This means that the SBA cannot find that a small business Protégé is affiliated with its Mentor. VET-255 (April 6, 2016), OHA explains that the SBA regulations provide that a Mentor-Protégé joint venture is exempt from the doctrine of affiliation. The reason for this view is because the SBA regulations state that a Mentor-Protégé joint venture may bid for “any Federal government prime or subcontract.” In a recent case, however, the SBA’s Office of Hearings and Appeals (OHA) says this language has limited application. These differences in the regulations notwithstanding, conventional wisdom has been that a Mentor-Protégé joint venture is eligible to bid on any type of set-aside contract, including a SDVOSB set-aside contract. An 8(a) member of a Mentor-Protégé joint venture need only perform 40% of the work performed by the joint venture accordingly, an 8(a) member of a Mentor-Protégé joint venture only needs to receive 40% of the profits of the joint venture. Also, for unpopulated Mentor-Protégé joint ventures, the SBA regulations provide that the profits should be allocated to the members of the joint venture commensurate with the work performed by each member. Although Mentors need not be “other than small,” most Mentor companies are large businesses. These requirements are different from those applicable to 8(a) Mentor-Protégé joint ventures. Small Business Administration (SBA) regulations require a joint venture intending to bid on a Service-Disabled Veteran-Owned Small Business (SDVOSB) set-aside contract to satisfy certain requirements, the most important of which is that all members to the joint venture be “small.” The joint venture also must provide that the service-disabled veteran (SDV) receive 51% of the profits of the joint venture.
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