WASHINGTON ― A bipartisan pair of senators have introduced a bill to make it easier for small businesses to do business with the Pentagon, through larger defense firms.
Sens. Martin Heinrich, D-N.M., and Joni Ernst, R-Iowa, on Monday announced the Defense Small Business Advancement Act, which is meant to reauthorize and improve the Department of Defense Mentor-Protégé Program. One of several such programs the federal government offers, the Defense Department’s program was established in 1991, then repeatedly expanded and renewed until the administration and Congress allowed it to expire last year.
“Small businesses often struggle to overcome the hurdles of bureaucracy and fail to break through the existing network of suppliers to the Department of Defense, which is the single largest department in the federal government,” Heinrich, ranking member of the Senate Armed Services Subcommittee on Strategic Forces, said in a statement.
“This bill gives small businesses an opportunity to partner with larger defense companies who have the resources and experience to navigate the procurement process and compete for contracts, which will create good paying jobs in our communities and provide better products for the Department of Defense.”
The introduction of the bill just weeks before the Senate Armed Services Committee begins its markup of the 2019 National Defense Authorization Act tees up its inclusion in the NDAA, in some form or another.
Ernst, a member of the Senate Small Business and Entrepreneurship Committee and chairwoman of the SASC Subcommittee on Emerging Threats and Capabilities, said Iowa-based small businesses in the defense industry are often at a disadvantage when it comes to landing Pentagon contracts ― but the mentor program would "open the door for additional opportunities for our local job creators.”
According to a report by the Congressional Research Service, under the program, mentors were allowed to make advance or progress payments to their protégés that the DOD reimburses; award subcontracts to their protégés on a noncompetitive basis when they would not otherwise be able to do so; lend money to or make investments in protégé firms; and provide or arrange for other assistance.
The Pentagon has provided roughly $450 million to mentor firms since the program’s inception through fiscal 2017. The DoD provided $23 million in FY17, $20 million in FY18, $30 million in FY19, and it proposed $32 million in the FY20 budget.
The Heinrich-Ernst bill tweaks the original program by requiring an independent third party to conduct a study and provide recommendations for improving the program based on previous data and data to be accumulated over the next three years of the program.
The program was meant to increase participation of small, disadvantaged businesses performing as suppliers to the DoD, civilian agencies and private industry by encouraging mentorships from established DoD contractors.
Assistance from mentors could include technical, managerial and other business development assistance to small businesses. Mentors would also obtain assistance for protégés through small business development centers, procurement technical assistance centers, historically black colleges and universities, and minority institutions of higher education.
The program would incentivize mentors to provide the assistance by reimbursing developmental assistance given to the protégé, or granting credit toward applicable subcontracting goals ― as defined by the Federal Acquisition Regulation.
Participating protégés have been awarded more than $5.4 billion in contracts over the lifetime of the program. For every year a protégé business participated in the program, the average business added 13.4 new, full-time employees to its payroll and earned $7.3 million in additional revenue, according to Heinrich’s office.
Joe Gould is the senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry. He served previously as Congress reporter.