E9-17584. Acquisition Regulations in Fiscal Year 2009

AGENCY:

Department of Health and Human Services (HHS).

ACTION:

Notice.

SUMMARY:

The Department of Health and Human Services (HHS) is interested in encouraging HHS prime contractors to assist small businesses, small disadvantaged businesses, HUBZone businesses, veteran-owned businesses, service-disabled veteran-owned businesses, and woman-owned businesses, in enhancing their capabilities to perform contracts and subcontracts for HHS and other Federal agencies. The program seeks to provide a Mentor-Protégé Program that assists qualified small businesses to receive development assistance from HHS prime contractors in order to increase the base of small business eligible to perform HHS contracts and subcontracts.

DATES:

The Department of Health and Human Services (HHS) is proposing to amend its acquisition regulations in Fiscal Year 2009. Due dates for written comments on the proposed rulemaking will be published at that time. The intent of this notice is to publicize the HHS' proposed mentor-protégé program, specific solicitation and contract guidance will be included in the proposed rulemaking.

To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on August 24, 2009.

ADDRESSES:

In commenting, please refer to the HHS Mentor-Protégé Program. You may submit comments in one of four ways (please choose only one of the ways listed):

1. By facsimile (FAX) transmission. You may submit FAX comments on this notice to [phone].

2. Electronically. You may submit electronic comments on this notice to [e-mail].

3. By express or overnight mail. You may send written comments to the following address ONLY: Department of Health and Human Services, Office of Small and Disadvantaged Business Utilization, 200 Independence Ave, SW., Hubert H. Humphrey Building, Room 360G, Washington, DC 20201.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

4. By regular mail. You may send written comments to the following address only: Department of Health and Human Services, Office of Small and Disadvantaged Business Utilization, 200 Independence Ave, SW., Hubert H. Humphrey Building, Room 360G, Washington, DC 20201. Please allow sufficient time for mailed comments to be received before the close of the comment period.

FOR FURTHER INFORMATION CONTACT:

Nelia K. Holder, Office of Small and Disadvantaged Business Utilization, telephone [phone], e-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

On September 15, 2008, the Office of Small and Disadvantaged Business Utilization (OSDBU) commissioned an assessment of existing Mentor-Protégé programs and the feasibility of such a program for HHS. The assessment concluded that opportunities exist in such programs to actually encourage meaningful and successful business development between Mentors and Protégés. Mentor-Protégé arrangements represent opportunities for creating access for small business, small disadvantaged business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, and woman-owned small business to HHS contracts and awards. The OSDBU believes that Mentor-Protégé programs will afford small and disadvantaged business opportunities to develop their capacity and competencies. Review and analysis of existing Mentor-Protégé programs in the public sector conclude that they are effective against the problems related to small business and minority sub-contracting.

This program is similar to those established by other federal agencies such as the Department of Homeland Security and Department of Treasury. An assessment of best practices in Mentor-Protégé programs identified certain clear benefits for all parties involved. A successful Program may enable HHS to receive a lower price offer from less expensive Mentor-Protégé teams. HHS acknowledges that a structured Mentor-Protégé program provides an opportunity for dual benefits where small and disadvantaged businesses are developed to become prime contractors and technically capable sub-contractors. More importantly, the Program provides a degree of confidence to Program Officers that the Mentor firm stands behind the work of the Protégé firm. Therefore, risks associated with the performance of the small and disadvantaged businesses are mitigated.

Dated: July 17, 2009.

Debbie Ridgely,

Director, OSDBU, ASAM/OS.

1.0 The HHS Mentor-Protégé Program

1.1 Scope

The HHS mentor-protégé program is designed to motivate and encourage large business prime contractor firms to provide mutually beneficial developmental assistance to small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and woman-owned small business concerns. The program is also designed to improve the performance of HHS contracts and subcontracts, foster the establishment of long-term business relationships between HHS large prime contractors and small business subcontractors, and strengthen subcontracting opportunities and accomplishments at HHS.

1.2 Definitions

(a) MENTOR, as used in the Mentor-Protégé Program, means a large business concern that demonstrates the commitment and capability to assist in the development of a small business protégé.

(b) PROTÉGÉ, as used in the Mentor-Protégé Program, means a small business concern that is independently owned and operated, not dominant in its field, and meets federal size standards in its primary NAICS code. This includes small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and woman-owned small business concerns.

1.3 Non-Affiliation

For the purpose of qualifying as a small business as defined in Section 1.2, a protégé firm may not be considered an affiliate of a mentor firm solely on the basis that the protégé firm is receiving developmental assistance from the mentor firm under this program.

1.4 General Policy

(a) Eligible large businesses (not included on the “Debarred” list) approved as mentor firms will enter into agreements with eligible entities as defined in Section 1.2 as protégés. Mentors will provide appropriate developmental assistance to enhance the capabilities of protégés to perform as prime contractors and/or subcontractors.

(b) Mentor-Protégé activity will be available to any type of contract deemed appropriate by HHS when the requirement for a subcontracting plan is anticipated.

1.5 Incentives for Mentor Participation

(a) Mentors may receive additional evaluation points (for Mentor-Protégé Program participation) toward the award of contracts during the evaluation of competitive offers.

(b) Mentors may receive credit toward attaining subcontracting goals contained in the HHS subcontracting plan(s) for Mentor-Protégé participation on a dollar by dollar basis by counting protégé developmental assistance costs in their various small business subcontracting categories, as appropriate, in addition to traditional subcontracts.

(c) Mentors will be eligible for an annual non-monetary award presented to the mentor firm providing the most effective developmental support to a protégé at the conclusion of the 36-month Mentor-Protégé Agreement. The OSDBU, in consultation with senior HHS management, will solicit nominations from participating mentors and determine the award winner.

1.6 Measurement of Program Success

The overall success of the HHS Mentor-Protégé program, encompassing all participating mentors and protégés will be measured by the extent to which it results in:

(a) An increase in the quality of the technical capabilities of the protégé firm.

(b) An increase in the number and dollar value of contract and subcontract awards to protégé firms since the time of their entry into the program attributable to the mentor-protégé relationship (under HHS contracts, contracts awarded by other Federal agencies and under commercial contracts).

1.7 Mentor Firms

(a) Large firms eligible for receipt of federal contracts may apply.

(b) Mentors will be encouraged to identify and select:

(1) A broad base of small business firms whose core competencies support the HHS mission; and

(2) Protégés in addition to firms with whom they have established business relationships.

(c) Mentors may have multiple protégés. Mentors participating in the Mentor-Protégé programs in addition to the HHS program should maintain a system for preparing separate reports of mentoring activity for each agency's program.

1.8 Protégé Firms

(a) For selection as a protégé, a firm must be:

(1) Eligible as defined in Section 1.2 and

(2) Eligible for receipt of government contracts.

(b) A protégé firm may declare to a mentor firm that it meets the requirements set forth in paragraph (a) of this section. Mentor firms may rely in good faith on written business declarations consistent with the guidance cited in FAR 52.219-1 by potential protégés as evidence of eligibility to participate.

(c) The protégé may not have more than one mentor at a time. However, protégés participating in Mentor-Protégé programs in addition to the HHS program should maintain a system for preparing separate reports of mentoring activity for each agency's program.

1.9 Selection of Protégé Firms

(a) Mentor firms will be solely responsible for selecting protégé firms. The mentor is encouraged to identify and select the types of protégé firms listed in Section 1.8.

(b) The selection of protégé firms by mentor firms may not be protested, except as in paragraph (c) of this section.

(c) Any dispute regarding the size or eligibility status of an entity selected by a mentor to be a protégé shall be referred to the HHS OSDBU for referral to SBA for resolution.

1.10 Application and Agreement Process for Mentor-Protégé Teams To Participate in the Program

(a) Firms interested in becoming approved mentor-protégé participants must submit a joint written HHS Mentor-Protégé Agreement to the OSDBU for review and approval. The Mentor-Protégé Agreement will be evaluated on the extent to which the mentor firm plans to provide developmental assistance. The information required in Section 1.10 (b) may be submitted electronically or in hard copy to be considered for approval of the Mentor-Protégé Agreement.

(b) The Mentor-Protégé Agreement must contain:

(1) Name and address of mentor and protégé firm and a point of contact within both firms who will oversee the agreement;

(2) A statement from the protégé representing that the firm is currently eligible as a small business to participate in the Mentor-Protégé program;

(3) A description of the type of developmental program that will be provided by the mentor firm to the protégé firm, to include a description of the subcontract work;

(4) A schedule with milestones for providing assistance;

(5) Criteria for evaluation of the protégé's developmental success to measure the effectiveness of the capabilities and how the mentor's assistance will potentially increase contracting and subcontracting opportunities for the protégé firm;

(6) An estimate of the total cost provided to the protégé by the mentor;

(7) Program participation term of 36 months with a mid-term review at the 18 month interval;

(8) A listing of the anticipated number and types of subcontracts to be awarded to the protégé firm;

(9) Termination procedures including procedures for the mentor firm to notify the protégé firm, OSDBU, and the contracting officer, in writing, at least 30 days in advance of the mentor firm's intent to voluntarily withdraw from the program; and the procedures for a protégé firm to notify the mentor firm in writing at least 30 days in advance of the protégé firm's intent to voluntarily terminate the Mentor-Protégé Agreement;

(10) Plan for accomplishing work should the agreement be terminated;

(11) Other terms and conditions as appropriate;

(12) Signed agreement with signatures and dates.

1.11 HHS Review and Approval of Mentor-Protégé Application and Agreement

(a) The information specified in Section 1.10 is reviewed by the HHS OSDBU. This review will be completed no later than 45 days after receipt by the OSDBU, and written approval of the Mentor-Protégé Agreement will be provided to each party.

(b) Upon agreement approval, the mentor may implement the development assistance program.

(c) If the application is disapproved, the mentor-protégé team may provide additional information for reconsideration. The review of any supplemental material will be completed within 30 days after receipt by the OSDBU.

1.12 Developmental Assistance

The forms of developmental assistance a mentor firm can provide to a protégé firm include:

(a) Management guidance related to—

(1) Financial management

(2) Organizational management

(3) Overall business management/planning

(4) Business development

(b) Technical assistance

(c) Rent-free use of facilities and/or equipment

(d) Temporary assignment of personnel to the protégé firm for the purpose of training

(e) Property

(f) Loans

(g) Any other types of mutually beneficial assistance.

1.13 Obligation

(a) Mentor or protégé firms may voluntarily withdraw from the program as mutually agreed to by both the mentor and protégé firms. However, in no event shall such withdrawal impact the program mission and contract requirements under the prime contract.

(b) Mentor and protégé firms shall submit a “lessons learned” evaluation to the HHS OSDBU at the conclusion of their effort.

1.14 Internal Controls

The HHS OSDBU, in conjunction with the HHS small business specialists, will manage the program. Internal controls will be established by the HHS OSDBU to achieve the stated program objectives (by serving as checks and balances against undesired actions or consequences) such as:

(a) Reviewing and evaluating mentor applications for realism, validity, and accuracy of information provided;

(b) Conducting a mid-term evaluation at an 18-month interval (out of a 36-month agreement) to measure protégé progress against the developmental plan contained in the approved agreement; and

(c) Site visits, as appropriate, where Mentor-Protégé activity is on-going.

1.15 Reports

A written progress report shall be submitted by the mentor-protégé team to the HHS OSDBU at the mid-term (18 months) of the 36-month Mentor-Protégé Agreement.

1.16 Program Review

(a) At the conclusion of the mid-term 18-month period of the Mentor-Protégé Program (out of a 36-month agreement), the mentor/large prime contractor and protégé/small business shall formally brief the HHS OSDBU regarding program accomplishments as pertains to the approved agreement.

(b) Mentor and protégé firms shall submit a “lessons-learned” evaluation to the HHS OSDBU at the conclusion of their effort.