The Real Cost of the FedGov Funded Mentor-Protégé Company

A funded Mentor-Protégé Program can provide you “free money” to fund various corporate activities and resources. However, it’s never as much as they say it is and most of it will fund things that aren’t exactly what you may need. Most importantly, it comes at a cost. Here’s how it works. The program that my company participated was provided about a third of a million dollars per year for our benefit for the three-year funded period of the program. There were two additional years that were not funded, but you are still expected to submit all the paperwork.

Since this program is also intended to benefit Historically Black Colleges and Universities, the mentor will “subcontract” the oversite of various activities to them. Let’s assume the major budget line for a year is CMMI Level III appraisal support. The mentor would then charge against the budget to oversee a Historically Black College as they oversee the hiring and management of the mentor’s internal CMMI consulting team to provide support to the small business over the entire year. Please re-read this paragraph to fully understand the circular lunacy to have one organization oversee another organization as they oversee your organization perform a task. This is where the cost to the small business comes in.

For context, GCA Founder, Randy Wimmer’s company obtained its ISO certification in four months. After already obtaining the very similar ISO 9001 certification, obtaining his company’s CMMI appraisal through the Mentor Protégé Program took over a year with near-constant “administrative reporting.” The opportunity community costs to his company’s corporate staff were staggering.

Most importantly, you must remember this vital fact. The folks in the government small business office, the mentor’s office and the Historically Black College who are being paid to mentor you have almost certainly never been the CEO of a small business. In my particular case, there was only one person in this entire gaggle of “mentors” who had ever had profit & loss responsibility and that was only at the program manager level. Even worse, they had a total lack of context regarding the realities of being a small business. Here’s an example. The multi-billion-dollar corporate mentor recommended that Randy hire a CMMI staff that…wait for it…was larger than his entire existing corporate office!

In summary, a funded Mentor Protégé Program is a great deal, especially if your mentor brings you
along as teaming partners on their bids. Randy’s did not. However, a funded Mentor Protégé Program is not “free.” The opportunity costs of this administratively intensive program are very significant. However, if you are clever in influencing how your funds are being spent then you may mitigate opportunity cost risks and save overhead dollars. Randy quickly learned that these funds were most useful buying software licenses for needed systems, website and marketing costs, and outsourced employee training. Regarding unfunded Mentor Protégé Programs, they provide you all the same marketing benefits with little or no government bureaucracy attached. Of course, you receive no funding, but you also don’t have any significant opportunity costs.