Defense Federal Acquisition Regulation
APPENDIX A - ARMED SERVICES BOARD OF CONTRACT APPEALS
Part 1 -Charter
1. There is created the Armed Services Board of Contract Appeals which is hereby designated as the authorized representative of the Secretary of Defense, the Secretary of the Army, the Secretary of the Navy and the Secretary of the Air Force, in hearing, considering and determining appeals by contractors from decisions of contracting officers or their authorized representatives or other authorities on disputed questions. These appeals may be taken (a) pursuant to the Contract Disputes Act of 1978 (41 U.S.C. Sect. 601, et seq.), (b) pursuant to the provisions of contracts requiring the decision by the Secretary of Defense or by a Secretary of a Military Department or their duly authorized representative, or (c) pursuant to the provisions of any directive whereby the Secretary of Defense or the Secretary of a Military Department or their authorized representative has granted a right of appeal not contained in the contract on any matter consistent with the contract appeals procedure. The Board may determine contract disputes for other departments and agencies by agreement as permitted by law. The Board shall operate under general policies established or approved by the Under Secretary of Defense for Acquisition, Technology and Logistics and may perform other duties as directed not inconsistent with the Contract Disputes Act of 1978.
2. Membership of the Board shall consist of attorneys at law who have been qualified in the manner prescribed by the Contract Disputes Act of 1978. Members of the Board are hereby designated Administrative Judges. There shall be appointed from the Judges of the Board a Chairman and two or more Vice-Chairmen. Appointment of the Chairman and Vice-Chairmen and other Judges of the Board shall be made by the Under Secretary of Defense for Acquisition, Technology and Logistics, the General Counsel of the Department of Defense, and the Assistant Secretaries of the Military Departments responsible for acquisition. The Chairman may designate a Judge of the Board to serve as an Acting Chairman or Acting Vice Chairman.
3. It shall be the duty and obligation of the Judges of the Armed Services Board of Contract Appeals to decide appeals on the record of the appeal to the best of their knowledge and ability in accordance with applicable contract provisions and in accordance with law and regulation pertinent thereto.
4. The Chairman of the Board shall be responsible for establishing appropriate divisions of the Board to provide for the most effective and expeditious handling of appeals. The Chairman shall designate one Judge of each division as the division head. The Chairman may refer an appeal of unusual difficulty, significant precedential importance, or serious dispute within the normal decision process for decision by the senior deciding group. The division heads and the Chairman and Vice-Chairmen, together with, if applicable, the author of the decision so referred, shall constitute the senior deciding group of the Board. The decision of the Board in cases so referred to the senior deciding group shall be by majority vote of the participating Judges of that group. A majority of the Judges of a division shall constitute a quorum for the transaction of the business of each, respectively. Decisions of the Board shall be by majority vote of the Judges of a division participating and the Chairman and a Vice-Chairman, unless the Chairman refers the appeal for decision by the senior deciding group. An appeal involving a small claim as defined by the Contract Disputes Act of 1978 may be decided by a single Judge or fewer Judges of the Board than herein before provided for cases of unlimited dollar amount, under accelerated or expedited procedures as provided in the Rules of the Board and the Contract Disputes Act of 1978.
5. The Board shall have all powers necessary and incident to the proper performance of its duties. The Board has the authority to issue methods of procedure and rules and regulations for its conduct and for the preparation and presentation of appeals and issuance of opinions.
6. Any Judge of the Board or any examiner, designated by the Chairman, shall be authorized to hold hearings, examine witnesses, and receive evidence and argument A Judge of the Board shall have authority to administer oaths and issue subpoenas as specified in the Contract Disputes Act of 1978. In cases of contumacy or refusal to obey a subpoena, the Chairman may request orders of the court in the manner prescribed in the Contract Disputes Act of 1978.
7. The Chairman shall be responsible for the internal organization of the Board and for its administration. He shall provide within approved ceilings for the staffing of the Board with non-Judge personnel, including hearing examiners, as may be required for the performance of the functions of the Board. The Chairman shall appoint a Recorder of the Board. All personnel shall be responsible to and shall function under the direction, supervision and control of the Chairman. Judges shall decide cases independently.
8. The Board will be serviced by the Department of the Army for administrative support as required for its operations. Administrative support will include budgeting, funding, fiscal control, manpower control and utilization, personnel administration, security administration, supplies, and other administrative services. The Departments of the Army, Navy, Air Force and the Office of the Secretary of Defense will participate in financing the Board’s operations on an equal basis and to the extent determined by the Under Secretary of Defense (Comptroller). The cost of processing appeals for departments and agencies other than those in the Department of Defense will be reimbursed.
9. Within 30 days following the close of a calendar quarter, the Chairman shall forward a report of the Board’s proceedings for the quarter to the Under Secretary of Defense for Acquisition, Technology and Logistics, the General Counsel of the Department of Defense, the Assistant Secretaries of the Military Departments responsible for acquisition, and to the Director of the Defense Logistics Agency. The Chairman of the Board will also furnish the Secretary of Defense, the General Counsel of the Department of Defense, the Secretaries of the Military Departments, and the Director of the Defense Logistics Agency, an annual report containing an account of the Board’s transactions and proceedings for the preceding fiscal year.
10. The Board shall have a seal bearing the following inscription: “Armed Services Board of Contract Appeals.” This seal shall be affixed to all authentications of copies of records and to such other instruments as the Board may determine.
11. This revised charter is effective May 14, 2007.
Kenneth J. Krieg
Under Secretary of Defense
(Acquisition, Technology and Logistics)
William J. Haynes II
General Counsel of the Department of Defense
Claude M. Bolton, Jr.
Assistant Secretary of the Army
(Acquisition, Logistics, & Technology)
Delores M. Etter
Assistant Secretary of the Navy
(Research, Development & Acquisition)
Sue C. Peyton
Assistant Secretary of the Air Force (Acquisition)
APPENDIX B - RESERVED Table Of Contents
APPENDIX C - RESERVED Table Of Contents
APPENDIX D - RESERVED Table Of Contents
APPENDIX E - RESERVED Table Of Contents
APPENDIX F - MATERIAL INSPECTION AND RECEIVING REPORT
APPENDIX G - RESERVED Table Of Contents
Part 2 -ARMY ACTIVITY ADDRESS NUMBERS
Part 3 -NAVY ACTIVITY ADDRESS NUMBERS
Part 4 -MARINE CORPS ACTIVITY ADDRESS NUMBERS
Part 5 -AIR FORCE ACTIVITY ADDRESS NUMBERS
Part 6 -DEFENSE LOGISTICS AGENCY ACTIVITY ADDRESS NUMBERS
Part 7 -DEFENSE INFORMATION SYSTEMS AGENCY ACTIVITY ADDRESS NUMBERS
Part 8 -NATIONAL IMAGERY AND MAPPING AGENCY ACTIVITY ADDRESS NUMBERS
Part 9 -DEFENSE THREAT REDUCTION AGENCY ACTIVITY ADDRESS NUMBERS
Part 10 -MISCELLANEOUS DEFENSE ACTIVITIES ACTIVITY ADDRESS NUMBERS
Part 11 -DEFENSE MICROELECTRONICS ACTIVITY
Part 12 -MISSILE DEFENSE AGENCY ACTIVITY
Part 13 -DEFENSE COMMISSARY AGENCY ACTIVITY ADDRESS NUMBERS
Part 14 -UNITED STATES SPECIAL OPERATIONS COMMAND ACTIVITY ADDRESS NUMBERS
Appendix H - DEBARMENT AND SUSPENSION PROCEDURES
This appendix provides uniform debarment and suspension procedures to be followed by all debarring and suspending officials.
Contractors will be notified of the proposed debarment or suspension in accordance with FAR 9.406-3 or 9.407-3. A copy of the record which formed the basis for the decision by the debarring and suspending official will be made available to the contractor. If there is a reason to withhold from the contractor any portion of the record, the contractor will be informed of what is withheld and the reasons for such withholding.
H-102 Nature of proceeding.
There are two distinct proceedings which may be involved in the suspension or debarment process. The first is the presentation of matters in opposition to the suspension or proposed debarment by the contractor. The second is fact-finding which occurs only in cases in which the contractor’s presentation of matters in opposition raises a genuine dispute over one or more material facts. In a suspension action based upon an indictment or in a proposed debarment action based upon a conviction or civil judgment, there will be no fact-finding proceeding concerning the matters alleged in the indictment, or the facts underlying the convictions or civil judgment. However, to the extent that the proposed action stems from the contractor’s affiliation with an individual or firm indicted or convicted, or the subject of a civil judgment, fact-finding is permitted if a genuine dispute of fact is raised as to the question of affiliation as defined in FAR 9.403.
H-103 Presentation of matters in opposition.
(a) In accordance with FAR 9.406-3(c) and 9.407-3(c), matters in opposition may be presented in person, in writing, or through a representative. Matters in opposition may be presented through any combination of the foregoing methods, but if a contractor desires to present matters in person or through a representative, any written material should be delivered at least 5 working days in advance of the presentation. Usually, all matters in opposition are presented in a single proceeding. A contractor who becomes aware of a pending indictment or allegations of wrongdoing that the contractor believes may lead to suspension or debarment action may contact the debarring and suspending official or designee to provide information as to the contractor’s present responsibility.
(b) An in-person presentation is an informal meeting, nonadversarial in nature. The debarring and suspending official and/or other agency representatives may ask questions of the contractor or its representative making the presentation. The contractor may select the individuals who will attend the meeting on the contractor’s behalf; individual respondents or principals of a business firm respondent may attend and speak for themselves.
(c) In accordance with FAR 9.406-3(c) and 9.407-3(c), the contractor may submit matters in opposition within 30 days from receipt of the notice of suspension or proposed debarment.
(d) The opportunity to present matters in opposition to debarment includes the opportunity to present matters concerning the duration of the debarment.
(a) The debarring and suspending official will determine whether the contractor’s presentation has raised a genuine dispute of material fact(s). If the debarring and suspending official has decided against debarment or continued suspension, or the provisions of FAR 9.4 preclude fact-finding, no fact-finding will be conducted. If the debarring and suspending official has determined a genuine dispute of material fact(s) exists, a designated fact-finder will conduct the fact-finding proceeding. The proceeding before the fact-finder will be limited to a finding of the facts in dispute as determined by the debarring and suspending official.
(b) The designated fact-finder will establish the date for a fact-finding proceeding, normally to be held within 45 working days of the contractor’s presentation of matters in opposition. An official record will be made of the fact-finding proceeding.
(c) The Government’s representative and the contractor will have an opportunity to present evidence relevant to the facts at issue. The contractor may appear in person or through a representative in the fact-finding proceeding.
(d) Neither the Federal Rules of Evidence nor the Federal Rules of Civil Procedure govern fact-finding. Hearsay evidence may be presented and will be given appropriate weight by the fact-finder.
(e) Witnesses may testify in person. Witnesses will be reminded of the official nature of the proceeding and that any false testimony given is subject to criminal prosecution. Witnesses are subject to cross-examination.
H-105 Timing requirements.
All timing requirements set forth in these procedures may be extended by the debarring and suspending official for good cause.
H-106 Subsequent to fact-finding.
(a) Written findings of fact will be prepared by the fact-finder as mandated by FAR 9.406-3(d)(2)(i) and 9.407-3(d)(2)(i).
(b) The fact-finder will determine the disputed fact(s) by a preponderance of the evidence. A copy of the findings of fact will be provided to the debarring and suspending official, the Government’s representative, and the contractor.
(c) The debarring and suspending official will determine whether to continue the suspension or to debar the contractor based upon the entire administrative record, including the findings of fact.
(d) Prompt written notice of the debarring and suspending official’s decision will be sent to the contractor and any affiliates involved, in compliance with FAR 9.406-3(e) and 9.407-3(d)(4).
APPENDIX I - POLICY AND PROCEDURES FOR THE DOD PILOT MENTOR-PROTEGE PROGRAM
(a) This appendix I implements the Pilot Mentor-Protege Program (Program) established under section 831 of the National Defense Authorization Act for Fiscal Year 1991 (Pub. L. 101-50; 10 U.S.C. 2302 note). 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.
(b) Under the Program, eligible companies approved as mentor firms will enter into mentor-protege agreements with eligible protege firms to provide appropriate developmental assistance to enhance the capabilities of the protege firms to perform as subcontractors and suppliers. DoD may provide the mentor firm with either cost reimbursement or credit against applicable subcontracting goals established under contracts with DoD or other Federal agencies.
(c) DoD will measure the overall success of the Program by the extent to which the Program results in—
(1) An increase in the dollar value of contract and subcontract awards to protege firms (under DoD contracts, contracts awarded by other Federal agencies, and commercial contracts) from the date of their entry into the Program until 5 years after the conclusion of the agreement;
(2) An increase in the number and dollar value of subcontracts awarded to a protege firm (or former protege firm) by its mentor firm (or former mentor firm); and
(3) An increase in protégé participation in DoD science and technology programs; and
(4) An increase in job creation of protégé firms from the date of execution of the mentor-protégé agreement until 5 years after completion of the mentor-protégé agreement.
(d) This policy sets forth the procedures for participation in the Program applicable to companies that are interested in receiving—
(1) Reimbursement through a separate contract line item in a DoD contract or a separate contract with DoD; or
(2) Credit toward applicable subcontracting goals for costs incurred under the Program.
As used in this appendix—
"Affiliation" means, with respect to a relationship between a mentor firm and a protege firm, a relationship described under 13 CFR 121.103.
"Eligible entity employing the severely disabled" means a business entity operated on a for-profit or nonprofit basis that—
(1) Uses rehabilitative engineering to provide employment opportunities for severely disabled individuals and integrates severely disabled individuals into its workforce;
(2) Employs severely disabled individuals at a rate that averages not less than 20 percent of its total workforce;
(3) Employs each severely disabled individual in its workforce generally on the basis of 40 hours per week; and
(4) Pays not less than the minimum wage prescribed pursuant to section 6 of the Fair Labor Standards Act (29 U.S.C. 206) to those employees who are severely disabled individuals.
"Severely disabled individual" means 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—
(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;
(iii) Is not on a Federal list of debarred or suspended contractors; and
(iv) Is an other than small business concern, unless approved by the Director of the Office of Small Business Programs (OSBP), Office of the Under Secretary of Defense, Acquisition and Sustainment (OUSD(A&S)), in accordance with 13 CFR 121.103 regarding “affiliation and relationship”; and
(3) Be capable of imparting value to a protege 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 a prime contractor to DoD with an active subcontracting plan; or
(iii) 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 protege, an entity must be—
(1) A small business concern;
(2) Eligible for the award of Federal contracts;
(3) Not more than 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 protege'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 protege is ineligible, assistance that the mentor firm furnishes to the protege after the date of the determination may not be considered assistance furnished under the Program.
(e) A mentor firm may not enter into an agreement with a protege firm if SBA has made a determination of affiliation. If SBA has not made such a determination and if the DoD (OSBP) has reason to believe, based on SBA’s regulations regarding affiliation, that the mentor firm is affiliated with the protege firm, then DoD OSBP will request a determination regarding affiliation from SBA.
(f) A company may not be approved for participation in the Program as a mentor firm if, at the time of requesting participation in the Program, it is currently debarred or suspended from contracting with the Federal Government pursuant to FAR subpart 9.4.
(g) If the mentor firm is suspended or debarred while performing under an approved mentor-protege agreement, the mentor firm—
(1) May continue to provide assistance to its protege firms in accordance with the approved mentor-protege agreement entered into prior to the imposition of such suspension or debarment;
(2) May not be reimbursed or take credit for any costs of providing developmental assistance to its protege firm, incurred more than 30 days after the imposition of such suspension or debarment; and
(3) Must promptly give notice of its suspension or debarment to its protege firm and the Director, OSBP, of the cognizant military department or defense agency.
(h) Within 30 days of any change in status affecting eligibility, mentors and protégés must give notice and explanation of pertinent facts to each other, the Director of OSBP, OUSD(A&S), and the Director, OSBP, of the military department or defense agency.
I-103 Program duration.
(a) New mentor-protege agreements may be submitted and approved through September 30, 2024.
(b) Mentors incurring costs through September 30, 2026, pursuant to an approved mentor-protege agreement, may be eligible for—
(1) Credit toward the attainment of its applicable subcontracting goals for unreimbursed costs incurred in providing developmental assistance to its protege firm(s);
(2) Reimbursement pursuant to the execution of a separately priced contract line item added to a contract; or
(3) Reimbursement pursuant to entering into a separate DoD contract upon determination by the Director, OSBP, of the cognizant military department or defense agency that unusual circumstances justify using a separate contract.
I-104 Selection of protege firms.
(a) Mentor firms will be solely responsible for selecting protege 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.
(b) The selection of protege firms by mentor firms may not be protested, except as in paragraph (c) of this section.
(c) Any interested party may file a protest of the selection of a protégé firm directly with the Director, OSBP, OUSD(A&S) or the Director, OSBP, of the cognizant military department or defense agency. In the event of a protest regarding the size or status of an entity selected to be a protege firm, the Director, OSBP, OUSD(A&S), or the Director, OSBP, of the military department or defense agency must refer the protest to the SBA to resolve in accordance with 13 CFR Part 121 (with respect to size) or other parts of title 13 of the CFR or this appendix (with respect to the protégé’s socioeconomic status). The Director, OSBP, OUSD(A&S), or the Director, OSBP, of the military department or defense agency shall decide protests concerning all other aspects of a protégé’s eligibility for the Program (e.g., nontraditional defense contractor or entity employing the severely disabled).
(d) For purposes of the Small Business Act, no determination of affiliation or control (either direct or indirect) may be found between a protege firm and its mentor firm on the basis that the mentor firm has agreed to furnish (or has furnished) to its protege firm, pursuant to a mentor-protege agreement, any form of developmental assistance described in I-106(d).
(e) A protege firm may not be a party to more than one DoD mentor-protege agreement at a time, and may only participate in the Program during the 5-year period beginning on the date the protege firm enters into its first mentor-protege agreement.
I-105 Mentor approval process.
(a) An entity seeking to participate as a mentor must apply to the Mentor-Protégé Program Director, OSBP, OUSD(A&S), to establish its initial eligibility as a mentor.
(b) The application must provide the following information:
(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.
(2) A summary of the entity’s historical and recent activities and accomplishments under its small and disadvantaged business utilization program.
(3) The total dollar amount of DoD contracts and subcontracts that the entity received during the 2 preceding fiscal years. (Show prime contracts and subcontracts separately per year.)
(4) The total dollar amount of all other Federal agency contracts and subcontracts that the entity received during the 2 preceding fiscal years. (Show prime contracts and subcontracts separately per year.)
(5) The total dollar amount of subcontracts that the entity awarded under DoD contracts during the 2 preceding fiscal years.
(6) The total dollar amount of subcontracts that the entity awarded under all other Federal agency contracts during the 2 preceding fiscal years.
(7) The total dollar amount and percentage of subcontracts that the entity awarded to firms qualifying under I-102(b)(5)(i) through (vii) 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.
(8) Information on the company’s ability to provide developmental assistance to its eligible proteges.
(c) A template of the mentor application is available at: https://business.defense.gov/Programs/Mentor-Prot%C3%A9g%C3%A9-Program/MPP-Resources/ .
(d) Companies that apply for participation and are not approved will be provided the reasons and an opportunity to submit additional information for reconsideration.
I-106 Development of mentor-protege agreements.
(a) Prospective mentors and their proteges may choose to execute letters of intent prior to negotiation of mentor-protege agreements.
(b) The agreements should be structured after completion of a preliminary assessment of the developmental needs of the protege firm and mutual agreement regarding the developmental assistance to be provided to address those needs and enhance the protege’s ability to perform successfully under contracts or subcontracts.
(c) A mentor firm may not require a protege firm to enter into a mentor-protege agreement as a condition for award of a contract by the mentor firm, including a subcontract under a DoD contract awarded to the mentor firm.
(d) The mentor-protege agreement may provide for the mentor firm to furnish any or all of the following types of developmental assistance:
(1) Assistance by mentor firm personnel in—
(i) General business management, including organizational management, financial management, and personnel management, marketing and technology commercialization, compliance systems, and overall business planning;
(ii) Engineering and technical matters such as production inventory control and quality assurance; acquisition or transfer of hardware, tooling, or software; and technology transfer and transition; and
(iii) Any other assistance designed to develop the capabilities of the protege firm under the developmental program described in I-107(g).
(2) Award of subcontracts to the protege firm under DoD contracts or other contracts on a noncompetitive basis.
(3) Payment of progress payments for the performance of subcontracts by a protege firm in amounts as provided for in the subcontract; but in no event may any such progress payment exceed 100 percent of the costs incurred by the protege firm for the performance of the subcontract. Provision of progress payments by a mentor firm to a protege firm at a rate other than the customary rate for the firm must be implemented in accordance with FAR 32.504(c).
(4) Advance payments under such subcontracts. The mentor firm must administer advance payments in accordance with FAR subpart 32.4 .
(6) Assistance that the mentor firm obtains for the protege firm from one or more of the following:
(i) Small Business Development Centers established pursuant to section 21 of the Small Business Act (15 U.S.C. 648).
(ii) Entities providing procurement technical assistance pursuant to 10 U.S.C. Chapter 142 (Procurement Technical Assistance Centers).
(iii) Historically Black colleges and universities.
(iv) Minority institutions of higher education.
(v) Women’s business centers described in section 29 of the Small Business Act (15 U.S.C. 656).
(e) Pursuant to FAR 31.109, approved mentor firms seeking either reimbursement or credit are strongly encouraged to enter into an advance agreement with the contracting officer responsible for determining final indirect cost rates under FAR 42.705. The purpose of the advance agreement is to establish the accounting treatment of the costs of the developmental assistance pursuant to the mentor-protege agreement prior to the incurring of any costs by the mentor firm. An advance agreement is an attempt by both the Government and the mentor firm to avoid possible subsequent dispute based on questions related to reasonableness, allocability, or allowability of the costs of developmental assistance under the Program. Absent an advance agreement, mentor firms are advised to establish the accounting treatment of such costs and to address the need for any changes to their cost accounting practices that may result from the implementation of a mentor-protege agreement, prior to incurring any costs, and irrespective of whether costs will be reimbursed or credited.
(f) Developmental assistance provided under an approved mentor-protege agreement is distinct from, and must not duplicate, any effort that is the normal and expected product of the award and administration of the mentor firm's subcontracts. Costs associated with the latter must be accumulated and charged in accordance with the contractor's approved accounting practices; they are not considered developmental assistance costs eligible for either credit or reimbursement under the Program.
(g) The agreement shall demonstrate, through its execution, how it will contribute to the overall mission of DoD and/or fill or address an identified critical gap or vulnerability. Focus areas include, but are not limited to, manufacturing, research and development, and knowledge-based services.
I-107 Elements of a mentor-protege agreement.
Each mentor-protege agreement shall contain—
(a) The name, address, email address, and telephone number of the mentor and protege points of contact;
(b) The NAICS code(s) that represent the contemplated supplies or services to be provided by the protege firm to the mentor firm and a statement that, at the time the agreement is submitted for approval, the protege firm does not exceed the size standard in I-102(b)(3);
(c) A statement that the protege firm is eligible to participate in accordance with I-102(b);
(d) A statement that the mentor is eligible to participate in accordance with I-102(a);
(e) Assurances that—
(1) The mentor firm does not share, directly or indirectly, with the protege firm ownership or management of the protege firm;
(2) The mentor firm does not have an agreement, at the time the mentor firm enters into a mentor-protege agreement, to merge with the protege 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 protege firm;
(4) The mentor firm has not, during the 2-year period before entering into a mentor-protege agreement, employed any officer, director, principal stock holder, managing member, or key employee of the protege firm;
(5) The mentor firm has not engaged in a joint venture with the protege firm during the 2-year period before entering into a mentor-protege 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 protege 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 protege firm;
(g) A developmental program for the protege firm, including—
(1) The type of assistance the mentor will provide to the protege and how that assistance will—
(i) Increase the protege’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 proteges or other small business firms are not dominant in the company’s vendor base;
(2) Factors to assess the protege 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 protege firm can compete outside the Program;
(h) The assistance the mentor will provide to the protege firm in understanding Federal contract regulations, including the FAR and DFARS, after award of a subcontract under the Program, if applicable;
(i) An estimate of the dollar value and type of subcontracts that the mentor firm will award to the protege firm, and the period of time over which the subcontracts will be awarded;
(j) A statement from the protege firm indicating its commitment to comply with the requirements for reporting and for review of the agreement during the duration of the agreement and for 5 years thereafter;
(k) A program participation term for the agreement that does not exceed 2 years. Requests for an extension of the agreement for a period not to exceed an additional 3 years are subject to the approval of the Director, OSBP, of the cognizant military department or defense agency. The justification must detail the unusual circumstances that warrant a term in excess of 2 years;
(l) Procedures for the mentor firm to notify the protege firm in writing at least 30 days in advance of the mentor firm's intent to voluntarily withdraw its participation in the Program. A mentor firm may voluntarily terminate its mentor-protege agreement(s) only if it no longer wants to be a participant in the Program as a mentor firm. Otherwise, a mentor firm must terminate a mentor-protege agreement for cause;
(m) Procedures for the mentor firm to terminate the mentor-protege agreement for cause which provide that—
(1) The mentor firm must furnish the protege firm a written notice of the proposed termination, stating the specific reasons for such action, at least 30 days in advance of the effective date of such proposed termination;
(2) The protege firm must have 30 days to respond to such notice of proposed termination, and may rebut any findings believed to be erroneous and offer a remedial program;
(3) Upon prompt consideration of the protege firm's response, the mentor firm must either withdraw the notice of proposed termination and continue the protege firm's participation, or issue the notice of termination; and
(4) The decision of the mentor firm regarding termination for cause, conforming with the requirements of this section, will be final and is not reviewable by DoD;
(n) Procedures for a protege firm to notify the mentor firm in writing at least 30 days in advance of the protege firm's intent to voluntarily terminate the mentor-protege agreement;
(o) Additional terms and conditions as may be agreed upon by both parties; and
(p) Signatures and dates for both parties to the mentor-protege agreement.
I-108 Submission and approval of mentor-protege agreements.
(a) Upon solicitation or as determined by the cognizant military department or defense agency, mentors will submit—
(1) A mentor application pursuant to I-105, if the mentor has not been previously approved to participate;
(2) A signed mentor-protege agreement pursuant to I-107;
(3) A statement as to whether the mentor is seeking credit or reimbursement of costs incurred;
(4) The estimated cost of the technical assistance to be provided, broken out per year;
(5) A justification if program participation term is greater than 2 years (Term of agreements may not exceed 5 years)(see I-107(k)); and
(6) For reimbursable agreements, a specific justification for developmental costs in excess of $1 million per year.
(b) When seeking reimbursement of costs, the military department or defense agency may require additional information.
(c) The mentor-protege agreement must be approved by the Director, OSBP, of the military department or defense agency prior to incurring costs eligible for credit.
(d) The cognizant military department or defense agency will execute a contract modification or a separate contract, if justified pursuant to I-103(b)(3), prior to the mentor’s incurring costs eligible for reimbursement.
(e) Credit agreements that are not associated with an existing DoD program and/or military department or defense agency will be submitted for approval to the Director, OSBP, Defense Contract Management Agency (DCMA), via the mentor’s cognizant administrative contracting officer.
(f) A prospective mentor that has identified Program funds to be made available from a DoD program manager must provide the information in paragraph (a) of this section through the program manager to the Director, OSBP, of the military department or defense agency with a letter signed by the program manager indicating the amount of funding that has been identified for the developmental assistance program.
I-109 Reimbursable agreements.
The following provisions apply to all reimbursable mentor-protege agreements including agreements that provide for both reimbursement and subcontracting credit:
(a) Assistance provided in the form of progress payments to a protege firm in excess of the customary progress payment rate for the firm will be reimbursed only if implemented in accordance with FAR 32.504(c).
(b) Assistance provided in the form of advance payments will be reimbursed only if the payments have been provided to a protege firm under subcontract terms and conditions similar to those in the clause at FAR 52.232-12, Advance Payments. Reimbursement of any advance payments will be made pursuant to the inclusion of the clause at DFARS 252.232-7005, Reimbursement of Subcontractor Advance Payments—DoD Pilot Mentor-Protege Program, in appropriate contracts. In requesting reimbursement, the mentor firm agrees that the risk of any financial loss due to the failure or inability of a protege firm to repay any unliquidated advance payments will be the sole responsibility of the mentor firm.
(c) The primary forms of developmental assistance authorized for reimbursement under the Program are identified in I-106(d). On a case-by-case basis, Directors, OSBP, of the military departments or defense agencies at their discretion, may approve additional incidental expenses for reimbursement, provided these expenses do not exceed 10 percent of the total estimated cost of the agreement.
(d) The total amount reimbursed to a mentor firm for costs of assistance furnished to a protege firm in a fiscal year may not exceed $1 million unless the Director, OSBP, of the military department or defense agency determines in writing that unusual circumstances justify reimbursement at a higher amount. Request for authority to reimburse in excess of $1 million must detail the unusual circumstances and must be endorsed and submitted by the program manager to the Director, OSBP, of the military department or defense agency.
(e) DoD may not reimburse any fee to the mentor firm for services provided to the protege 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 protege firm.
(f) Developmental assistance costs that are incurred pursuant to an approved reimbursable mentor-protege agreement, and have been charged to, but not reimbursed through, a separate contract, or through a separately priced contract line item added to a DoD contract, will not be otherwise reimbursed, as either a direct or indirect cost, under any other DoD contract, irrespective of whether the costs have been recognized for credit against applicable subcontracting goals.
I-111 Agreement terminations.
(a) Mentors and/or proteges must send a copy of any termination notices to the Director, OSBP, of the cognizant military department or defense agency that approved the agreement, and the DCMA small business professional responsible for conducting the annual review pursuant to I-113.
(b) For reimbursable agreements, mentors must also send copies of any termination to the program manager and to the contracting officer.
(c) Termination of a mentor-protege agreement will not impair the obligations of the mentor firm to perform pursuant to its contractual obligations under Government contracts and subcontracts.
(d) Termination of all or part of the mentor-protege agreement will not impair the obligations of the protege firm to perform pursuant to its contractual obligations under any contract awarded to the protege firm by the mentor firm.
(e) Mentors and proteges will follow provisions of the mentor-protege agreement developed in compliance with I-107(l) through (n).
(f) The Director, OSBP, OUSD(A&S) or the Director, OSBP, of the military department or defense agency is authorized to terminate the mentor-protégé agreement for the convenience of the Government (to include national security grounds, funding limits, statutory requirements, or other considerations), as well as for cause upon written findings (e.g., either of the participants’ failure to perform or provide adequate assurance of performance; failure to comply with laws, regulations, and policies; conflicts of interest; or default under any provisions of a DoD contract or agreement).
I-113 Performance reviews.
DCMA will conduct annual performance reviews of the progress and accomplishments realized under approved mentor-protege agreements. These reviews must verify data provided on the semiannual reports and must provide information as to—
(a) Whether all costs reimbursed to the mentor firm under the agreement were reasonably incurred to furnish assistance to the protege in accordance with the mentor-protege agreement and applicable regulations and procedures; and
(b) Whether the mentor and protege accurately reported progress made by the protege in employment, revenues, and participation in DoD contracts during the Program participation term and for 5 fiscal years following the expiration of the Program participation term.