You can filter the Custom Lookup in CRM 2011 depending on the selected Co-Ordinator. Please refer to the link below.
crmdm.blogspot.ae/.../lookup-filtering-in-crm-2011-using.html
As Co-Ordinator is set as Manager, so it must be set as Manager for few of the Service Engineers. Hence, filter out all the user whose manager is selected Co-Ordinator. Please call the function on ONCHANGE event of Co-Ordinator lookup.
Hope this helps.