July 2022: Getting the Job Done with Teaming, Joint Ventures, and Mentor-Protégé Relationships
Do you ever worry that your business does not have the means of independently completing a prospective contract? The government does not expect that each of their contracts will be fulfilled by one business alone. Relationships and taking advantage of each other’s strengths are encouraged in federal contracting. There are three significant categories of contracting relationships: teaming agreements, joint ventures, and the Mentor-Protégé Program. There are important differences between each, so that we will discuss all three.
First, an example of a teaming agreement is one established by the US General Services Administration (GSA) that allows contactors to complement each other instead of competing for the contract. If a company is otherwise unable to earn a contract independently, teaming may present an opportunity for participation in the given request. The hope is that the request will be fulfilled in totality as a result of collaboration between contractors who are all viewed as equal parties to the contract. These are widespread partnerships in the world of procurement. All team members must have a GSA Schedule contract in this agreement since this is not a prime contractor/subcontractor arrangement.
A joint venture is two or more firms entering an agreement to pursue contracting opportunities over a set period. In this agreement, the joint venture is its own entity in SAM.gov with its own Commercial and Government Entity (CAGE) and Unique Entity Identifier (UEI) code. When small businesses create a joint venture, these joint ventures may not only qualify for small business set asides but also for contracts set aside for service-disabled veteran-owned, women-owned, or HUBZone businesses. A joint venture consisting of small businesses can form a joint venture with a large business as a mentor, which leads us to the Mentor-Protégé program.
The Mentor-Protégé Program (MPP), established by the US Small Business Administration (SBA), enables small businesses to receive technical assistance from a larger contracting firm directly. The goal of the MPP is not to turn the protégé into a carbon copy of its mentor but rather to teach the protégé how to navigate the federal procurement environment. The mentor may offer guidance on business management systems, accounting standards, federal contracting, strategic planning, business development, and more. The large and small businesses remain their entities but with a relationship recognized by the SBA.
The main difference between joint ventures and Mentor-Protégé programs is that a joint venture is a legal entity with its own SAM registration. In contrast, the MPP is merely a relationship between large and small entities recognized by the SBA. Therefore, not all joint ventures are mentor-protégé relationships and vice versa. It’s apples and oranges.
These relationships should be chosen based on a business’s activity, past performance, capabilities, revenues, size, etc., so there is no one-size-fits-all when it comes to partnering in contracting. Just like becoming certified for a set aside doesn’t automatically guarantee success, you should focus on utilizing partnership opportunities to enhance your business activities. As they say, teamwork makes the dream work.
If you are unsure where to start or how to get organized, connect with the North Dakota Procurement Technical Assistance Center (ND PTAC). Our services are at no cost to businesses based in North Dakota. Register to schedule an appointment. Additionally, take advantage of the many other training opportunities and events listed on the ND PTAC website.
Not from North Dakota? Find your closest PTAC on the APTAC website, then click on your state.