Mentor-Protégé Programs
A Presentation of Small Business Best Practices Joe Green
SAIC, Inc.
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SAIC Protégé Companies
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Outline
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Mentor-Protégé Program Issues
– – – – – – – – Value proposition for Mentor-Protégé program Supplier diversity versus Small business development Regulatory/mandatory versus Good business sense Backstop model Incentive models for contracting with Small Business Discipline and process in Mentor/Protégé programs Technology transfer Margin pressures
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Conclusion
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Overview of Mentor-Protégé Program
• Purpose
– Provide Incentives for Large Contractors to Assist Protégés – Increase the Overall Participation of Eligible Protégés in DoD Acquisitions – Increase Competition for DoD Work – Help Transition Protégés from Subcontractors to Prime Contractors – Assist DoD in Meeting Its Small Business Goals
• Requirements
– To Provide a Technology Transfer to the Protégé – Must Include HBCU/MI Participation
Small business focus of Huntsville is an opportunity
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Overview of Mentor-Protégé Program (Cont)
• Who is Eligible Protégé
– – – – SDB 8(a) SDVOSB HUBZONE Woman Owned
• Reimbursable Programs
– DoD Programs Offer up to $500,000 in No Fee Reimbursement for Mentor – 2 or 3 Years Programs
• The Future
– Currently no funding for FY08 – Should be back on track in FY 09
Small business focus of Huntsville is an opportunity
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Issue 1
Value proposition for Mentor-Protégé program “What’s in it for me?” • For Protégé
– – – – Long term collaborative strategic growth New technologies Increased revenue, pipeline of opportunities, contract vehicles Position small company for acquisition.
• For Mentor
– Close relationship with business to chase small business set asides – Derivative pull through business – Niche business area partner – Derivative business – Potential acquisition
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Issue 1 Supplier diversity vs Small business development
• SAIC is services firm, seeking people who can make us strong • SAIC is not a manufacturing firm. Not focused on supplier diversity • We host Small Business and M/P programs in Business Development • Focus is to GROW BUSINESS, not make SBA rankings and percentages
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Issues 2
• Regulatory/mandatory vs Good business sense
– Don’t focus on compliance. Business and profitability are all that counts. – Flawless execution. – Don’t just answer the mail on a proposal.
• Backstop model
– Seek credible small businesses who can prime Small Business Set Asides – Put financial controls in place to ensure a reputable prime – Develop close relationship, bid together – SAIC provides niche support where they are not skilled to bid – Ask small business “What do you need to win?” Tell them “We’ll do it.” – Don’t get credit with SBA with this approach, but you grow business and win on SBSA A “servant leader” mentality grows business and makes money. It’s counter intuitive but it’s true
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Two Models … Only One Makes Sense
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LB
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SB
SB
LB
SBA Model
Incentivizes subcontracting Does not promote SB leadership
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SAIC Value Model
Incentivizes SB growth and SB contract leadership
Issues 3 Discipline and process
• Rule #1 – Know the company
– CHEMISTRY! If the foundation of the business relationship is wrong, you’re relying on dumb luck to succeed. – Ensure prior business with the company. Know the General Manager.
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Rule #2 – Protégé in niche business to extend skills, customer diversity
– Precludes stepping on Protégé business if they are niche, not our business line
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Rule #3 – Set standards (SAIC rule, not in DoD or NASA requirements)
– At least: $6M revenue, 60 people, in business 6 years – Why? Mentor-Protégé program is a major financial drain on the small business. This ensures critical mass to enable the company to do their part in the mentoring process.
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Issues 3
Discipline and process (cont.)
• Rule #4 – “The 13 questions” and our expectation management
– SAIC rule to bring on a protégé. Not required by DoD or others. – Protégé expects to be mentored and grown. We work this mutual agreement hard. Ensures each side understands what they are signing up to.
• Rule #5 – Formal Program Manager assigned to each Protégé • Rule #6 – Regular meetings with SAIC leadership
– Opportunity to share their expectations not met – Critique the Program Manager
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Issues 4
Technology Transfer
• Core of each Protégé program • Skill or tool we can transfer that makes them attractive to customer base • This costs money
– To buy the tool, train it. – To train and transfer processes
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Issues 4
Margin pressures
Mentor-Protégé program consumes resources
• • • Develop corporate infrastructure Establish and refine tools Infrastructure assessment
– – – – – – HR assessment Accounting programs Organizational structure Competitive assessments Pipeline development Training
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Program manager Procurements
– Technology transfer – Tool purchases – Training programs
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Issues 4
Margin pressures (Cont)
• Lack of resources on low overhead contracts severely limits capital to fund work with the protégé
– Limited or no resources with pressures on lower rates – Overhead use lowers “time sold”
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Solution to ensure a successful program is to fund it at the customer level.
– Translates to “time sold” programs with no fee
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Lack of funding limits the value proposition. Limited out of pocket funds Where we’ve been funded, we accomplished 2x or more with Protégé
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Conclusion
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Expectation management is the first key to success. Outcome of a Mentor-Protégé program depends on flawless execution
– – – – Focus on business development versus supplier diversity Discipline and process Technology transfer Small business backstop model
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The goal of a successful program must be to grow business for the protégé and the mentor. Outcome of a program is a direct function of what you put into it.
– If you resource a program, it will produce more value than if done “out of hide.”
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Small business is good business… for all of us!
– A “servant leader” mentality grows business and makes money. It’s counter intuitive but it’s true.
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DoD Nunn Perry Winners
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Oak Grove Technologies – 2007
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