OIG Report: SBA’s Administration of All Small Mentor-Protégé Program Falling ShortThe Small Business Administration (SBA) Office of Inspector General (OIG) recently issued a public report on the SBA’s All Small Mentor-Protégé Program (ASMPP), in which the SBA OIG found certain shortcomings in the SBA’s administration of the program. As discussed below, the report also provides a series of recommendations, most of which the SBA has accepted.

What is the ASMPP?

The SBA began accepting applications for the ASMPP in 2016 and has seen a surge in applications each subsequent year. Under the ASMPP, any small business – including 8(a) small businesses, Historically Underutilized Business Zone small businesses, veteran-owned and service-disabled veteran-owned small businesses, woman-owned and economically disadvantaged woman-owned small businesses – may enter into an agreement with a large business under which the large business will provide mentorship and assistance. In return, the large and small businesses are permitted to joint venture to perform federal small business set-aside contracts.

What did SBA OIG review?

According to the report, the SBA OIG’s “objectives were to determine whether the SBA implemented effective controls to ensure it conducted initial application reviews and annual evaluations in accordance with the [ASMPP] regulations and it measured success.” In order to “answer [these] objectives,” the SBA OIG “met with SBA officials to gain an understanding of the program structure and processes, and their perspectives on the challenges to the implementation of the program.” Further, the SBA OIG “selected and reviewed 12 mentor-protégé applications submitted from the inception of the program through August 1, 2018.”

What did SBA OIG find?

The report found that the SBA “did not implement effective controls to ensure it conducted initial application reviews and annual evaluations to fully align with program regulations.” In addition, the report found that the “SBA did not fully adhere to established processes or ensure it appropriately documented assessments.” Moreover, the report found that, “while SBA identified program performance indicators and a process to measure results, it did not effectively monitor and evaluate the results.” As such, the report found, the “SBA’s program may not be developing small businesses as it intended and unqualified businesses, including large businesses, may improperly benefit from the program.”

What did SBA OIG recommend?

Based on its findings, SBA OIG recommended that the SBA:

  1. Align its application and annual evaluation processes with program regulations;
  2. Take steps to adequately measure program success;
  3. Prioritize staff resources; and
  4. Improve the implementation of its program processes.

What was SBA’s response to the report?

In response to the report, “SBA management agreed with three recommendations but did not agree with one recommendation.” As a result, the SBA “plans to issue final standard operating procedures for the [ASMPP] that include steps to ensure that mentors are qualified to participate in the program.” Additionally, the SBA “will ensure that the standard operating procedures include steps on documenting completion of the application annual review processes.” Further, the SBA reports that it is “taking steps to fulfill functional requirements” for the ASMPP. The SBA, however, “did not reach resolution on recommendation 3” (i.e., prioritize staff resources).

Wait, I have more questions!

If you have any questions about this noteworthy development or any related issues, please do not hesitate to contact Aron Beezley or Eric Frechtel.