Representing small businesses on matters relating to government contracting, Matthew Schoonover shares his insights about the mentor-protege program and the joint venture agreement.
BACKGROUND
Matthew Schoonover is an experienced attorney who worked in the industry for more than 10 years with institutions like Snell & Wilmer and UnitedLex professional services.
Currently, he is a partner at Koprince Law LLC, a boutique law firm in Kansas, that works exclusively with federal government contractors. As part of his practice, Schoonover counsels government contractors on issues with the government as well as represent them in bid protests and claims.
He is also a frequent contributor of SmallGovCon, a blog managed by Koprince Law to provide legal news and notes for small business contractors.
MENTOR-PROTEGE PROGRAM
Schoonover states that this is a business development program open to all small businesses of any socioeconomic designation, including those who are part of the 8(a).
This program works when a bigger business or a mentor agrees to help a small business develop their business, enhance their capabilities, and become more competitive.
On the side of the mentors, they will also gain an exemption to affiliation for the items of assistance and they can take up to a 40% equity stake.
Also, if they agree to enter into a joint venture agreement, the Small Business Administration will only consider the protege side for determining the size of the joint venture. This is a huge benefit for both parties because ordinarily a joint venture has to be between two small businesses.
“The government has experienced working with some of the larger companies already. They trust them, they know them, they know that they have the ability to get the projects completed. So, teaming up with these people would improve your reputation as a small business as well.”
However, in order for this program to be effective, small businesses should work with a mentor who really understands their business. They should mainly be able to understand the goal of the program.
“I think generally the relationships are stronger when the parties know each other, if they’re both committed to helping the protege grow. And if part of that can be a joint venture for a job, that’s awesome.”
Because of this, you should find a mentor that is within your industry. This can be people or businesses that you have worked with in the past and even your competitors.
Also, you can consider talking to your local SBA office or to your local Procurement Technical Assistance Centers as they will surely help you in finding a prospective mentor.
“So I really encourage folks to, you know, sit back and think about… what are some companies that I look up to or then I admire and do I have any contacts there or know of anybody who might be able to introduce me to start that discussion? And it really should frankly be a discussion between the mentor and the protege.”
JOINT VENTURE AGREEMENT
Schoonover defines a joint venture where two businesses come together to form a third separate legal entity in order to bid and perform a job. Because of this, the old SBA rule wherein the sizes are combined no longer apply.
In most cases, this agreement only applies to two small businesses but if you are under the mentor-protege program, this also applies to you.
However, one of the companies, which should be under any SBA program, has to be the managing venture that provides the different requirements under the FDA’s regulations. They also need to follow the different approval requirements depending on the socioeconomic status of the joint venture.
“The parties need to make sure that they’re meeting the knows.”
Apart from that, there is also the 3-in-2 rule wherein it says that a joint venture cannot be awarded more than three contracts within the two year period.
RESOURCES
If you want to watch the full video of the interview with Matthew Schoonover as he shares his insights about the mentor-protege program and the joint venture agreement, then be sure to click the link down below.
006: Matthew Schoonover – Joint Venture and Mentor Protégé Guru
https://govcongiants1.wpengine.com/podcast/matthew-schoonover-joint-venture-and-mentor-protege-guru/
https://www.youtube.com/watch?v=df9jBqAT3Xc&list=PL6-jBNNcc98vTBvNhFYfUTeH0k-Vx2VBH&index=16