MENTOR-PROTEGE PROGRAM IMPROVEMENTS.

SEC. 811. MENTOR-PROTEGE PROGRAM IMPROVEMENTS. (a) Program Participation Term.—Subsection (e)(2) of section 831 of the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101–510; 10 U.S.C. 2302 note) is amended to read as follows:113 STAT. 707 “(2) A program participation term for any period of not more than three years, except that the term may be a period of up to five years if the Secretary of Defense determines in writing that unusual circumstances justify a program participation term in excess of three years.”. (b) Incentives Authorized for Mentor Firms.—Subsection (g) of such section is amended— (1) in paragraph (1), by striking “shall” and inserting “may”; (2) in paragraph (2)— (A) in subparagraph (A)— (i) by striking “shall” and inserting “may”; (ii) by striking “subsection (f)” and all that follows through “(i) as a line item” and inserting “subsection (f) as provided for in a line item”; (iii) by striking the semicolon preceding clause (ii) and inserting “, except that this sentence does not apply in a case in which the Secretary of Defense determines in writing that unusual circumstances justify reimbursement using a separate contract.”; and (iv) by striking clauses (ii), (iii), and (iv); and (B) by striking subparagraph (B) and inserting the following: “(B) The determinations made in annual performance reviews of a mentor firm’s mentor-protege agreement under subsection (1)(2) shall be a major factor in the determinations of amounts of reimbursement, if any, that the mentor firm is eligible to receive in the remaining years of the program participation term under the agreement. “(C) The total amount reimbursed under this paragraph to a mentor firm for costs of assistance furnished in a fiscal year to a protege firm may not exceed $1,000,000, except in a case in which the Secretary of Defense determines in writing that unusual circumstances justify a reimbursement of a higher amount.”; and (3) in paragraph (3)(A), by striking “either subparagraph (A) or (C) of paragraph (2) or are reimbursed pursuant to subparagraph (B) of such paragraph” and inserting “paragraph (2)”. (c) Three-Year Extension of Authority.—Subsection (j) of such section is amended to read as follows: “(j) Expiration of Authority.—(1) No mentor-protege agreement may be entered into under subsection (e) after September 30, 2002. “(2) No reimbursement may be paid, and no credit toward the attainment of a subcontracting goal may be granted, under subsection (g) for any cost incurred after September 30, 2005.”. (d) Reports and Reviews.—(1) Subsection (1) of such section is amended to read as follows: “(l) Reports and Reviews.—(1) The mentor firm and protege firm under a mentor-protege agreement shall submit to the Secretary of Defense an annual report on the progress made by the protege firm in employment, revenues, and participation in Department of Defense contracts during the fiscal year covered by the report. The requirement for submission of an annual report applies with respect to each fiscal year covered by the program participation term under the agreement and each of the two fiscal years following 113 STAT. 708the expiration of the program participation term. The Secretary shall prescribe the timing and form of the annual report. “(2)(A) The Secretary shall conduct an annual performance review of each mentor-protege agreement that provides for reimbursement of costs. The Secretary shall determine on the basis of the review whether— “(i) all costs reimbursed to the mentor firm under the agreement were reasonably incurred to furnish assistance to the protege firm in accordance with the requirements of this section and applicable regulations; and “(ii) the mentor firm and protege firm accurately reported progress made by the protege firm in employment, revenues, and participation in Department of Defense contracts during the program participation term covered by the mentor-protege agreement and the two fiscal years following the expiration of the program participation term. “(B) The Secretary shall act through the Commander of the Defense Contract Management Command in carrying out the reviews and making the determinations under subparagraph (A). “(3) Not later than 6 months after the end of each of fiscal years 2000 through 2004, the Secretary of Defense shall submit to Congress an annual report on the Mentor-Protege Program for that fiscal year. “(4) The annual report for a fiscal year shall include, at a minimum, the following: “(A) The number of mentor-protege agreements that were entered into during the fiscal year. “(B) The number of mentor-protege agreements that were in effect during the fiscal year. “(C) The total amount reimbursed to mentor firms pursuant to subsection (g) during the fiscal year. “(D) Each mentor-protege agreement, if any, that was approved during the fiscal year in accordance with subsection (e)(2) to provide a program participation term in excess of 3 years, together with the justification for the approval. “(E) Each reimbursement of a mentor firm in excess of the limitation in subsection (g)(2)(C) that was made during the fiscal year pursuant to an approval granted in accordance with that subsection, together with the justification for the approval. “(F) Trends in the progress made in employment, revenues, and participation in Department of Defense contracts by the protege firms participating in the program during the fiscal year and the protege firms that completed or otherwise terminated participation in the program during the preceding two fiscal years.”. (2)(A) The Secretary of Defense shall conduct a review of the Mentor-Protege Program established in section 831 of the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101–510; 10 U.S.C. 2302 note) to assess the feasibility of transitioning such program to operation without a specific appropriation or authority to provide reimbursement to a mentor firm as provided in subsection (g) of such section (as amended by subsection (b)). (B) In conducting the review under subparagraph (A), the Secretary shall assess possible additional incentives that may be extended to mentor firms to ensure adequate support and participation in the Mentor-Protege Program, including increasing the level 113 STAT. 709of credit in lieu of subcontract awards presently extended to mentor firms for purposes of determining whether mentor firms attain subcontracting participation goals applicable under Department of Defense contracts. (C) Not later than September 30, 2000, the Secretary shall submit to the Committees on Armed Services of the Senate and the House of Representatives— (i) a report on the results of the review conducted under this paragraph; and (ii) any recommendations of the Secretary for legislative action. (3)(A) The Comptroller General shall conduct a study on the implementation of the Mentor-Protege Program established in section 831 of the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101–510; 10 U.S.C. 2302 note) and the extent to which the program is achieving the purposes established in that section in a cost-effective manner. (B) The study shall include the following: (i) A review of the manner in which funds for the Mentor-Protege Program have been obligated. (ii) An identification and assessment of the average amount spent by the Department of Defense on individual mentor-protege agreements, and the correlation between levels of funding and business development of protege firms. (iii) An evaluation of the effectiveness of the incentives provided to mentor firms to participate in the Mentor-Protege Program and whether reimbursements remain a cost-effective and viable incentive. (iv) An assessment of the success of the Mentor-Protege Program in enhancing the business competitiveness and financial independence of protege firms. (v) A review of the relationship between the results of the Mentor-Protegee Program and the objectives established in section 2323 of title 10, United States Code. (C) Not later than January 1, 2002, the Comptroller General shall submit to the Committees on Armed Services of the Senate and House of Representatives a report on the results of the study. (e) Repeal of Limitation on Availability of Funding.—Subsection (n) of section 831 of such Act is repealed. (f) Effective Date and Savings Provision.—(1) The amendments made by this section shall take effect on October 1, 1999, and shall apply with respect to mentor-protege agreements that are entered into under section 831(e) of the National Defense Authorization Act for Fiscal Year 1991 on or after that date. (2) Section 831 of the National Defense Authorization Act for Fiscal Year 1991, as in effect on September 30, 1999, shall continue to apply with respect to mentor-protege agreements entered into before October 1, 1999.