Council. He stressed that the company considers a partnership in a unique way—almost like a marriage. Because the company is small, only a few individuals are integrated into the manufacturing supply chain at the company’s prime contractors. Most customers like this aspect of the partnership. For example, Coast/ACM is currently the only manufacturer of magnetic components with which Honeywell Space Systems Operations partners. This relationship has lasted 19 years, in part because Coast/ACM components have never failed in flight.

Coast/ACM also has a partnership with Northrop Grumman Space Technology, formerly TRW—supplier partnership agreement No. 001. (In other words, Coast/ACM is the top supplier to Northrop Grumman Space Technology). This is significant because Coast/ACM is a small magnetics technology company competing with many other companies that manufacture similar products. The relationship between Coast/ACM and Northrop Grumman has been built over many years. Peninger said that the company was so specialized in surface mount technology that it often passed work in other areas to other companies. Before the merger, TRW had an in-house magnetic manufacturing facility that was well known in the industry. After the merger, owing to the strategic partnership that Coast/ACM had with it, Northrop Grumman closed the TRW facility. It went a step further and now uses Coast/ACM part numbers instead of the old Northrop Grumman numbers. This is not an insignificant turn of events if one considers the exposure this provides Coast/ACM and the associated benefits. This relationship is a direct result of the DOD Mentor-Protégé program.

The DOD Mentor-Protégé program, enacted in 1990 with support from Senator Sam Nunn and Secretary of Defense William Perry, provides incentives for major DOD prime contractors (the “mentors”) to help SDBs—organizations that qualify by virtue of being owned by socially or economically disadvantaged individuals (the “protégés”). In the future, two other groups may be allowed to participate in the DOD Mentor-Protégé program—service-disabled veterans and historically underutilized business (HUB) zones.

Coast/ACM, along with hundreds of other protégé firms, has been given opportunities that normally would never be given to a small firm. Every department in the federal government, including NASA, has a mentor-protégé program office. (NASA's mentor-protégé program is very strong. Every year, it gives out the prestigious Goldin-Stokes Award.) Peninger went on to describe most of these mentor-protégé programs as credit-only programs, with the only federal department that offers a reimbursable program for mentors being DOD. He also mentioned that most of the prime aerospace contractors, such as Lockheed Martin, Boeing, Northrop Grumman, and Raytheon, have viable mentor-protégé programs in place.

One important benefit of mentor-protégé programs is that they assist in the transfer of technology to small businesses, especially SDBs, which would never see this happen without assistance. Small businesses do not have resources to invest in research and product development in the face of other more pressing demands. Through a Department of the Air Force mentor-protégé agreement, the technology for magnetic grid arrays was transferred to Coast/ACM and Northrop Grumman Space Technology. This was a unique project in the Air Force, with Coast/ACM having been the only company ever commissioned to use magnetic ball grid arrays in a transformer.

Peninger went on to describe the program further. One of the requirements of the DOD Mentor-Protégé program is that the partnership must be between three entities—a



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