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International Space Station
International Space Station (ISS)

The Space Vehicle        . . . . .on Main Street

Part Three

See also:
The Space Vehicle on Main Street -- Part One
The Space Vehicle on Main Street -- Part Two
Federal grants are an overlooked option for bootstrapping startups
          by Robert A. Adelson, Esquire

          Fear -- often unfounded -- of burdensome paperwork, red tape, and labyrinthine specifications and regulations is the principal reason smaller businesses and entrepreneurs are hesitant to pursue contracts with the Federal government. An imaginative initiative to dispel these fears has been launched by the National Aeronautics and Space Administration (NASA) -- the Mentor-Protégé Program. This program is spearheaded by NASA’s Office of Small and Disadvantaged Business Utilization (OSDBU), Ralph C. Thomas III, Associate Administrator.

          The NASA Mentor-Protégé Program has been established to increase the overall participation of high-tech small disadvantaged businesses (SDBs) in NASA contracts and subcontracts. Further, the Program is designed to foster the creation of long-term associations between these smaller businesses and major NASA prime contractors. Prime contractors are being encouraged to help these smaller businesses strengthen their capabilities to perform NASA contracts and subcontracts, specifically in non-traditional industries. The Mentor-Protégé Program was published as a Final Rule in the Federal Register on March 24, 1995. NASA is actively encouraging prime contractors to participate in this Program with small disadvantaged businesses.

          The regulations concerning the Mentor-Protégé Program are codified in the Code of Federal Regulations, 48 CFR, Chapter 18; this is available in its entirety on a subscription basis from the Superintendent of Documents, Government Printing Office, Washington, DC 20402 (GPO Subscription Stock Number 933-003-00000-1). The pertinent regulations are embodied in Part 1819 to which §1819.72 (The NASA Mentor-Protégé Program) has been added, and Part 1852 to which §1852.219-77, §1852.219-78, and §1852.219.79 have been added.

          Of course, these regulations spell out all aspects of this three-year pilot program from Eligibility and Requirements through Selection and Agreements to the unavoidable Reports, Program Review, and Prime Contractor Evaluation. Let’s look at some of the highlights.

          A contemplated affiliation can be initiated by either the prospective mentor or the prospective protégé; partners are never forced upon each other. However, the final application must be submitted by the prospective Mentor to NASA. The agreements between the parties are worked out by themselves (in conformance with 48 CFR 1819.7213), obviously subject to acceptance by NASA. A prime contractor may serve as mentor to more than one protégé subcontractor working under separate subcontracts at the same time. Similarly, a protégé subcontractor working under separate subcontracts can have more than one mentor at the same time.

          The attractions of this pilot program to prime contractors is (a) it can enhance their eligibility doing major source selections, and (b) a separate 5 percent of the 15 percent award fee under cost-plus-award fee contracts is allocated to an approved mentor for SDB Utilization.

          Most attractively, the forms of developmental assistance a Mentor can provide to a Protégé include:

  1. Management guidance relating to --
    • Financial management
    • Organizational management
    • Overall business management/planning, and
    • Business development;
  2. Engineering and other technical assistance;
  3. Noncompetitive award of subcontracts under NASA contracts;
  4. Progress payments based on costs. The customary progress payment rate for all NASA contracts with small disadvantaged businesses is 95 percent. This customary progress payment rate for small disadvantaged businesses may be used by prime contractors;
  5. Advance payments. While a mentor can make advance payments to its protégés who are performing as subcontractors, the mentor will only be reimbursed by NASA for these costs if advance payments have been authorized in accordance with statute and regulation;
  6. Loans;
  7. Rent-free use of facilities and/or equipment;
  8. Property; and
  9. Temporary assignment of personnel to protégé for purpose of training.

          The owner/manager of the smaller business and the entrepreneur may find the NASA Mentor-Protégé Program is an excellent way to become a knowledgeable subcontractor with the Federal government. For more information about this program, one should contact OSDBU via email (for an immediate response):


If preferred, write to (allow 2 weeks for reply):

NASA Office of Small and Disadvantaged Business Utilization
NASA Headquarters, (Code K)
300 E Street, SW
Washington, DC 20546

Attn: Rae C. Martel / Mentor-Protégé Program Manager

Your comments and suggestions for these pages are most welcomed!

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