SBA Mentor-Protégé Joint Venture
Also known as: Mentor-protégé JV, MPP joint venture, all-small mentor-protégé
What you do here: As the protégé, JV with your approved mentor and prime the set-aside as the small partner
At a Glance
- Who it's for
- A small (often SDVOSB) protégé with an SBA-approved mentor
- What it does
- Lets a large mentor + small protégé bid a small-business/SDVOSB set-aside together
- Governing authority
- 13 CFR § 125.9 (mentor-protégé) with § 128.402 / § 125.8 JV rules
- Size / affiliation effect
- The approved MPP JV is exempt from affiliation — the mentor's size doesn't count
- Precondition
- SBA must approve the mentor-protégé agreement before you rely on the exemption
What It Is
The SBA Mentor-Protégé Program (13 CFR § 125.9) lets an experienced firm (the mentor, which may be large) provide business development assistance to a small business (the protégé). Its most powerful feature is the joint-venture exemption: once the SBA approves the mentor-protégé agreement, the mentor and protégé can form a joint venture that competes for and performs set-asides reserved for the protégé's size and status — and the JV is treated as small even though the mentor is large, because the approved relationship is exempt from affiliation. To use this for an SDVOSB set-aside, the protégé must be a certified SDVOSB, and the JV must still satisfy the SDVOSB joint-venture rules in 13 CFR § 128.402: the protégé (SDVOSB) is the managing venturer, owns at least 51%, provides the responsible manager, performs at least 40% of the JV's work, and receives at least 40% of the profits, and the JV as a whole meets the limitations on subcontracting. The affiliation exemption is what makes the arrangement special — but it does not relax the JV ownership, work, and profit rules.
When You Use It
- When an SDVOSB protégé needs a large partner's capacity, bonding, or past performance to win a bigger set-aside.
- When a small firm wants a formal, SBA-blessed path to grow through a specific larger mentor.
- When the protégé wants the affiliation exemption so the mentor's size doesn't disqualify the team.
- As a stronger alternative to a plain teaming agreement when the partner is large and would otherwise affiliate.
Key Features
| Feature | What It Means |
|---|---|
| Affiliation exemption | An SBA-approved mentor-protégé JV is not affiliated based on the relationship — the JV qualifies as small even though the mentor is large. |
| SBA approval first | The exemption only applies once the SBA has approved the mentor-protégé agreement; you cannot rely on it retroactively or informally. |
| Protégé still runs the JV | For an SDVOSB set-aside the protégé must be the SDVOSB managing venturer, own ≥51%, perform ≥40% of the JV's work, and receive ≥40% of profits — the § 128.402 rules still apply. |
| One mentor, limited protégés | A firm may generally be a protégé of one mentor at a time (with narrow exceptions), and mentors are limited in how many protégés they can have. |
| Real development, not just a JV | The mentor must actually provide the assistance in the approved agreement (management, technical, financial, contracting help) — the program isn't only a bidding vehicle. |
The SDVOSB Angle
The mentor-protégé JV is the single most powerful growth tool available to an SDVOSB, because it is the only clean way to team with a *large* firm on a set-aside without being affiliated out of eligibility. But the exemption is narrow: it protects you from affiliation, not from the joint-venture rules. The SDVOSB protégé still has to own 51%, manage the venture, perform 40% of the work, and take 40% of the profit — and the JV still has to meet the limitations on subcontracting. Get the mentor-protégé agreement approved by the SBA *before* you bid, and make the protégé's control and work share real, not paper.
How to Set It Up
- Apply to and get SBA approval of the mentor-protégé agreement before relying on the affiliation exemption.
- Confirm the protégé is a certified SDVOSB and small under the target NAICS size standard.
- Draft a JV agreement that meets 13 CFR § 128.402 — protégé as managing venturer, ≥51% ownership, ≥40% work and profit.
- Plan the work so the JV meets the limitations on subcontracting with the venturers measured together.
- Document the mentor's actual developmental assistance, not just the bidding arrangement.
Watch Out For
- No SBA-approved agreement means no affiliation exemption — an unapproved "mentor-protégé" JV can be affiliated and lose the award.
- The exemption doesn't waive the § 128.402 JV rules: the protégé must still control, own 51%, and perform 40% of the work.
- Letting the large mentor effectively run the JV invites a successful status or ostensible-subcontractor challenge.
- The relationship has duration and renewal limits — the JV isn't a permanent vehicle, and the protégé must eventually stand on its own.
Run the Numbers
Frequently Asked
How can a small business joint venture with a large company and still qualify as small?
Through the SBA Mentor-Protégé Program (13 CFR § 125.9). Once the SBA approves a mentor-protégé agreement, the small protégé and its (possibly large) mentor can form a joint venture that is exempt from affiliation — so the JV qualifies as small, and as SDVOSB if the protégé is a certified SDVOSB, for set-asides reserved for that size and status. Without SBA approval of the relationship, the mentor's size would normally affiliate the venture and disqualify it.
Does the mentor-protégé exemption change the joint-venture ownership and work rules?
No. The exemption only protects the JV from being found affiliated because of the mentor relationship. The SDVOSB joint-venture rules in 13 CFR § 128.402 still fully apply: the SDVOSB protégé must be the managing venturer, own at least 51%, provide the responsible manager, perform at least 40% of the JV's work, and receive at least 40% of profits, and the JV must meet the limitations on subcontracting.
Do I need SBA approval before bidding as a mentor-protégé joint venture?
Yes. The affiliation exemption applies only to an SBA-approved mentor-protégé agreement. You must have the agreement approved before you rely on it to bid — you cannot form the relationship informally and claim the exemption after the fact. Bidding a set-aside as a mentor-protégé JV without an approved agreement risks an affiliation finding and loss of the award.
Primary Sources
- 13 CFR § 125.9 — SBA Mentor-Protégé Program
- 13 CFR § 128.402 — Joint venture requirements (VetCert)
- SBA Mentor-Protégé Program (official)
Plain-English reference, not legal advice. Teaming, joint-venture, affiliation, and subcontracting rules are fact-specific and the SBA regulations and FAR are amended from time to time — always read the current 13 CFR and FAR text, confirm the requirements with the contracting officer and your SBA resources, and consult qualified counsel before structuring a joint venture, teaming agreement, or subcontract you intend to rely on.
Change log (1)
- LaunchedPublished the federal teaming, joint venture & subcontracting arrangements reference covering how an SDVOSB works with other firms on a set-aside — the prime contractor and subcontractor roles, the FAR Subpart 9.6 contractor team arrangement (teaming agreement), the SDVOSB joint venture (13 CFR § 128.402), the SBA mentor-protégé joint venture (13 CFR § 125.9), the similarly situated entity that counts a sub's work as self-performance (13 CFR § 125.6), the ostensible subcontractor rule (13 CFR § 121.103(h)), general affiliation (13 CFR § 121.103), the small business subcontracting plan (FAR Subpart 19.7 / 52.219-9), and flow-down clauses (FAR 52.212-5 / Subpart 44.2) — each with an at-a-glance quick-facts card, a when-you-use-it list, a key-features table, an SDVOSB-specific angle, a how-to-set-it-up checklist, watch-outs, FAQPage, Article, Dataset, and BreadcrumbList structured data, primary-source citations, and cross-links into the glossary, regulation explainers, how-to guides, set-aside comparisons, FAQ, clauses, forms, and the limitations-on-subcontracting, subcontracting-goal, set-aside eligibility, and size-standard calculators.