Firms reap benefits from military's mentor program: one Local tech firm grew from six to 80-plus employees

San Diego Business Journal, March 27, 2006 by Julie Gallant

Northrop Grumman Corp. will give brotherly guidance to a local manufacturing firm as a million-dollar mentoring program unfolds during the next several years.

The U.S. Air Force Mentor-Protege Program involves a whole family of participants, with the Air Force taking the lead in awarding up to $983,000 over three years to Northrop Grumman's Radio Systems division.

Radio Systems operates out of Rancho Bernardo as part of Northrop's Space Technology sector. The 1,200 local Radio Systems employees work on communications, navigation and identification avionics for next-generation fighter aircraft, the F-22 Raptor and the F-35 Joint Strike Fighter.

Among other things, they're creating communications systems that enable aircraft and ground troops to communicate with each other via satellite. The Joint Tactical Radio System government program they're working on now involves creating radios that enable joint forces and allies to interoperate with each other.

Radio Systems won the contract for the mentor-protege program from the Air Force in November. At that time the Air Force awarded six mentor-protege programs, including two for Northrop Grumman, whose corporate offices are in Los Angeles, Arlington, Va., and London.

An awards ceremony to recognize a Northrop Grumman mentor-protege program with KW Microwave Corp. of Carlsbad was held this month at the annual Department of Defense Mentor-Protege Conference in Atlanta. A Nunn-Perry Award was given to Northrop and KW Microwave, along with 11 other winners. The Nunn-Perry Award, named in honor of former U.S. Sen. Sam Nunn and former Secretary of Defense William Perry, recognizes outstanding mentor-protege teams formed under the auspices of the Department of Defense's Mentor-Protege Program. A review panel presents their nominations to the defense department's director of the Office of Small Business Programs for consideration.

This year, 28 nominations were considered for Nunn-Perry awards through the Army, Navy, Air Force and defense information systems administration.

Eileen King, an Air Force mentor-protege program manager, said Northrop Grumman has won Nunn-Perry awards every year since 1998, including awards given to TRW before Northrop bought the company.

"Northrop Grumman is a standout in the mentor-protege program because they put a strong focus on the small-business community," King said. "They've elevated this and other socioeconomic programs to a corporate level and give it a magnitude of strength and visibility that a lot of other companies don't have."

Spending The Money

King said Northrop's mentor-protege program award with Radio Systems is almost $564,000 during the first year, followed by optional awards of $270,000 and $150,000 the following two years. Radio Systems submits a proposal on how it will spend the award funds, and her department can make recommendations and accept or modify the plan that Radio Systems implements.

Choosing a protege to help implement its defense programs was an easy decision for Radio Systems since it's been developing a synergistic bond with a manufacturing firm in its own back yard during the past few years.

The young protege Radio Systems selected, Hi-Tech Electronic Manufacturing Inc. has been assembling circuit boards for Northrop Grumman off and on since it emerged in Sorrento Valley in 1997 as a garage shop of only six employees. Having grown to 82 employees, Hi-Tem still meets the Air Force's requirements for participating in the mentoring program as a small, disadvantaged business. About 70 percent of the manufacturing staff are Asian.

Hi-Tem Chief Executive Officer Thai Nguyen said the firm has been eager to learn about lean manufacturing and implement its efficiency system since it first heard about the mentor program from Radio Systems.

"They called us back and said, 'Are you interested?'" Nguyen said. "I said, 'Heck yeah, what a deal.' The Air Force will sponsor us to increase our competency level and increase our competitiveness."

Nguyen said the firm didn't stand a chance of getting large government contract awards directly before because the company was too small, and the competency level wasn't high enough to meet the standards of working on programs such as the F-22 and F-35 Joint Strike Fighter programs.

Hi-Tem's niche is quick-turn, prototype, low-volume production by industry standards, with an estimated 1,500 to 2,500 circuit boards assembled per week.

Program Aids Growth

But by participating in the mentor program, it'll make improvements on operating its manufacturing facility and make contacts in the military to help grow the business.

Nguyen said the firm has been interested in the defense and aerospace markets since the Sept. 11 terrorist attacks when it switched the focus of its manufacturing operations away from commercial telecommunications.

The decision was profitable, Nguyen said, with annual revenues for Hi-Tern growing from $400,000 in 1999 to $12 million several years later, though it receded to $9.3 million last year. Revenues for 2006 are projected at $15 million, he said.