DHS deflects criticism of small biz rules

The Homeland Security Department is defending its small business subcontracting practices against fears that its mentor-protégé program actually may penalize some small businesses.

The remarks are included in a 22-page final rule published in the Federal Register to implement the Homeland Security Acquisition Regulation.

The final rule adopts, with specified changes, an interim rule establishing the acquisition regulation, which supplements the Federal Acquisition Regulation. Both regulations apply to all DHS agencies, with the exception of the Transportation Security Administration.

The rule contains responses to several dozen comments received about the interim rule, including clarifications regarding small business mentor-protégé agreements, Safety Act revisions, inverted domestic corporations and other details.

Regarding mentor-protégé relationships, several interested parties "have expressed concern that the incentives provided to a large contractor participating as a mentor may actually penalize small business subcontractors that do not desire to participate in the program as protégés," the final rule states.

Several commentators, whose identities are not disclosed, asked that the department clarify whether it will allow large contractors to satisfy their small business subcontracting goals solely by assisting protégés.

The Small Business Administration's Office of Advocacy related similar criticisms of the reliance on mentor-protégé relationships in a letter of Jan. 5, 2004, the Federal Register notice said.

In response, DHS said it does not intend to approve any subcontracting plan that solely relies on mentor-protégé agreements, and it disagrees with the idea that a large contractor can fulfill their entire subcontracting plan goals by serving as a mentor.