Two local companies have found success through the U.S. Department of Defense's mentor-protégé program.
The program provides small, disadvantaged businesses like Troy Systems in Fairfax, Va., and Tresp Associates Inc. in Alexandria, Va., the opportunity to increase productivity and improve management skills by linking with large government contractors.
Through incentives offered by the Defense Department and other government agencies, large contractors are recruiting small, disadvantaged businesses, including many 8(a)-certified companies, to work on a wide variety of government contracts under this program.
Launched in November 1990, the DoD's pilot program is scheduled to run through September 1999. Members of Congress will ultimately decide whether to extend the program or make it permanent, said Janet Koch, who manages the DoD's program.
"We are pretty certain the program will continue," said Koch.
Troy Systems and Tresp Associates Inc. have served as protégés to Lockheed Martin's Federal Systems Group based in Bethesda, Md.
"In the systems integration business, you've got a variety of needs," said Bill Washington, manager of small business development for Lockheed Martin Federal Systems Group, which has been participating in the program since September 1994.
Tresp Associates is a subcontractor to Lockheed Martin on the Global Combat Support System, a $304 million, 15-year contract with the U.S. Air Force. Lockheed Martin picked Tresp upon Tresp's completion of the 8(a) program in March 1994.
"We saw it as an opportunity to further assist us in converting from 8(a) [status] to full and open competition," said Lillian Handy, president and chief executive of Tresp. "As a direct result of the mentor-protégé program, Tresp has been included as a subcontractor on several major multimillion dollar opportunities with Lockheed Martin."
"In the long run, the program will have an effect on our revenues," said Handy, who would not give financial projections on how the program might help the $14 million systems integrator.
Tresp has participated as a team member on contract proposals with Lockheed Martin, attended courses in business development and proposal writing taught by Lockheed Martin executives, received assistance in developing brochures and hand-outs, and received hardware and software to upgrade Tresp's local area network.
"We are taken more seriously when we say we have a strategic relationship with a company like Lockheed Martin," said David Boyer, president and chief executive of Troy Systems. "We wanted to be able to learn from companies that have a good track record. I don't want to make mistakes if I don't need to make them."
Troy, which graduates from the 8(a) program in September, is a subcontractor to Lockheed Martin on the Defense Messaging System program - awarded in July 1995 by the Defense Information Systems Agency.
Boyer said that the $27 million company has garnered $700,000 in profits because of participation in the mentor-protégé program. And Boyer wants to see that figure double in the next two years.
The success of the DoD program is in the numbers. There are now 105 mentors and 123 protégés in the program. Overall, there have been 157 mentors and 292 protégés since the program's inception.
Congress appropriated $38 million for the DoD's mentor-protégé program for fiscal 1997 - a $10 million increase from the previous year.
The DoD's pilot program was launched through the National Defense Authorization Act for fiscal 1991, which was sponsored by retired Sen. Sam Nunn, D-Ga. The Environmental Protection Agency followed by launching its mentor-protégé program in June 1992. Then the Department of Energy's mentor-protégé program started in August 1994 and NASA launched its program March 1995.
In order to qualify as a protégé, a company must be 51 percent owned by one or more socially or economically disadvantaged individuals - the Small Business Administration's definition of a small, disadvantaged business.
Mentors in the DoD's program are defined as companies awarded Department of Defense contracts or subcontracts equal to or greater than $100 million during the preceding year.
"The overall objective is to teach small businesses to become reliable, self-sufficient subcontractors and primes," said David Lambert, an attorney with Hewes, Gelband, Lambert & Dann in Washington and author of the book, "Successful Mentor-Protégé Relationships." "The program is designed to teach a company to do bigger and better things."
Each agency offers different incentives to the mentors. The Defense Department's program gives credit toward small, disadvantaged business subcontracting goals required by the SBA of large Department of Defense contractors. Or a mentor receives reimbursement from the costs incurred helping the protégé.
According to program participants, the mentor-protégé concept is very different from the 8(a) program despite matching objectives.
"The government is [keeping] very hands-off of the relationship between the mentors and the protégés," said Lambert.
In the mentor-protégé program, protégés are eligible for an unlimited number of subcontract awards that come directly from the mentor. In the 8(a) program, the SBA works alongside the federal purchasing agents and 8(a) program participants and functions as the prime contractor, giving subcontracting work to 8(a) firms.
Currently the DoD is looking at different ways to improve the mentor-protégé program.
On Feb. 14, the Defense Information Systems Agency announced an initiative requiring mentors to draft a plan to help protégés correct their weaknesses. DoD officials will review the results within the next nine months and mentors, protégés and the Defense Department will decide whether to make the initiative a requirement.