[Federal Register Volume 81, Number 185 (Friday, September 23, 2016)]
[Proposed Rules]
[Pages 65610-65615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-22574]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Part 219 and Appendix I to Chapter 2

[Docket DARS-2016-0033]
RIN 0750-AJ05


Defense Federal Acquisition Regulation Supplement: Amendment to 
Mentor-Prot[eacute]g[eacute] Program (DFARS Case 2016-D011)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Proposed rule.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement a section of the National 
Defense Authorization Act for Fiscal Year 2016 that provides amendments 
to the DoD Pilot Mentor-Prot[eacute]g[eacute] Program.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before November 22, 2016, to be 
considered in the formation of a final rule.

ADDRESSES: Submit comments identified by DFARS Case 2016-D011, using 
any of the following methods:
    [cir] Federal eRulemaking Portal: http://www.regulations.gov. 
Search for

[[Page 65611]]

``DFARS Case 2016-D011.'' Select ``Comment Now'' and follow the 
instructions provided to submit a comment. Please include ``DFARS Case 
2016-D011'' on any attached documents.
    [cir] Email: osd.dfars@mail.mil. Include DFARS Case 2016-D011 in 
the subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. 
Jennifer Johnson, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense 
Pentagon, Washington, DC 20301-3060.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To 
confirm receipt of your comment(s), please check www.regulations.gov, 
approximately two to three days after submission to verify posting 
(except allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: Ms. Jennifer Johnson, telephone 571-
372-6100.

SUPPLEMENTARY INFORMATION:

I. Background

    This rule proposes to revise the DFARS to implement section 861 of 
the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 
(Pub. L. 114-92). Section 861 provides several amendments to the DoD 
Pilot Mentor-Prot[eacute]g[eacute] Program (``the Program''). In 
particular, section 861 provides for contractors who participate in the 
Program as mentors to report all technical or management assistance 
provided; any new awards of subcontracts to the prot[eacute]g[eacute] 
firm, including the value of such subcontracts; any extensions, 
increases in the scope of work, or additional, unreported payments to 
the prot[eacute]g[eacute] firm; the amount of any progress payments or 
advance payments made to the prot[eacute]g[eacute] firm for performance 
under any subcontract made under the Program; any loans made to the 
prot[eacute]g[eacute] firm; all Federal contracts awarded to the mentor 
and prot[eacute]g[eacute] firms as a joint venture; any assistance the 
mentor firm obtained for the prot[eacute]g[eacute] firm from small 
business development centers established under 15 U.S.C. 648, entities 
providing procurement technical assistance under 10 U.S.C. chapter 142, 
or historically Black colleges or universities or minority institutions 
of higher education; whether the terms of the mentor-
prot[eacute]g[eacute] agreement have changed; and a narrative 
describing the success assistance provided under the Program has had in 
addressing the prot[eacute]g[eacute] firm's developmental needs, the 
impact on DoD contracts, and addressing any problems encountered. These 
reporting requirements apply retroactively to mentor-
prot[eacute]g[eacute] agreements in effect on November 25, 2015, date 
of enactment of the NDAA for FY 2016. The new reporting requirements 
will provide information to DoD's Office of Small Business Programs to 
support decisions regarding continuation of particular mentor-
prot[eacute]g[eacute] agreements.
    In addition, section 861--
     Adds new eligibility criteria;
     Limits the number of mentor-prot[eacute]g[eacute] 
agreements to which a prot[eacute]g[eacute] firm may be a party;
     Limits the period of time during which a 
prot[eacute]g[eacute] firm may participate in mentor-
prot[eacute]g[eacute] agreements under the Program;
     Adds new elements to mentor-prot[eacute]g[eacute] 
agreements addressing the benefits of the agreement to DoD and goals 
for additional awards for which the prot[eacute]g[eacute] firm can 
compete outside the Program;
     Removes business development assistance using mentor firm 
personnel and cash in exchange for an ownership interest in the 
prot[eacute]g[eacute] firm from the types of assistance that a mentor 
firm may provide to a prot[eacute]g[eacute] firm;
     Prohibits reimbursement of any fee assessed by the mentor 
firm for certain services provided to the prot[eacute]g[eacute] firm 
while participating in a joint venture with the prot[eacute]g[eacute] 
firm;
     Revises the definitions of the terms ``small business 
concern'' and ``disadvantaged small business concern;''
     Adds definitions for ``severely disabled individual'' and 
``affiliated;'' and
     Extends the Program for three years.

II. Discussion and Analysis

    This rule proposes amendments to DFARS subpart 219.71 and Appendix 
I, and significant revisions are summarized in the following 
paragraphs:

A. Subpart 219.71, Pilot Mentor-Prot[eacute]g[eacute] Program

     219.7102, General. This section is amended to replace the 
list of Program eligibility criteria with a reference to the 
eligibility criteria located in Appendix I, section I-102.
     219.7104, Developmental assistance costs eligible for 
reimbursement or credit. This section is amended to revise the date by 
which a mentor firm must incur costs under the Program in order to be 
eligible for reimbursement or credit toward small business 
subcontracting goals.

B. Appendix I, Policy and Procedures for the DoD Pilot Mentor-
Prot[eacute]g[eacute] Program

     I-100, Purpose. This section is amended to align more 
closely with the language in section 861 of the NDAA for FY 2016.
     I-101, Definitions. This section is amended to add the 
definition of ``nontraditional defense contractor'' provided in section 
861, and to delete the definition of ``historically Black college or 
university'' that repeated the definition in FAR 2.101.
     I-102, Participant eligibility. This section is amended to 
revise the mentor and prot[eacute]g[eacute] eligibility criteria in 
accordance with section 861.
     I-103, Program duration. This section is amended to revise 
the date by which new mentor-prot[eacute]g[eacute] agreements may be 
submitted and approved and the date by which a mentor firm must incur 
costs under the Program in order to be eligible for reimbursement or 
credit toward subcontracting goals.
     I-104, Selection of prot[eacute]g[eacute] firms. This 
section is amended to encourage mentor firms to select firms as 
prot[eacute]g[eacute]s that have not received significant prime 
contracts from a Federal agency. In addition, this section is amended 
to indicate the number of mentor-prot[eacute]g[eacute] agreements to 
which a prot[eacute]g[eacute] firm may be a party, and to implement the 
time limitation specified in section 861 for a prot[eacute]g[eacute] 
firm's participation in the Program.
     I-105, Mentor approval process. This section is amended to 
reflect the revised eligibility criteria.
     I-107, Elements of a mentor-prot[eacute]g[eacute] 
agreement. This section is amended to incorporate new requirements of 
section 861.
    [cir] New paragraph (e) is added to require assurances in mentor-
prot[eacute]g[eacute] agreements that the mentor and 
prot[eacute]g[eacute] firms are not affiliated as defined in section 
861. In addition, the existing paragraph (e) is renumbered as paragraph 
(f), and the existing paragraph (f) is renumbered as paragraph (g).
    [cir] New paragraphs (g)(3) and (4) are added to implement the 
section 861 requirement for mentor-prot[eacute]g[eacute] agreements to 
include the following:
    [ssquf] A description of the quantitative and qualitative benefits 
to DoD from the agreement, if applicable; and
    [ssquf] Goals for additional awards for which the 
prot[eacute]g[eacute] firm can compete outside the Program.
     I-109, Reimbursement agreements. This section is amended 
to implement the prohibition in section 861 of reimbursement of fees 
assessed by the mentor firm for certain services

[[Page 65612]]

provided to the prot[eacute]g[eacute] firm or reimbursement of business 
development expenses incurred by the mentor firm while participating in 
a joint venture with the prot[eacute]g[eacute] firm.
     I-112, Reporting requirements. This section is amended to 
include the new reporting requirements of section 861 and to specify 
that they apply retroactively in accordance with paragraph (b)(2) of 
section 861.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold and for Commercial Items, Including Commercially Available 
Off-the-Shelf Items

    This rule does not add any new provisions or clauses or impact any 
existing provisions or clauses.

IV. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

V. Regulatory Flexibility Act

    DoD does not expect this proposed rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. 
However, an initial regulatory flexibility analysis has been performed 
and is summarized as follows:
    This rule proposes to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement section 861 of the National 
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016, which 
provides amendments to the DoD Pilot Mentor-Prot[eacute]g[eacute] 
Program (``the Program''). Specifically, section 861 requires mentor 
firms to report a variety of information on the assistance they have 
provided to their prot[eacute]g[eacute] firms, the success this 
assistance has had in addressing the prot[eacute]g[eacute] firm's 
developmental needs, the impact on DoD contracts, and addressing any 
problems encountered. The new reporting requirements apply 
retroactively to mentor-prot[eacute]g[eacute] agreements that were in 
effect on the date of enactment of the NDAA for FY 2016 (enacted 
November 25, 2015). In addition, section 861 adds new eligibility 
criteria for mentor and prot[eacute]g[eacute] firms; limits the period 
of time a prot[eacute]g[eacute] firm can participate in the Program; 
limits the number of mentor-prot[eacute]g[eacute] agreements to which a 
prot[eacute]g[eacute] can be a party; extends the Program for three 
years; and makes several other amendments.
    The objectives of this rule are to implement statutory amendments 
to the Program and to provide DoD's Office of Small Business Programs 
with information to support decisions regarding continuation of 
particular mentor-prot[eacute]g[eacute] agreements. The legal basis for 
the amendments is section 861 of the NDAA for FY 2016.
    The rule will apply to small entities that participate in the 
Program. There are currently 85 small entities participating in the 
Program as prot[eacute]g[eacute] firms and six small entities 
participating as mentors.
    The rule imposes new reporting requirements on mentor firms, 
including mentors who are small businesses, regarding assistance they 
have provided to their prot[eacute]g[eacute] firms and the success this 
assistance has had. Although prot[eacute]g[eacute] firms are not 
required to submit these reports, the mentor firms will need to obtain 
supporting information from the prot[eacute]g[eacute] firms in order to 
ascertain the success of the assistance provided.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules.
    DoD invites comments from small business concerns and other 
interested parties on the expected impact of this rule on small 
entities.
    DoD will also consider comments from small entities concerning the 
existing regulations in subparts affected by this rule in accordance 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite 5 U.S.C. 610 (DFARS Case 2016-D011), in 
correspondence.

VI. Paperwork Reduction Act

    The rule contains information collection requirements that require 
the approval of the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act (44 U.S.C. chapter 35). OMB Control Number 
0704-0332, Defense Federal Acquisition Regulation Supplement (DFARS) 
Appendix I, is currently in place for the DoD Mentor 
Prot[eacute]g[eacute] program. This proposed rule, DFARS Case 2016-
D011, however, requires revision of OMB 0704-0332 to increase the 
burden hours to accommodate the increased reporting requirements 
resulting from this rule. Accordingly, DoD has submitted a request to 
OMB for approval of a revised information collection requirement as 
discussed below.

A. Public Reporting Burden for This Collection of Information is 
Estimated To Average Three Hours per Response, Including the Time for 
Reviewing Instructions, Searching Existing Data Sources, Gathering and 
Maintaining the Data Needed, and Completing and Reviewing the 
Collection of Information

    The annual reporting burden is estimated as follows:
    Respondents: 127.
    Responses per respondent: 2 approximately.
    Total annual responses: 255.
    Preparation hours per response: 2 hours.
    Total response Burden Hours: 595.

B. Request for Comments Regarding Paperwork Burden

    Written comments and recommendations on the proposed information 
collection, including suggestions for reducing this burden, should be 
sent to Ms. Jasmeet Seehra at the Office of Management and Budget, Desk 
Officer for DoD, Room 10236, New Executive Office Building, Washington, 
DC 20503, or email Jasmeet_K._Seehra@omb.eop.gov, with a copy to the 
Defense Acquisition Regulations System, Attn: Ms. Jennifer Johnson, 
OUSD (AT&L) DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, 
DC 20301-3060. Comments can be received from 30 to 60 days after the 
date of this notice, but comments to OMB will be most useful if 
received by OMB within 30 days after the date of this notice.
    Public comments are particularly invited on: Whether this 
collection of information is necessary for the proper performance of 
functions of the DFARS, and will have practical utility; whether our 
estimate of the public burden of this collection of information is 
accurate, and based on valid assumptions and methodology; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways in which we can minimize the burden of the 
collection of information on those who are to respond, through the use 
of appropriate technological collection techniques or other forms of 
information technology.
    To request more information on this proposed information collection 
or to obtain a copy of the proposal and associated collection 
instruments, please write to the Defense Acquisition

[[Page 65613]]

Regulations System, Attn: Ms. Jennifer Johnson, OUSD(AT&L)DPAP/DARS, 
Room 3B941, 3060 Defense Pentagon, Washington, DC 20301-3060, or email 
osd.dfars@mail.mil. Include DFARS Case 2016-D011 in the subject line of 
the message.

List of Subjects in 48 CFR Parts 219 and Appendix I to Chapter 2

    Government procurement.

Jennifer L. Hawes,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR part 219 and appendix I to chapter 2 are proposed 
to be amended as follows:

0
1. The authority citation for 48 CFR part 219 and appendix I to chapter 
2 continues to read as follows:

    Authority:  41 U.S.C. 1303 and 48 CFR chapter 1.

PART 219--SMALL BUSINESS PROGRAMS


219.7100  [Amended]

0
2. Amend section 219.7100 by--
0
a. Removing ``Section 831'' and adding ``section 831'' in its place; 
and
0
b. Adding the phrase ``, as amended through November 25, 2015'' to the 
end of the first sentence.
0
3. Amend section 219.7102 by--
0
a. Revising paragraph (a);
0
b. Removing paragraph (b); and
0
c. Redesignating paragraphs (c) and (d) as paragraphs (b) and (c), 
respectively.
    The revision reads as follows:


219.7102  General.

* * * * *
    (a) Mentor firms and prot[eacute]g[eacute] firms that meet the 
criteria in Appendix I, section I-102.
* * * * *


219.7103-2  [Amended]

0
4. Amend section 219.7103-2, in paragraph (e)(3), by removing 
``219.7102(d)(1)(ii)'' and adding ``219.7102(c)(1)(ii)'' in its place.


219.7104  [Amended]

0
5. Amend section 219.7104 by--
0
a. In paragraph (b)--
0
i. Removing ``Advance agreements are encouraged.'';
0
ii. Removing ``before October 1, 2018'' and adding ``not later than 
September 30, 2021'' in its place; and
0
b. In paragraph (d), removing ``before October 1, 2018'' and adding 
``not later than September 30, 2021'' in its place.

Appendix I to Chapter 2--Policy and Procedures for The DOD Pilot Mentor 
Prot[eacute]g[eacute] Program

0
6. Amend appendix I to chapter 2 by--
0
a. In section I-100, revising paragraph (a);
0
b. Removing section I-101.1;
0
c. Redesignating section I-101.2 as section I-101.1;
0
d. Adding new section I-101.2;
0
e. Revising section I-101.4;
0
f. Removing section I-101.5;
0
g. Redesignating section I-101.6 as section I-101.5;
0
h. In the newly redesignated section I-101.5, removing ``Section'' and 
adding ``section'' in its place;
0
i. Removing section I-101-7;
0
j. Redesignating section I-101.8 as section I-101.6;
0
k. In section I-102, revising paragraphs (a), (b), (c), and (d);
0
l. Amend section I-103 by--
0
i. In paragraph (a), removing ``September 30, 2015'' and adding 
``September 30, 2018'' in its place;
0
ii. In paragraph (b), removing ``September 30, 2018'' and adding 
``September 30, 2021'' in its place;
0
m. Amend section I-104 by--
0
i. Revising paragraph (a);
0
ii. In paragraph (c), removing ``as defined in I-101.5'' '
0
iii. In paragraph (d) removing ``I-107(f)'' and adding ``I-106(d)'' in 
its place;
0
iv. Revising paragraph (e);
0
n. Amend section I-105 by--
0
i. Revising paragraph (b)(1);
0
ii. In paragraphs (b)(2), (b)(3), (b)(4), (b)(5), (b)(6), removing 
``company's'' and ``company'' and adding ``entity's'' and ``entity'', 
respectively in each place they appear;
0
iii. Revising paragraph (b)(7);
0
iv. Revising paragraph (c);
0
o. Amend section I-106 by--
0
i. In paragraph (d)(1)(i), removing ``business development, '';
0
ii. In paragraph (d)(1)(iii), adding ``described in I-107(g)'' to the 
end of the sentence;
0
iii. In paragraph (d)(2), removing ``Award of subcontracts'' and adding 
``Award of subcontracts to the prot[eacute]g[eacute] firm'' in its 
place;
0
iv. Removing paragraph (d)(6);
0
v. Redesignating paragraph (d)(7) as (d)(6);
0
p. Amend section I-107 by--
0
i. In the introductory text, removing ``will contain the following 
elements:'' and adding ``shall contain--'' in its place;
0
ii. Revising paragraph (b);
0
iii. In paragraph (d), removing ``I-102'' and adding ``I-102(a)'' in 
its place;
0
iv. Revising paragraphs (e), (f), and (g);
0
q. Amend section I-109 by--
0
i. Redesignating paragraph (e) as paragraph (f);
0
ii. Adding new paragraph (e);
0
r. Amend section I-110.1, in paragraph (a), by removing ``DoD 
Comprehensive Subcontracting Plan Test Program'' and adding ``DoD Test 
Program for Negotiation of Comprehensive Small Business Subcontracting 
Plans'' in its place; and removing ``entity employing the severely 
disabled'' and adding ``entity employing severely disabled 
individuals'' in its place;
0
s. Amend section I-112.1 by--
0
i. In the section heading, removing ``SF 294s'' and adding ``Standard 
Forms 294'' in its place;
0
ii. In paragraph (b), removing ``SDB'' and adding ``applicable'' in its 
place; and removing ``I-101.3 or I-101.5'' and adding ``I-102(b)'' in 
its place;
0
t. Revise section I-112.2.
    The revisions and additions read as follows:

I-100 Purpose.

    (a) This Appendix I to 48 CFR chapter 2 implements the Pilot 
Mentor-Prot[eacute]g[eacute] Program (hereafter referred to as the 
``Program'') established under section 831 of Public Law 101-510, 
the National Defense Authorization Act for Fiscal Year 1991 (10 
U.S.C. 2302 note), as amended through November 25, 2015. The purpose 
of the Program is to provide incentives to major DoD contractors to 
furnish eligible small business concerns with assistance designed 
to--
    (1) Enhance the capabilities of eligible small business concerns 
to perform as subcontractors and suppliers under DoD contracts and 
other contracts and subcontracts; and
    (2) Increase the participation of such business concerns as 
subcontractors and suppliers under DoD contracts, other Federal 
Government contracts, and commercial contracts.
* * * * *

I-101.2 Nontraditional defense contractor.

    An entity that is not currently performing and has not performed 
any contract or subcontract for DoD that is subject to full coverage 
under the cost accounting standards prescribed pursuant to 41 U.S.C. 
1502 and the regulations implementing such section, for at least the 
1-year period preceding the solicitation of sources by DoD for the 
procurement or transaction (10 U.S.C. 2302(9)).
* * * * *

I-101.4 Severely disabled individual.

    An individual who is blind or severely disabled as defined in 41 
U.S.C. 8501.
* * * * *

I-102 Participant eligibility.

    (a) To be eligible to participate as a mentor, an entity must--

[[Page 65614]]

    (1) Be eligible for the award of Federal contracts;
    (2) Demonstrate that it--
    (i) Is qualified to provide assistance that will contribute to 
the purpose of the Program;
    (ii) Is of good financial health and character; and
    (iii) Is not on a Federal list of debarred or suspended 
contractors; and
    (3) Be capable of imparting value to a prot[eacute]g[eacute] 
firm because of experience gained as a DoD contractor or through 
knowledge of general business operations and Government contracting, 
as demonstrated by evidence that such entity--
    (i) Received DoD contracts and subcontracts equal to or greater 
than $100 million during the previous fiscal year;
    (ii) Is an other-than-small business, unless a waiver to the 
small business exception has been obtained from the Director, Small 
Business Programs (SBP), OUSD(AT&L);
    (iii) Is a prime contractor to DoD with an active subcontracting 
plan; or
    (iv) Has graduated from the 8(a) Business Development Program 
and provides documentation of its ability to serve as a mentor.
    (b) To be eligible to participate as a prot[eacute]g[eacute], an 
entity must be--
    (1) A small business concern;
    (2) Eligible for the award of Federal contracts;
    (3) Less than half the Small Business Administration (SBA) size 
standard for its primary North American Industry Classification 
System (NAICS) code;
    (4) Not owned or managed by individuals or entities that 
directly or indirectly have stock options or convertible securities 
in the mentor firm; and
    (5) At least one of the following:
    (i) A qualified HUBZone small business concern.
    (ii) A women-owned small business concern.
    (iii) A service-disabled veteran-owned small business concern.
    (iv) An entity owned and controlled by an Indian tribe.
    (v) An entity owned and controlled by a Native Hawaiian 
organization.
    (vi) An entity owned and controlled by socially and economically 
disadvantaged individuals.
    (vii) A qualified organization employing severely disabled 
individuals.
    (viii) A nontraditional defense contractor.
    (ix) An entity that currently provides goods or services in the 
private sector that are critical to enhancing the capabilities of 
the defense supplier base and fulfilling key DoD needs.
    (c) Mentor firms may rely in good faith on a written 
representation that the entity meets the requirements of paragraph 
(b) of this section, except that a mentor firm is required to 
confirm a prot[eacute]g[eacute]'s status as a HUBZone small business 
concern (see FAR 19.703(d)).
    (d) If at any time the SBA (or DoD in the case of entities 
employing severely disabled individuals) determines that a 
prot[eacute]g[eacute] is ineligible, assistance that the mentor firm 
furnishes to the prot[eacute]g[eacute] after the date of the 
determination may not be considered assistance furnished under the 
Program.
* * * * *

I-104 Selection of prot[eacute]g[eacute] firms.

    (a) Mentor firms will be solely responsible for selecting 
prot[eacute]g[eacute] firms that qualify under I-102(b). Mentor 
firms are encouraged to identify and select concerns that have not 
previously received significant prime contract awards from DoD or 
any other Federal agency.
* * * * *
    (e) A prot[eacute]g[eacute] firm may not be a party to more than 
one DoD mentor-prot[eacute]g[eacute] agreement at a time, and may 
only participate in the Program during the 5-year period beginning 
on the date the prot[eacute]g[eacute] firm enters into its first 
mentor-prot[eacute]g[eacute] agreement.

I-105 Mentor approval process.

* * * * *
    (b) * * *
    (1) A statement that the entity meets the requirements in I-
102(a), specifying the criteria in I-102(a)(3) under which the 
entity is applying.
* * * * *
    (7) The total dollar amount and percentage of subcontracts that 
the entity awarded to firms qualifying under I-102(b)(5)(ii) through 
(viii) during the 2 preceding fiscal years. (Show DoD subcontract 
awards separately.) If the entity was required to submit a Summary 
Subcontract Report (SSR) in the Electronic Subcontracting Reporting 
System, the request must include copies of the final reports for the 
2 preceding fiscal years.
* * * * *
    (c) A template of the mentor application is available at: http://www.acq.osd.mil/osbp/sb/programs/mpp/resources.shtml.
* * * * *

I-107 Elements of a mentor-prot[eacute]g[eacute] agreement.

* * * * *
    (b) The NAICS code(s) that represent the contemplated supplies 
or services to be provided by the prot[eacute]g[eacute] firm to the 
mentor firm and a statement that, at the time the agreement is 
submitted for approval, the prot[eacute]g[eacute] firm does not 
exceed the size standard in I-102(b)(3);
* * * * *
    (e) Assurances that--
    (1) The mentor firm does not share, directly or indirectly, with 
the prot[eacute]g[eacute] firm ownership or management of the 
prot[eacute]g[eacute] firm;
    (2) The mentor firm does not have an agreement, at the time the 
mentor firm enters into a mentor-prot[eacute]g[eacute] agreement, to 
merge with the prot[eacute]g[eacute] firm;
    (3) The owners and managers of the mentor firm are not the 
parent, child, spouse, sibling, aunt, uncle, niece, nephew, 
grandparent, grandchild, or first cousin of an owner or manager of 
the prot[eacute]g[eacute] firm;
    (4) The mentor firm has not, during the 2-year period before 
entering into a mentor-prot[eacute]g[eacute] agreement, employed any 
officer, director, principal stock holder, managing member, or key 
employee of the prot[eacute]g[eacute] firm;
    (5) The mentor firm has not engaged in a joint venture with the 
prot[eacute]g[eacute] firm during the 2-year period before entering 
into a mentor-prot[eacute]g[eacute] agreement, unless such joint 
venture was approved by SBA prior to making any offer on a contract;
    (6) The mentor firm is not, directly or indirectly, the primary 
party providing contracts to the prot[eacute]g[eacute] firm, as 
measured by the dollar value of the contracts; and
    (7) The SBA has not made a determination of affiliation or 
control;
    (f) A preliminary assessment of the developmental needs of the 
prot[eacute]g[eacute] firm;
    (g) A developmental program for the prot[eacute]g[eacute] firm 
including--
    (1) The type of assistance the mentor will provide to the 
prot[eacute]g[eacute] and how that assistance will--
    (i) Increase the prot[eacute]g[eacute]'s ability to participate 
in DoD, Federal, and/or commercial contracts and subcontracts; and
    (ii) Increase small business subcontracting opportunities in 
industry categories where eligible prot[eacute]g[eacute]s or other 
small business firms are not dominant in the company's vendor base;
    (2) Factors to assess the prot[eacute]g[eacute] firm's 
developmental progress under the Program, including specific 
milestones for providing each element of the identified assistance;
    (3) A description of the quantitative and qualitative benefits 
to DoD from the agreement, if applicable; and
    (4) Goals for additional awards for which the 
prot[eacute]g[eacute] firm can compete outside the Program;
* * * * *

I-109 Reimburseable agreements.

* * * * *
    (e) DoD may not reimburse any fee to the mentor firm for 
services provided to the prot[eacute]g[eacute] firm pursuant to I-
106(d)(6) or for business development expenses incurred by the 
mentor firm under a contract awarded to the mentor firm while 
participating in a joint venture with the prot[eacute]g[eacute] 
firm.
* * * * *

I-112.2 Program specific reporting requirements.

    (a) Mentors must report on the progress made under active 
mentor-prot[eacute]g[eacute] agreements semiannually for the periods 
ending March 31st and September 30th throughout the Program 
participation term of the agreement. The September 30th report must 
address the entire fiscal year.
    (1) Reports are due 30 days after the close of each reporting 
period.
    (2) Each report must include the following data on performance 
under the mentor-prot[eacute]g[eacute] agreement:
    (i) Dollars obligated (for reimbursable agreements).
    (ii) Expenditures.
    (iii) Dollars credited, if any, toward applicable subcontracting 
goals as a result of developmental assistance provided to the 
prot[eacute]g[eacute] and a copy of the ISR or SF 294 and/or SSR for 
each contract where developmental assistance was credited.
    (iv) Any new awards of subcontracts on a competitive or 
noncompetitive basis to the prot[eacute]g[eacute] firm under DoD 
contracts or other contracts, including the value of such 
subcontracts.

[[Page 65615]]

    (v) All technical or management assistance provided by mentor 
firm personnel for the purposes described in I-106(d).
    (vi) Any extensions, increases in the scope of work, or 
additional payments not previously reported for prior awards of 
subcontracts on a competitive or noncompetitive basis to the 
prot[eacute]g[eacute] firm under DoD contracts or other contracts, 
including the value of such subcontracts.
    (vii) The amount of any payment of progress payments or advance 
payments made to the prot[eacute]g[eacute] firm for performance 
under any subcontract made under the Program.
    (viii) Any loans made by the mentor firm to the 
prot[eacute]g[eacute] firm.
    (ix) All Federal contracts awarded to the mentor firm and the 
prot[eacute]g[eacute] firm as a joint venture, designating whether 
the award was a restricted competition or a full and open 
competition.
    (x) Any assistance obtained by the mentor firm for the 
prot[eacute]g[eacute] firm from the entities listed at I-106(d)(6).
    (xi) Whether there have been any changes to the terms of the 
mentor-prot[eacute]g[eacute] agreement.
    (xii) A narrative describing the following:
    (A) The success assistance provided under I-106(d) has had in 
addressing the developmental needs of the prot[eacute]g[eacute] 
firm.
    (B) The impact on DoD contracts.
    (C) Any problems encountered.
    (D) Any milestones achieved in the prot[eacute]g[eacute] firm's 
developmental program.
    (E) Impact of the agreement in terms of capabilities enhanced, 
certifications received, and technology transferred.
    (3) In accordance with section 861, paragraph (b)(2), of the 
National Defense Authorization Act for Fiscal Year 2016 (Pub. L. 
114-92), the reporting requirements specified in paragraphs 
(a)(2)(iv) through (a)(2)(xii)(C) of this section apply 
retroactively to mentor-prot[eacute]g[eacute] agreements that were 
in effect on November 25, 2015. Mentors must submit reports as 
described in paragraph (a) of this section.
    (4) A recommended reporting format and guidance for its 
submission are available at: http://www.acq.osd.mil/osbp/sb/programs/mpp/resources.shtml.
    (b) The prot[eacute]g[eacute] must provide data, annually by 
October 31st, on the progress made during the prior fiscal year by 
the prot[eacute]g[eacute] in employment, revenues, and participation 
in DoD contracts during--
    (1) Each fiscal year of the Program participation term; and
    (2) Each of the 2 fiscal years following the expiration of the 
Program participation term.
    (c) The prot[eacute]g[eacute] report required by paragraph (b) 
of this section may be provided as part of the mentor report for the 
period ending September 30th required by paragraph (a) of this 
section.
    (d) Progress reports must be submitted--
    (1) For credit agreements, to the cognizant Component Director, 
SBP, that approved the agreement, and the mentor's cognizant DCMA 
administrative contracting officer; and
    (2) For reimbursable agreements, to the cognizant Component 
Director, SBP, the contracting officer, the DCMA administrative 
contracting officer, and the program manager.

[FR Doc. 2016-22574 Filed 9-22-16; 8:45 am]
 BILLING CODE 5001-06-P