SBAs All Small MentorProtg Program Presenters Ed De

SBA’s All Small Mentor-Protégé Program Presenters: Ed De. Lisle, Esq. 1

SBA’s All Small Mentor-Protégé Program Ed De. Lisle 267. 338. 1319 edelisle@offitkurman. com John Amabile 540 -220 -2988 www. planandprepare. com Joel Kunza 800 -685 -3086 www. nationalrecoveries. com

PURPOSE • Single, all-inclusive mentor-protégé program for non-8(a) relationships (not to the exclusion of 8(a) companies) • The Small Business Jobs Act of 2010 and the National Defense Authorization Act (“NDAA”) for fiscal year 2013 provide authority for the all small business mentor-protégé program • “The small business mentor-protégé program is designed to enhance the capabilities of protégé firms by requiring approved mentors to provide business development assistance to protégé firms and to improve the protégé firms’ ability to successfully compete for federal contracts. ”

FRAMEWORK • SBA created a new regulation, 13 C. F. R 125. 9, to govern the small business mentor-protégé program • 13 C. F. R 125. 9 is modeled after the SBA 8(a) mentor-protégé program (13 C. F. R. 124. 520) – 8(a) mentor-protégé program remains completely separate (for now) • Written mentor-protégé agreement required • A single mentor-protégé agreement “may not exceed three years, but may be extended for a second three years. ”

FRAMEWORK • Generally, a mentor will have no more than one protégé at a time – However, the “SBA may authorize a concern to mentor more than one protégé at a time where it can demonstrate that the additional mentor-protégé relationship will not adversely affect the development of either protégé firm (e. g. , the second firm may not be a competitor of the first firm). ” – Mentors may not have more than 3 protégés at one time in the aggregate under both the 8(a) and small business mentor-protégé programs.

FRAMEWORK • Generally, a protégé may have only one mentor at a time – SBA may approve a second mentor for a particular protégé firm where the second relationship will not compete of otherwise conflict with the assistance set forth in the first mentor-protégé relation ship and: • • The second relationship pertains to an unrelated NAICS code; or The protégé firm is seeking to acquire a specific expertise that the first mentor does not posses • The SBA may authorize a small business to be both a protégé and a mentor at the same time where the small business can show that the second relationship will not compete or conflict with the first relationship.

MENTOR REQUIREMENTS • Mentors may be large or small businesses • May submit to the SBA copies of its federal tax returns, audited financial statements, or filing required by the SEC • Must demonstrate that: – – It is capable of carrying out its responsibilities to assist the protégé firm under the proposed mentor-protégé agreement It possesses good character It is not on the federal list debarred or suspended contractors; and It can impart value to a protégé firm

PROTÉGÉ REQUIREMENTS • To be a protégé, a concern must qualify as small for the size standard corresponding to its primary NAICS coding or identify that it is seeking business development assistance with respect to a secondary NAICS code and qualify as small for the size standard corresponding to that NAICS code – • For qualification in a secondary NAICS code, the firm must demonstrate how the mentor-protégé relationship is a logical business progression for the firm and will further develop or expand current capabilities. May self-certify that it qualifies as small for its primary or secondary NAICS code – SBA may examine SDVOSB and WOSB status of firm seeking to be a protégé

BENEFITS • A protégé and mentor may joint venture as a small business for any government prime contract or subcontract, provided the protégé qualifies as small for the procurement. – The joint venture may seek any type of small business contract (i. e. , small business set-aside, 8(a), HUBZone, SDVO, or WOSB) for which the protégé firm qualifies – SBA must approve the mentor-protégé agreement before the two firms may submit an offer as a joint venture on a particular government prime contract or subcontract in order for the joint venture to receive the exclusion from affiliation – In order to receive the exclusion from affiliation, the joint venture must meet the requirements set forth in the SBA regulations

BENEFITS • A change in the protégé’s size status does not generally affect contracts previously awarded to a joint venture between the protégé and its mentor, BUT once protégé is otherwise “large, ” it is treated as large, impacting eligibility. – – “Except for contracts with durations of more than five years (including options), a contract awarded to a small business mentor-protégé joint venture… continues to qualify as an award to small business for the Life of that contract, and the joint venture remains obligated to continue performance…” “For contracts with durations of more than five years (including options), where recertification is required…, once the protégé no longer qualifies as small for the size standard corresponding to its primary NAICS code, the joint venture must aggregate the receipts/employees of the partners to the joint venture in determining whether it continue to qualify as an ca re-certify itself as s small business under the size standard corresponding to the NAICS code assigned to that contract. ”

BENEFITS • In order to raise capital, the protégé firm may agree to sell or otherwise convey to the mentor an equity interest of up to 40% in the protégé firm • A protégé firm may still qualify for small business assistance, such as SBA financial assistance, notwithstanding the mentor-protégé relationship • No determination of affiliation of control may be found between a protégé firm and its mentor based solely on the mentor-protégé agreement or any assistance provided pursuant to the agreement. – However, affiliation may still be found for other reasons pursuant to the SBA’s affiliation regulations

National Recoveries, Inc. has been providing debt collection services to clients nationwide since 1991. National Recoveries has experienced and professional collection staff, designed a collection process focused on quality assurance, training, consumer satisfaction, and high level returns, and heavily invested in collection technology. Procedures and specialized techniques set National Recoveries apart from other debt collection firms in the industry. We are different because our agency is primarily focused on customer service and delivering complete satisfaction to both clients and consumers. National Recoveries’ collection experience is 90% campus-based receivables, defaulted Title IV loans, institution loans, and federally defaulted student loans. We are committed to our mission of providing the highest level of customer service and collection returns for our clients. NAICS Code: 561440 - Debt Collection National Recoveries, Inc. 800 -685 -3086 www. nationalrecoveries. com

U. S. Department of Education Contract 2007 2009 In 2009, the U. S. Department of Education In 2007, National Recoveries (Federal Student Aid) selected National (Protégé) performed Recoveries, Inc. to perform debt collection subcontracting services under services for delinquent higher education Financial Management Systems accounts on the 2008 PCA Task Order. (Mentor). During this Mentor. This award signified a long-term Protégé relationship, National partnership with ED and reinforced Recoveries learned the process of National Recoveries’ vision to become one ED collections and began it’s of the best PCAs in the industry. journey on the contract. 2014 In 2014, National Recoveries was again awarded a contract on the 2015 ED Task Order. National Recoveries continued to increase collection revenue for the client and establish itself as one of the top performing PCAs on the contract. 2019 Today, National Recoveries continues to service the ED contract and generate revenue to a long-standing client. The company remains focused on providing high level costumer service and working with each consumer individually to find resolution.

Mentor-Protégé Program and Small Business Subcontracting Highlights At the start of the 2015 ED Task Order, National Recoveries implemented a Mentor-Protégé Program itself to meet FSA requirements and began building strategic partnerships with service-disabled veteran-owned, womenowned, small disadvantaged, and HUBZone small businesses certified under the SBA. Under FSA guidelines, National Recoveries designates 15. 17% of revenue to the Small Business Subcontractors. Since 2017, NRI has achieved amazing results for our small business partners, including near $14 M in revenues to small businesses or 19. 67% of revenue Our SB Partners v. Asset Discovery Corporation (WOSB) was awarded a subcontract with National Recoveries in September, 2016. v. Oneida Business Enterprises (HUBZone) was chosen as a second subcontractor for National Recoveries in November, 2016 v. Emergency Planning Management (DSB and SDVOSB) was selected as a third subcontractor for National Recoveries in November, 2017. v. NRI DOES NOT subcontract with any ‘other than” large firms.

Revenue Growth Since 2006, National Recoveries has been building its strategic client partnerships and increasing collection revenue, all while remaining committed to consumer and client satisfaction. Yearly Revenue $70, 000. 00 Revenue Generated $60, 000. 00 $50, 000. 00 $40, 000. 00 $30, 000. 00 $20, 000. 00 $10, 000. 00 $0. 00 2006 2007 2008 2009 2010 2011 2012 2013 Year 2014 2015 2016 2017 2018

Teaming: SBA All Small Mentor-Protégé Program Emergency Planning Management Inc. – Protégé National Recoveries, Inc. – Mentor

Emergency Planning Management Inc. (DBA-EPM) is a federal government contract service provider demonstrating professionalism, knowledge, and team building expertise, delivering results, and positioning our client’s interests as the foundation of our business. EPM’s experience, which spans over twelve years, as both a prime and subcontractor, has always resulted in optimum service, turn-key solutions, and high performance ratings. EPM is a Small Business Administration (SBA) certified Small Disadvantaged Business (Minority. Owned), a recent graduate of the 8(a) Small Business Development Program, and a Department (Dept. ) of Veteran’s Affairs – Center for Verification and Evaluation verified Service Disabled Veteran Owned Small Business (SDVOSB), with a history of successful performance serving the Dept. of Veterans Affairs, Dept. of the Army, Dept. of the Navy – Naval Facilities Engineering Command, Defense Logistics Agency, Dept. of the Air Force, Dept. of Education, Dept. of the Interior, Dept. of Defense – Missile Defense Agency, Dept. of Agriculture, Dept. of Health and Human Services – National Institutes of Health, Pretrial Services Agency, and the Air National Guard. EPM’s government contract focus is in Personnel & Management, Record Management Services, and Technology Solutions & Support. Emergency Planning Management Inc. - Telephone# 703 -621 -2113 - www. planandprepare. com

Relationship Building (Trust – Values – Loyalty – Integrity): • January 2016, EPM initially learned about National through their posting on the SBA’s Subcontracting Network http: //web. sba. gov/subnet • National was looking to partner with certified SDVOSB, Disadvantaged, Women-Owned, and HUB Zone small businesses on their awarded Dept. of Education, Defaulted Student Loan contract • The relationship began with an EPM phone call to the National point of contact; • The relationship progressed with telephone discussions between EPM’s Chief Operating Officer and National’s Vice President of Compliance & Regulatory Management • A courtship between National and EPM began in order to learn more about each other. During this courtship, over 70 various company documents and whitepapers were provided by EPM Emergency Planning Management Inc. - Telephone# 703 -621 -2113 - www. planandprepare. com

Relationship Building (continued): • March 2016, EPM signs National’s Non-disclosure Agreement • April 2016, EPM executives meet National executives and operational leadership in Minnesota. Following the meeting, National presents EPM with a Draft Subcontracting Agreement • August 2016, National begins EPM’s background checks of executives • December 2016, EPM signs National’s Subcontracting Agreement and begins partnership as an SDVOSB and Small Disadvantaged Business Emergency Planning Management Inc. - Telephone# 703 -621 -2113 - www. planandprepare. com

Teamwork and Accomplishments: • December 2016, EPM hired a Manager and its first employee, both working on the Dept. of Education contract • December 2016, EPM took responsibility of National’s subcontracted vendor support Fed. Ex account • January 2017, EPM began staffing its first Document Servicing Dept. in support of National’s debt collection servicing operations • January 2017, National partnered with two other small businesses- ADC, a woman-owned small business and OBE, a HUB Zone small business • February 2017, EPM stood-up its second Document Servicing Dept. • March 2017, EPM stood-up its Funding Servicing Dept. and Auditing Servicing Dept. in support of National’s debt collection servicing operations Emergency Planning Management Inc. - Telephone# 703 -621 -2113 - www. planandprepare. com

Teamwork and Accomplishments (continued): • August 2017, EPM successfully completed two primary and two secondary internal audits completed by National’s Compliance and Regularity Management Dept. • September 2017, EPM and National submitted their All Small Mentor-Protégé Program packet to the SBA • December 2017, EPM’s staffing increased to 28 employees to end their first year • January 2018, the SBA approved both companies into the All Small Mentor-Protégé Program under NAICS Code 561440 • January 2018, EPM stood-up its first front-line debt collection Servicing Dept. and earns its first three debt collection licenses (FL, MN, TX) • January 2018, EPM also began staffing operations in two different MN locations Emergency Planning Management Inc. - Telephone# 703 -621 -2113 - www. planandprepare. com

Present Day Progress: • EPM’s contract revenue increased with NRI 35% from 2017 to 2018, representing growth in staffing, productivity, and responsibility • EPM’s profit increased with NRI 15% from 2017 to 2018 • EPM’s staffing increased to 63 employees in two location in MN, with a third location to open in the Spring • EPM had limited experience in debt collections and has now earned 49 individual required state and city debt collection licenses • EPM now staffs three Document Servicing Dept. a Funding Dept. an Auditing Dept. , and a front-line Wrap-up Servicing Dept. • EPM manages all subcontracted vendor support (I. e. Fed Ex, Box Inc. , and Veritax) Emergency Planning Management Inc. - Telephone# 703 -621 -2113 - www. planandprepare. com

Present Day Progress (continued): • EPM’s performance is evaluated quarterly by National’s Subcontractor Scorecard • EPM created and staffed a Deficiency Administrator that assists National and all subcontractors in coaching shortcomings to improve performance • EPM has implemented numerous efficiencies in Documents and Funding which have positively enhanced productivity in all collection operations • National’s mentorship has resulted in EPM earning debt collection experience and past performance, which resulted in EPM earning another similar debt collections contract in NY Emergency Planning Management Inc. - Telephone# 703 -621 -2113 - www. planandprepare. com

Questions – Discussion Emergency Planning Management Inc. - Telephone# 703 -621 -2113 - www. planandprepare. com

Contact Us John Amabile 540 -220 -2988 www. planandprepare. com Ed De. Lisle 267. 338. 1321 edelisle@offitkurman. com Joel Kunza 800 -685 -3086 www. nationalrecoveries. com