the 2 preceding fiscal years.
(6) The total dollar amount of subcontracts that the company
awarded under all other Federal agency contracts during the 2
preceding fiscal years.
(7) The total dollar amount and percentage of subcontracts that
the company awarded to all SDB and WOSB 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.
(8) Information on the company's ability to provide
developmental assistance to eligible prot[eacute]g[eacute]s.
(c) A template of the mentor application is available at: http://www.acq.osd.mil/sadbu/mentor_protege.
(d) Companies that apply for participation and are not approved
will be provided the reasons and an opportunity to submit additional
information for reconsideration.
I-106 Development of mentor-prot[eacute]g[eacute] agreements.
(a) Prospective mentors and their prot[eacute]g[eacute]s may
choose to execute letters of intent prior to negotiation of mentor-
prot[eacute]g[eacute] agreements.
(b) The agreements should be structured after completion of a
preliminary assessment of the developmental needs of the
prot[eacute]g[eacute] firm and mutual agreement regarding the
developmental assistance to be provided to address those needs and
enhance the prot[eacute]g[eacute]'s ability to perform successfully
under contracts or subcontracts.
(c) A mentor firm may not require a prot[eacute]g[eacute] firm
to enter into a mentor-prot[eacute]g[eacute] 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.
(d) The mentor-prot[eacute]g[eacute] agreement may provide for
the mentor firm to furnish any or all of the following types of
developmental assistance:
(1) Assistance by mentor firm personnel in--
(i) General business management, including organizational
management, financial management, and personnel management,
marketing, business development, and overall business planning;
(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 prot[eacute]g[eacute] firm under the developmental program.
(2) Award of subcontracts under DoD contracts or other contracts
on a noncompetitive basis.
(3) Payment of progress payments for the performance of
subcontracts by a prot[eacute]g[eacute] 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
prot[eacute]g[eacute] firm for the performance of the subcontract.
Provision of progress payments by a mentor firm to a
prot[eacute]g[eacute] firm at a rate other than the customary rate
for the firm 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.
(5) Loans.
(6) Investment(s) in the prot[eacute]g[eacute] firm in exchange
for an ownership interest in the prot[eacute]g[eacute] firm, not to
exceed 10 percent of the total ownership interest. Investments may
include, but are not limited to, cash, stock, and contributions in
kind.
(7) Assistance that the mentor firm obtains for the
prot[eacute]g[eacute] firm from one or more of the following:
(i) Small Business Development Centers established pursuant to
Section 21 of the Small Business Act (15 U.S.C. 648).
(ii) Entities providing procurement technical assistance
pursuant to 10 U.S.C. Chapter 142 (Procurement Technical Assistance
Centers).
(iii) Historically Black colleges and universities.
(iv) Minority institutions of higher education.
(e) Pursuant to FAR 31.109, approved mentor firms seeking either
reimbursement or credit are strongly encouraged to enter into an
advance agreement with the contracting officer responsible for
determining final indirect cost rates under FAR 42.705. The purpose
of the advance agreement is to establish the accounting treatment of
the costs of the developmental assistance pursuant to the mentor-
prot[eacute]g[eacute] agreement prior to the incurring of any costs
by the mentor firm. An advance agreement is an attempt by both the
Government and the mentor firm to avoid possible subsequent dispute
based on questions related to reasonableness, allocability, or
allowability of the costs of developmental assistance under the
Program. Absent an advance agreement, mentor firms are advised to
establish the accounting treatment of such costs and to address the
need for any changes to their cost accounting practices that may
result from the implementation of a mentor-prot[eacute]g[eacute]
agreement, prior to incurring any costs, and irrespective of whether
costs will be reimbursed or credited.
(f) Developmental assistance provided under an approved mentor-
prot[eacute]g[eacute] 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. Costs
associated with the latter must be accumulated and charged in
accordance with the contractor's approved accounting practices; they
are not considered developmental assistance costs eligible for
either credit or reimbursement under the Program.
[[Page 74998]]
I-107 Elements of a mentor-prot[eacute]g[eacute] agreement.
Each mentor-prot[eacute]g[eacute] agreement will contain the
following elements:
(a) The name, address, e-mail address, and telephone number of the
mentor and prot[eacute]g[eacute] points of contact;
(b) The NAICS code(s) that represent the contemplated supplies or
services to be provided by the prot[eacute]g[eacute] firm to the mentor
firm and a statement that, at the time the agreement is submitted for
approval, the prot[eacute]g[eacute] firm, if an SDB or WOSB concern,
does not exceed the size standard for the appropriate NAICS code;
(c) A statement that the prot[eacute]g[eacute] firm is eligible to
participate in accordance with I-102(b);
(d) A statement that the mentor is eligible to participate in
accordance with I-102;
(e) A preliminary assessment of the developmental needs of the
prot[eacute]g[eacute] firm;
(f) A developmental program for the prot[eacute]g[eacute] firm
specifying the type of assistance the mentor will provide to the
prot[eacute]g[eacute] and how that assistance will--
(1) Increase the prot[eacute]g[eacute]'s ability to participate in
DoD, Federal, and/or commercial contracts and subcontracts; and
(2) Increase small business subcontracting opportunities in
industry categories where eligible prot[eacute]g[eacute]s or other
small business firms are not dominant in the company's vendor base;
(g) Factors to assess the prot[eacute]g[eacute] firm's
developmental progress under the Program, including specific milestones
for providing each element of the identified assistance;
(h) An estimate of the dollar value and type of subcontracts that
the mentor firm will award to the prot[eacute]g[eacute] firm, and the
period of time over which the subcontracts will be awarded;
(i) A statement from the prot[eacute]g[eacute] firm indicating its
commitment to comply with the requirements for reporting and for review
of the agreement during the duration of the agreement and for 2 years
thereafter;
(j) 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
cognizant Component Director, SADBU. The justification must detail the
unusual circumstances that warrant a term in excess of 3 years;
(k) Procedures for the mentor firm to notify the
prot[eacute]g[eacute] 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-
prot[eacute]g[eacute] 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-prot[eacute]g[eacute] agreement for cause;
(l) Procedures for the mentor firm to terminate the mentor-
prot[eacute]g[eacute] agreement for cause which provide that--
(1) The mentor firm must furnish the prot[eacute]g[eacute] firm a
written notice of the proposed termination, stating the specific
reasons for such action, at least 30 days in advance of the effective
date of such proposed termination;
(2) The prot[eacute]g[eacute] firm must have 30 days to respond to
such notice of proposed termination, and may rebut any findings
believed to be erroneous and offer a remedial program;
(3) Upon prompt consideration of the prot[eacute]g[eacute] firm's
response, the mentor firm must either withdraw the notice of proposed
termination and continue the prot[eacute]g[eacute] firm's
participation, or issue the notice of termination; and
(4) 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;
(m) Procedures for a prot[eacute]g[eacute] firm to notify the
mentor firm in writing at least 30 days in advance of the
prot[eacute]g[eacute] firm's intent to voluntarily terminate the
mentor-prot[eacute]g[eacute] agreement;
(n) Additional terms and conditions as may be agreed upon by both
parties; and
(o) Signatures and dates for both parties to the mentor-
prot[eacute]g[eacute] agreement.
I-108 Submission and approval of mentor-prot[eacute]g[eacute]
agreements.
(a) Upon solicitation or as determined by the cognizant DoD
component, mentors will submit--
(1) A mentor application pursuant to I-105, if the mentor has
not been previously approved to participate;
(2) A signed mentor-prot[eacute]g[eacute] agreement pursuant to
I-107;
(3) A statement as to whether the mentor is seeking credit or
reimbursement of costs incurred;
(4) The estimated cost of the technical assistance to be
provided, broken out per year;
(5) A justification if program participation term is greater
than 3 years (Term of agreements may not exceed 5 years); and
(6) For reimbursable agreements, a specific justification for
developmental costs in excess of $1,000,000 per year.
(b) When seeking reimbursement of costs, cognizant DoD
components may require additional information.
(c) The mentor-prot[eacute]g[eacute] agreement must be approved
by the cognizant Component Director, SADBU, prior to incurring costs
eligible for credit.
(d) The cognizant DoD component will execute a contract
modification or a separate contract, if justified pursuant to I-
103(b)(3), prior to the mentor's incurring costs eligible for
reimbursement.
(e) Credit agreements that are not associated with an existing
DoD program and/or component will be submitted for approval to
Director, SADBU, Defense Contract Management Agency (DCMA), via the
mentor's cognizant administrative contracting officer.
(f) A prospective mentor that has identified Program funds to be
made available from a DoD program manager must provide the
information in paragraph (a) of this section through the program
manager to the cognizant Component Director, SADBU, with a letter
signed by the program manager indicating the amount of funding that
has been identified for the developmental assistance program.
I-109 Reimbursable agreements.
The following program provisions apply to all reimbursable
mentor-prot[eacute]g[eacute] agreements:
(a) Assistance provided in the form of progress payments to a
prot[eacute]g[eacute] firm in excess of the customary progress
payment rate for the firm will be reimbursed only if implemented in
accordance with FAR 32.504(c).
(b) Assistance provided in the form of advance payments will be
reimbursed only if the payments have been provided to a
prot[eacute]g[eacute] firm under subcontract terms and conditions
similar to those in the clause at FAR 52.232-12, Advance Payments.
Reimbursement of any advance payments will be made pursuant to the
inclusion of the clause at DFARS 252.232-7005, Reimbursement of
Subcontractor Advance Payments--DoD Pilot Mentor-
Prot[eacute]g[eacute] 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
prot[eacute]g[eacute] firm to repay any unliquidated advance
payments will be the sole responsibility of the mentor firm.
(c) The primary forms of developmental assistance authorized for
reimbursement under the Program are identified in I-106(d). On a
case-by-case basis, Component Directors, SADBU, at their discretion,
may approve additional incidental expenses for reimbursement,
provided these expenses do not exceed 10 percent of the total
estimated cost of the agreement.
(d) The total amount reimbursed to a mentor firm for costs of
assistance furnished to a prot[eacute]g[eacute] firm in a fiscal
year may not exceed $1,000,000 unless the cognizant Component
Director, SADBU, 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 to the cognizant Component Director, SADBU.
(e) Developmental assistance costs that are incurred pursuant to
an approved reimbursable mentor-prot[eacute]g[eacute] agreement, and
have been charged to, but not reimbursed through, a separate
contract, or through a
[[Page 74999]]
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 applicable subcontracting goals.
I-110 Credit agreements.
I-110.1 Program provisions applicable to credit agreements.
(a) Developmental assistance costs incurred by a mentor firm for
providing assistance to a prot[eacute]g[eacute] firm pursuant to an
approved credit mentor-prot[eacute]g[eacute] agreement may be
credited as if the costs were incurred under a subcontract award to
that prot[eacute]g[eacute], for the purpose of determining the
performance of the mentor firm in attaining an applicable
subcontracting goal established under any contract containing a
subcontracting plan pursuant to the clause at FAR 52.219-9, Small
Business Subcontracting Plan, or the provisions of the DoD
Comprehensive Subcontracting Plan Test Program. Unreimbursed
developmental assistance costs incurred for a prot[eacute]g[eacute]
firm that is an eligible entity employing the severely disabled may
be credited toward the mentor firm's small disadvantaged business
subcontracting goal, even if the prot[eacute]g[eacute] firm is not a
small disadvantaged business concern.
(b) 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
applicable subcontracting goal established under any contract
containing a subcontracting plan. However, costs that have not been
reimbursed because they are not reasonable, allocable, or allowable
will not be recognized for crediting purposes.
(c) Other costs that are not eligible for reimbursement pursuant
to I-106(d) may be recognized for credit only if requested,
identified, and incorporated in an approved mentor-
prot[eacute]g[eacute] agreement.
(d) The amount of credit a mentor firm may receive for any such
unreimbursed developmental assistance costs must be equal to--
(1) Four times the total amount of such costs attributable to
assistance provided by small business development centers,
historically Black colleges and universities, minority institutions,
and procurement technical assistance centers.
(2) Three times the total amount of such costs attributable to
assistance furnished by the mentor's employees.
(3) Two times the total amount of other such costs incurred by
the mentor in carrying out the developmental assistance program.
I-110.2 Credit adjustments.
(a) Adjustments may be made to the amount of credit claimed if
the Director, SADBU, OUSD(AT&L), determines that--
(1) A mentor firm's performance in the attainment of its
subcontracting goals through actual subcontract awards declined from
the prior fiscal year without justifiable cause; and
(2) Imposition of such a limitation on credit appears to be
warranted to prevent abuse of this incentive for the mentor firm's
participation in the Program.
(b) The mentor firm must be afforded the opportunity to explain
the decline in small business subcontract awards 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 small business 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;
(2) The mentor firm's aggregate prime contract awards during the
prior 2 fiscal years and the total amount of subcontract awards
under such contracts; and
(3) Such other information the mentor firm may wish to submit.
(c) The decision of the Director, SADBU, OUSD(AT&L), regarding
the imposition of a limitation on credit will be final.
I-111 Agreement terminations.
(a) Mentors and/or prot[eacute]g[eacute]s must send a copy of
any termination notices to the cognizant Component Director, SADBU,
that approved the agreement, and the DCMA administrative contracting
officer responsible for conducting the annual review pursuant to I-
113.
(b) For reimbursable agreements, mentors must also send copies
of any termination to the program manager and to the contracting
officer.
(c) Termination of a mentor-prot[eacute]g[eacute] agreement will
not impair the obligations of the mentor firm to perform pursuant to
its contractual obligations under Government contracts and
subcontracts.
(d) Termination of all or part of the mentor-
prot[eacute]g[eacute] agreement will not impair the obligations of
the prot[eacute]g[eacute] firm to perform pursuant to its
contractual obligations under any contract awarded to the
prot[eacute]g[eacute] firm by the mentor firm.
(e) Mentors and prot[eacute]g[eacute]s will follow provisions of
the mentor-prot[eacute]g[eacute] agreement developed in compliance
with I-107(k) through (m).
I-112 Reporting requirements.
I-112.1 Reporting requirements applicable to SF294/SF295 reports.
(a) Amounts credited toward applicable subcontracting goal(s)
for unreimbursed costs under the Program must be separately
identified on the appropriate SF294/SF295 reports from the amounts
credited toward the goal(s) resulting from the award of actual
subcontracts to prot[eacute]g[eacute] firms. The combination of the
two must equal the mentor firm's overall accomplishment toward the
applicable goal(s).
(b) A mentor firm may receive credit toward the attainment of an
SDB subcontracting goal for each subcontract awarded by the mentor
firm to an entity that qualifies as a prot[eacute]g[eacute] firm
pursuant to I-101.3 or I-101.5.
(c) For purposes of calculating any incentives to be paid to 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).
I-112.2 Program specific reporting requirements.
(a) Mentors must report on the progress made under active
mentor-prot[eacute]g[eacute] agreements semiannually for the periods
ending March 31st and September 30th throughout the Program
participation term of the agreement. The September 30th report must
address the entire fiscal year.
(b) Reports are due 30 days after the close of each reporting
period.
(c) Each report must include the following data on performance
under the mentor-prot[eacute]g[eacute] agreement:
(1) Dollars obligated (for reimbursable agreements).
(2) Expenditures.
(3) Dollars credited, if any, toward applicable subcontracting
goals as a result of developmental assistance provided to the
prot[eacute]g[eacute] and a copy of the SF294 and/or SF295 for each
contract where developmental assistance was credited.
(4) The number and dollar value of subcontracts awarded to the
prot[eacute]g[eacute] firm.
(5) Description of developmental assistance provided, including
milestones achieved.
(6) Impact of the agreement in terms of capabilities enhanced,
certifications received, and/or technology transferred.
(d) A recommended reporting format and guidance for its
submission are available at: http://www.acq.osd.mil/sadbu/mentor_protege.
(e) The prot[eacute]g[eacute] must provide data, annually by
October 31st, on the progress made during the prior fiscal year by
the prot[eacute]g[eacute] in employment, revenues, and participation
in DoD contracts during--
(1) Each fiscal year of the Program participation term; and
(2) Each of the 2 fiscal years following the expiration of the
Program participation term.
(f) The prot[eacute]g[eacute] report required by paragraph (e)
of this section may be provided as part of the mentor report for the
period ending September 30th required by paragraph (a) of this
section.
(g) Progress reports must be submitted--
(1) For credit agreements, to the cognizant Component Director,
SADBU, that approved the agreement, and the mentor's cognizant DCMA
administrative contracting officer; and
(2) For reimbursable agreements, to the cognizant Component
Director, SADBU, the contracting officer, the DCMA administrative
contracting officer, and the program manager.
I-113 Performance reviews.
(a) DCMA will conduct annual performance reviews of the progress
and accomplishments realized under approved mentor-
prot[eacute]g[eacute] agreements. These reviews must verify data
provided on the semiannual reports and must provide information as
to--
[[Page 75000]]
(1) Whether all costs reimbursed to the mentor firm under the
agreement were reasonably incurred to furnish assistance to the
prot[eacute]g[eacute] in accordance with the mentor-
prot[eacute]g[eacute] agreement and applicable regulations and
procedures; and
(2) Whether the mentor and prot[eacute]g[eacute] accurately
reported progress made by the prot[eacute]g[eacute] in employment,
revenues, and participation in DoD contracts during the Program
participation term and for 2 fiscal years following the expiration
of the Program participation term.
(b) A checklist for annual performance reviews is available at
http://www.acq.osd.mil/sadbu/mentor_protege.
[FR Doc. 04-27351 Filed 12-14-04; 8:45 am]
BILLING CODE 5001-08-P