Tag Archives: Teaming

Mentor-Protégé Agreements: Benefits for Big and Small

Image: istock


Mentors and protégés each uniquely benefit from the All Small Mentor Protégé Program.

Not only does it allow mentors to pursue small business set-asides through joint venture agreements, but mentors can also evaluate acquisition targets, develop their employees, and gain insight on industry innovations.


“During the last three fiscal years, the Defense Department awarded more than $77 billion to small businesses through set-asides under programs generally managed by the Small Business Administration. Consequently, large businesses are precluded from competing for these contracts.

But the SBA’s All Small Mentor Protégé Program offers opportunities for large businesses to mentor small businesses where the two entities may pursue these set-aside contracts together. The intent of the program is to encourage large businesses to work with small businesses to increase and expand the small firms’ capabilities. In doing so, the large businesses may compete for this pool of previously inaccessible contracts.

While contract awards are the most sought-after prize, the program offers many other benefits for both mentor and protégé.

The regulatory purpose of the program is to “enhance the capabilities of protégé firms” and improve their “ability to successfully compete for federal contracts.” That being said, a recent SBA report also recognized that the program is intended to benefit both mentors and protégés. This same report indicated that as of April 2019 there were 759 active mentor-protégé agreements.

The real benefit of this program comes from the mentor and protégé being able to enter a joint venture and compete for federal small business set-aside contracts without being found affiliated. While eligibility for these set-aside contracts usually requires a company to be small under SBA’s size standards, one exception to this rule is when two firms are “approved by SBA to be a mentor and protégé,” according to the rule.

Qualification for this exception requires SBA’s approval of the proposed mentor-protégé agreement. Once the agreement is approved, the mentor and protégé may form joint ventures to pursue small business opportunities without worrying about the size of the mentor. Equally beneficial is that the agreement itself is not the basis to find affiliation between the mentor and protégé, as that would undermine the purpose of the program.

As one can deduce, mentors are usually large businesses and protégés are usually small businesses. While mentors can also be small businesses, the regulatory context infers that mentors are primarily large firms. As with most government programs, however, it is not so simple as mentors being large and protégés being small.

Each mentor must satisfy four SBA-mandated requirements. First, a mentor must be “capable of carrying out its responsibilities to assist the protégé firm under the proposed mentor-protégé agreement.” Second, mentors must possess good character. Third, the mentor must not be on the federal list of debarred or suspended contractors. Finally, the mentor must be able to “impart value to a protégé firm due to lessons learned and practical experience gained or through its knowledge of general business operations and government contracting,” the regulations state.

While not a prerequisite, it is worth noting that SBA regulations generally require that mentors have no more than one protégé at a time. There is not an outright ban on multiple protégés. Instead, SBA has capped the number of protégés one mentor can have at the same time to three to limit any negative impact one mentor-protégé relationship may have on another.

Protégés, meanwhile, must qualify as small under its primary North American Industry Classification System code. If the protégé is looking to expand into a second code, it must identify this code as one where it is seeking business development assistance. This is not, however, carte blanche approval to enter into a new market as “SBA will not approve a mentor-protégé relationship in a secondary code in which the firm has no prior experience,” the rules state.

As with mentors, protégés are also restricted in the number of mentors allowed at one time. While the general cap is for one mentor at a time, SBA may approve a second so long as the additional mentor will provide unique forms of assistance. The agency places a lifetime cap of two mentors for each protégé.

Even if a company qualifies as a mentor or protégé, why would it want to enter a mentor-protégé agreement? More specifically, with the program “designed to enhance the capabilities of protégé firms” why would a mentor want to participate? There are four distinct benefits derived from a mentor-protégé agreement.

Money is likely the most obvious reason for mentors to participate in the program. The Defense Department set aside more than $77 billion in small business contracts in the last three fiscal years. That is $77 billion that large businesses have no way of touching — unless they are part of a mentor-protégé agreement. And that is just defense. SBA’s agency-specific prime contract goals for the 2019 fiscal year ranged from 11.65 percent to 71 percent of total procurement dollars going to small businesses.

The mentor-protégé agreement is just the first step, however. To further protect small businesses, the SBA only allows the mentor to compete for set-aside contracts through a joint venture with its protégé. Each joint venture agreement must contain provisions stating that the small business owns at least 51 percent of the joint venture entity.

Additionally, profits of the joint venture must be commensurate to the work performed. Equally important, “the small business partner . . . must perform at least 40 percent of the work performed by the joint venture.” While this precludes the large business from reaping all the profit, it can still be on the receiving end of a significant portion of any set-aside contract value.

Money aside, there are several other benefits that may come with being a mentor. First, mentors gain a valuable opportunity to directly engage with possible acquisition targets.

SBA regulations allow mentors to obtain up to a 40 percent equity interest in the protégé firm. Even if a mentor does not make this investment up front, there is nothing precluding investments occurring a year or more into the mentor-protégé agreement. During that time, mentor employees may gain valuable information from working side-by-side with the protégé. This knowledge not only facilitates other due diligence efforts, but it could also help smooth any post-acquisition transitions.

Second, the mentor-protégé arrangement allows dedicated professional development opportunities for mentor employees. The program regulations identify the following as areas of mentor-provided assistance: technical and/or management assistance; financial assistance; trade education; business development; and general administrative assistance. These are just the overarching categories; with a wide range of assistance opportunities within each category.

The Roman philosopher Seneca is often attributed with the translated phrase: “While we teach, we learn.” Each of the identified assistance categories provide opportunities for a rising star in an organization to teach the protégé, and therefore learn. Whether it is an engineer ready to cut their teeth on managing a project, an accountant looking for practical experience before their next exam, or a localized trade expert looking to become a regional or international expert, the opportunities for professional growth are myriad in a mentor-protégé relationship.

Third, mentors can stimulate internal growth or ideas through the insights of a protégé. Startups traditionally thrive by bringing new and innovative products or services to a market. As a mentor, a company will gain first-hand knowledge and access of the protégé’s innovative products and services. Not only does this help a company gauge the pulse of new business activity, but it also fosters internal growth and development through interactions with these innovative products and services.

The benefits to a protégé are often, but not always, the flip side of the mentor benefits. Where a mentor invests, a protégé gets cash infusions. Where a mentor offers training, the protégé’s knowledge base increases. Where a mentor sees what new ideas a protégé brings to the industry, the protégé gains immeasurable insight that comes from the challenges and experiences of the mentor’s own path to success. But these are not the only benefits.

Many protégés do not have in-depth corporate policies, procedures or systems. One form of mentor assistance is drafting, compiling or providing corporate documents such as record retention policies, annual review forms or proposal templates. Mentors can also provide guidance on procedures or systems best suited for the protégé. What should an internal audit process look like? What system should be used to adequately document and track contract deadlines? Each of these, and others, are areas where the mentor’s experience will help a protégé avoid some of the traditional growing pains of a small business.

Protégés, like many small businesses, experience the conundrum of needing financial resources but not having the experience, history, credit, or any other prerequisite to access those resources. Mentors can help alleviate many of these concerns. For example, a mentor’s contracting history may help an otherwise unqualified protégé obtain higher bonding limits. A mentor’s financial history may also help mentors receive more favorable credit limits or lending terms. Not only does the mentor’s presence provide immediate assistance to the protégé, but it also helps the protégé establish a trend line demonstrating its capability of handling larger financial responsibilities.

Even with a mentor’s systems and financial backing, a protégé will not get very far if cannot win a contract. Here, mentors can provide lessons learned as well as best practices for pursuing contract opportunities. Whether through participation in industry days, responding to a sources sought notice, or changing the content, format or method of proposal submission, mentors can impart significant wisdom on the protégé. As with other forms of assistance, this help will benefit the protégé for quite some time.

Many protégés view business development as the biggest obstacle to success. Mentors, by regulatory definition, have found a way to conquer this challenge. Whether it is entering a new region, breaking into a new market, or becoming familiar with government contracting, the mentors have valuable knowledge they can pass on to the protégés. As with each other area of assistance, the scope of business development training should be customized to the protégé’s needs.

Hundreds of mentors have already benefited from the program. Protégés may gain access to a mentor’s policies, programs, personnel and financial resources, plus increase their experience in contract proposals and business development.

Most importantly, mentors and protégé’s can embrace their inner Rod Tidwell and shout for the agencies to “show me the money!” 


Forming Strategic Company Alliances

Image: “MIT Sloan Management Review


Teaming with other companies is a productive venue. Synergism is paramount in teaming with any size company, whether in a lead or subcontracting role. 

There should be technical, management and market segment similarities between you and any company with whom you are considering teaming.


“Your prospective team member ideally will not be a direct competitor; rather a business in a related field with whom you share a mutual need for each other’s contributions in pursuing large-scale projects.

Relationships must be developed with primes and other small businesses that can help you, team with you and keep you in mind as they search for success.

That takes time, patience and open-minded, out of the box thinking. It also takes more than a Non-Disclosure Agreement (NDA), a teaming agreement (TA) and a proposal to succeed.

It takes dynamic marketing and communication with strong partners and hard, innovative work. Nice buzz words you say – but it is the truth and you have to find what that truth means to you.

Very few companies survive and grow these days without industry teaming and collaborative relationships.”


Building Defense Partnerships To Take Advantage Of Recent Acquisition Changes

Image: SciencMag.org


“Congress spent the last several years making Defense acquisition friendlier toward smaller and nontraditional companies.

Now one congressman is bringing together industry, academia and the Defense Department to better take advantage of the new process.”


“The Maryland Defense and Aerospace Consortium held its first meeting last Tuesday, and Rep. Anthony Brown (D-Md.) hopes it will instill greater partnership between companies, DoD, universities and even kindergarten classes.

“Much of the innovation takes place in small- and medium-sized firms, and when those firms can partner with larger companies then we are going to get to the warfighter the equipment, the systems, the information and the technology they need at a much quicker pace,” Brown told Federal News Network. “We’ve done a lot on Capitol Hill to try to streamline acquisition, and now it’s really about promoting partnerships so industry can partner and work with DoD to deliver a quality product to the warfighter.”

That means more than just getting companies and DoD together on products. It means keeping the workforce pipeline full of smart, technically-minded people, cultivating small businesses so they can work with the government and thrive and putting industry and colleges together to share ideas.

Brown’s consortium aims to do all of that, especially within Maryland. The consortium’s inaugural meeting hosted representatives from DoD, Lockheed Martin, Northrup Grumman, the Association of Career and Technical Education, the Aerospace Industries Association, the University of Maryland and more. The meeting was also attended by Army Undersecretary Ryan McCarthy.

“The purpose of the consortium is threefold,” Brown said. “One is to create networking opportunities between firms and to strengthen the partnership between the aerospace and defense industry and academia. University of Maryland, College Park is our flagship program; it’s got a strong engineering program. There are a number of fellowships and internships between industry and the university and we’d like to strength those and expand those.”

The second tenet of the consortium is to build best practices. Brown plans to start seminars so large companies can teach smaller firms how to protect themselves from cyber attacks, how to keep supply chains clear to do business with the government and how to hire the best people.

The first seminar will cover data security.

“The larger companies are well resourced to address that challenge with a little more ease. They have some resiliency built into their systems. With small firms it’s a lot more challenging because of their limited resources,” Brown said. “We are also planning this year to have a seminar on specific action items that industry participants can take to partner with schools. Maybe you have an employee that is willing to coach a robotics club or maybe we will pull together a consortium of small, medium or large firms to create a teachers academy to support teachers that are delivering STEM education in our schools.”

The third area Brown hopes to address is connecting industry with K-12 schools.

“There are many middle schools in my district and on a career day in school there isn’t a single STEM professional who shows up,” Brown said.

The need for partnership

DoD started putting a larger emphasis on collaboration and partnerships with industry under former Defense Secretary Ash Carter’s leadership.

After realizing DoD had been focusing on the Middle East while near-peer competitors were starting to reemerge, Carter created hubs like the Defense Innovation Unit to bring in new ideas to keep the U.S. military’s technological edge.

At the same time, Congress changed some of the acquisition regulations that were keeping nontraditional companies from doing business with DoD. The hope was to harness their brain power and use it.

While the rules are changing, small- and medium-sized companies and companies that don’t traditionally work with DoD are still on the outside looking in when it comes to contracting with the government.

DoD is pushing for outreach mechanisms like Brown’s to build more relationships with nontraditional defense companies that are innovating quickly.

Another worry involves the limited talent pool from which DoD and defense companies have to draw from, something Brown called a national security issue.

“Whether you’re talking about cyber defense or the eligibility to join the armed forces, we all know that more work needs to be done to deliver the education, the experience, the training to this potential workforce whether they are going into the military or industry,” Brown said.”

How Enforceable Are Teaming Agreements?


Courtroom And Gavel


“Experienced government contractors know that teaming agreements are often a critical component of the procurement process. But ensuring the enforceability of such agreements can be complicated  …..

The CGI Federal case confirms that potential subcontractors should negotiate the material subcontract terms with the teaming agreement, and minimize any conditions to a subcontract.”

“In 2012, CGI signed a teaming agreement with FCi to jointly prepare a proposal for a State Department contract for which FCi would act as the prime contractor and CGI as the subcontractor. FCi retained exclusive rights to finalize the proposal and negotiate any resulting prime contract with the government.

The teaming agreement said CGI “will receive” a 45 percent workshare of the awarded total contract value, but the “commitment may not be exactly 45 percent each year.” It required the parties to enter into “good faith negotiations” for a subcontract after prime contract award. If the parties could not mutually agree on a subcontract within 90 days, the teaming agreement would expire.

The companies worked together on the proposal. The government identified weaknesses in it and invited a revised version. CGI agreed to help FCi with the revisions if FCi committed to give CGI a 41 percent workshare and 10 management positions on the resulting project.

The parties signed an amended teaming agreement with those new terms, but the other terms of the original teaming agreement did not change. With CGI’s help, FCi prepared a revised proposal to the government.

The government awarded the prime contract to FCi, but a competing bidder filed a series of protests. FCi resolved the last protest by giving the competitor and its affiliates part of the workshare and, without CGI’s knowledge, submitted a second revised proposal to the government reflecting a reduced CGI workshare. The government then awarded FCi a prime contract with a potential value of $145 million.

The two companies began negotiations for a subcontract, with FCi offering only a 22 percent workshare. They never agreed on a final subcontract, and FCi terminated the relationship.
CGI sued FCi in Fairfax County, Virginia, circuit court, alleging breach of the amended teaming agreement, unjust enrichment and fraudulent inducement. A jury awarded CGI $3.5 million for breach of contract, and $8.5 million for lost profits from fraudulent inducement, but the trial judge set aside both awards and granted summary judgment for FCi on the unjust enrichment claim.

CGI appealed to the Virginia Supreme Court, but it rejected CGI’s breach of contract claim, holding there was no enforceable agreement for a subcontract. Rather, the parties had expressly conditioned the formation of a subcontract on future events and good faith negotiations. There was an enforceable agreement to negotiate in good faith, but CGI never contended that FCi failed to negotiate a subcontract in good faith. CGI therefore could not prevail on its breach claim.

The court then held CGI could not recover lost profits for fraudulent inducement — the only damages sought for that claim — because the lost profit calculation was speculative. The company’s calculation was premised on the workshare that the parties never incorporated into a subcontract.

“CGI cannot recover profits based on a bargain for a subcontract it never struck,” the court said.

The court also rejected CGI’s alternative claim for unjust enrichment, noting that the company could have elected to rescind the amended teaming agreement because of the fraud, but instead affirmed the contract and sued for damages. A plaintiff cannot seek unjust enrichment in Virginia when there is an enforceable express contract covering the subject matter.

The parties’ mutual promises to prepare the proposals and to negotiate a subcontract in good faith were enforceable agreements, so CGI could not seek unjust enrichment.

The terms of the CGI-FCi teaming agreement, as reported by the court, are rather typical. For example, it is common for two contractors to mutually agree to jointly prepare a proposal, to outline a post-award work scope and workshare, and to agree that, upon award, they will negotiate a subcontract “in good faith.” As the CGI Federal case shows, those common terms can form a nearly impenetrable web of barriers to a successful subcontractor claim.

It was well-established before this case that an “agreement to agree” is unenforceable, at least under Virginia law. While the jury found that FCi misled CGI, the latter’s decision to affirm the amended teaming agreement foreclosed CGI’s right to obtain a monetary award for fraud or unjust enrichment.

The CGI-FCi amended teaming agreement identified several conditions to a subcontract and acknowledged that even the 41 percent workshare was not set in stone. Because CGI did not, or could not, negotiate more definitive terms or a remedy (such as liquidated damages) if FCi did not award a subcontract to CGI, CGI had to trust that good faith negotiations after award would result in an acceptable subcontract.

Potential subcontractors should be mindful of these potential traps as they negotiate teaming agreements.”



Make Your Teaming Strategy Central to Your Capture Process


handshake-partnership“WASHINGTON TECHNOLOGY”

“Small and large businesses in the government contracting market can dramatically increase the value of these partnerships by making teaming a critical dimension of their existing capture and business strategy work.

Questions of teaming and joint venturing should occupy a prominent role in almost all business development discussions. Such dedicated thought will lead to a competitive advantage in a market where questions of teaming and partnering are often neglected.

The questions thrown about the conference rooms and offices of government contractors around the Beltway and across the country are the same: What’s our proposal strategy? Our pricing strategy? What’s our staffing plan?

These are the critical questions that small and large contractors should be asking themselves before the solicitation is even issued. Thinking about these questions before the solicitation is issued is the hallmark of effective capture and increases the company’s probability of winning the work.

But there’s one question that receives far too little attention given its complexity and centrality to business strategy for those in the government contracting market:

What’s our teaming strategy?

Putting together a compelling proposal at the right price point with the best staff is an important part of the recipe of winning–and successfully executing–government work. But there are professionals who have mastered these activities–proposal writing, pricing-to-win analysis, and human capital management.

There are great networkers out there, too, and any business development professional worth his or her salt will be an extraordinary networker. But the current system of contractor teaming–the method by which prime and subcontractors connect, bid, and execute work–is broken and ripe for innovation.

The current system is an inefficient way of finding teaming partners because the volume of businesses who contract with the U.S.Government is so large. Even the best professional network will leave valuable partnerships on the table, simply because they don’t know what’s out there. It is limited by individual professional networks, the databases of in-house business development shops, the ability to repurpose existing partnerships, and—in times of severe desperation—Google searches.

As Washington Technology Editor Nick Wakeman noted, the recent Washington Technology Insider Report report concluded that while contractor teaming will remain an important part of the competitive landscape, prime and subcontractor relationships are frequently plagued by a lack of transparency and mistrust.

Having worked for two Fortune 500 government contractors, I have seen first-hand the tremendous value that great contractor teams can provide to their government customers and the taxpayer. I have also seen the dysfunction, poor contract execution, and reputational damage caused by bad contractor teams. In these instances, the teaming agreement was more akin to an 11th hour, “arranged marriage” than a strategic business relationship based on capabilities, trust, and mutual benefit.

Frequently, business development dollars are squandered pursuing partnerships that are simply not a good fit, resulting in too many “arranged marriages” based on desperation instead of sound business strategy. Even if the contractor team wins the contract, the results of the poor fit are likely to manifest themselves during contract delivery and execution. But the long-term consequences are even more significant and can include reputational damage to the brand and loss of future revenue.

Fortunately, we’re at a point technologically where we can use data to help companies form better partnerships. Teaming 2.0 is the future of contractor teaming in the government contracting market. Using targeted, data-driven searches is the next logical evolution in business-to-business networking and connecting prime and subcontractors. You can read more in this white paper here.”


For further detail from “Small to Feds”  on the nuances of the industry teaming process please see the following articles:



The Defense Health Agency – A Huge Opportunity for IT Systems Contractors, Large and Small





“First and foremost is the upcoming rip and replace of its legacy electronic health record systems. This will be a 10-year IDIQ worth $11 billion.

Teams composed of Cerner/Accenture/Leidos, Allscripts/HP/CSC and IBM/Epic Systems have all announced their intention to bid for the contact, which will likely be awarded next spring and begin deploying in December 2015. The winning team will need a lot of help as requirements will involve a wide range of technologies especially identity management, security, visualization, and analytics. All signs point to DHA directly managing this effort after the contract is awarded.

Another initiative and one unbeknownst to many is DHA’s upcoming efforts to consolidate its internal infrastructure to improve health related information sharing and management.

A major aspect of this plan will be a standardized desktop that will deliver and sustain a common baseline across the Military Health System for both traditional and virtual desktops. The non-standard, decentralized desktop environment is hard to manage, expensive, less secure and inflexible, causing a negative impact on health care providers’ ability to do their jobs. This standardization will focus on release management, software licensing, hardware, data storage, and refresh strategies.

DHA will also consolidate its local and wide area networks to connect users to local and enterprise applications, network peripherals, network drives, and the internet/intranet under a single security architecture.

Almost one year ago the Defense Department completed the biggest overhaul of its sprawling military health system ever, highlighted by the creation of the Defense Health Agency.

While the military departments still have their respective medical commands, DHA brings together under one roof functions such as health IT. The massive reorganization comes after eight previously failed attempts to unify the sprawling defense health complex spanning over 1,200 locations and 10 million beneficiaries.

As DHA nears its first anniversary, all indications point to an agency slowly coming into its own. That’s because DOD didn’t stop at changing the organization charts and legacy responsibilities. Some of the biggest health IT projects the military has ever seen are taking place over the next few years and DHA is in the middle of what’s happening.

So where will these investments be?

These and other initiatives point to a standardized approach for regionally storing data and delivering applications and services in close proximity to the point of care or need. DHA’s goals efforts point to the core of the DOD medical’s inability to effectively share information, manage, and deliver standard business and clinical capabilities to providers throughout the Military Health System.

Improving availability and timeliness will save lives.


The last 18 months have not been kind. The debacle over the integrated VA-DOD electronic health record effort and the more recent, but more troubling, delays within VA’s system have put military health in an unfavorable light.

DHA has a mandate to, where applicable and possible, use technology to improve the timeliness, access, and quality of health. Also, with healthcare costs amounting to about 10 percent of DOD’s half a trillion dollar budget, the current rate of spending is unsustainable. Consequently, DHA leaders have been charged to find savings wherever possible.

It’s also important to know that DHA buys IT for the military health system. That is, not just DOD-wide systems and applications, but it is also chartered to address the needs of the service medical commands of which there are three: the Navy’s Bureau of Medicine and Surgery, Army Medical Department, and the Air Force Medical Service.

Finding success within military health requires understanding the unique needs within each service environment. For example, some sailors will receive approximately 70 percent of their primary care onboard ships and there are significant bandwidth and mobility issues for soldiers deployed in remote locations.

Complicating the job of DHA are the multiple existing networks which not only result in redundant operations and maintenance but often constrain access to systems and information. DHA needs help. Industry has a once in a lifetime opportunity to help shape the future of military medicine.

It’s sounds like a cliche to say that technology saves lives. In this case, it’s true! What resonates with DOD health leaders when it comes to technical solutions? How do you synch your message with what DHA and all military health entities want and need? Here are some recommendations:

  • Focus on strategic IT infrastructure initiatives that support improved clinical care
  • Identify consolidation and rationalization opportunities
  • Recognize cost savings for critical infrastructure initiatives
  • Goal is to have clinical locations across the globe possess the same IT functionality
  • Understand that data must be aligned to national standards
  • Come armed with ways to improve infrastructure and performance monitoring
  • Increase access to interoperability tools”