LESG Capture Plan Template v1'2

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Mentor-Protégé Programs A Presentation of Small
Business Best Practices Joe Green SAIC, Inc.
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Outline

• 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
• 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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SAIC Mentor-Protégé Effort

• SAIC has mentored more than 70 firms
• Active participant in the DoD Mentor-Protégé
  Program for over 15 years
• SAICs first-ever protégé was mentored in
  Huntsville
• Currently 28 Firms in a Mentor Protégé program
  with SAIC
• Army 14 DLA 4
• DISA 2 DoD 2
• Treasury 1 NASA 1
• DHS 1 FAA 1
• SAIC, Huntsville currently mentors 8 firms
• SEI Group Media Fusion
• Oak Grove Technologies SIMS
• MJLM Engineering Power Services
• DKW Communications Information Innovators

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SAIC Protégé Companies
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SAIC DoD Nunn Perry Winners
Named for retired Senator Sam Nunn, who sponsored
the legislation that created the mentor-protégé
program, and former Secretary of Defense William
Perry for his commitment to its implementation.
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Issue 1
Value proposition for Mentor-Protégé program -
Whats 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
• Dont focus on compliance. Business and
  profitability are all that counts
• Flawless execution
• Dont just answer the mail on a proposal
• Backstop model
• Seek credible small businesses who can prime
  Small Business Set Asides (SBSA)
• 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 Well do it.
• Dont get credit with SBA with this approach, but
  you grow business and win on SBSA

A servant leader mentality grows business and
makes money. Its counter intuitive but its true
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Two Models Only One Makes Sense


LB
SB
SB
LB
SBA Model Incentivizes subcontracting Does not
promote SB leadership
SAIC Value Model Incentivizes SB growth and SB
contract leadership
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Issues 3
Discipline and process

• Rule 1 Know the company
• CHEMISTRY! If the foundation of the business
  relationship is wrong, youre relying on dumb
  luck to succeed
• Ensure prior business with the company Know the
  General Manager.
• Rule 2 Protégé in niche business to extend
  skills, customer diversity
• Precludes stepping on Protégé business if they
  are niche, not our business line
• 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
• 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
• Solution to ensure a successful program is to
  fund it at the customer level.
• Translates to time sold programs with no fee
• Lack of funding limits the value proposition.
  Limited out of pocket funds
• Where weve been funded, we accomplished 2x or
  more with Protégé

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Conclusion

• 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
• 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.
• Small business is good business for all of us!
• A servant leader mentality grows business and
  makes money. Its counter intuitive but its true

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Questions