Manufacturing extension program named as finalist for coveted government innovation award

Manufacturing & Technology News, May 4, 2004

An increasingly high profile federal program that the Bush administration wanted to effectively kill has become a finalist in the country's most prestigious award for government programs. The Innovations in American Government Award from Harvard University's Kennedy School of Government and the Council for Excellence in Government has named the Manufacturing Extension Partnership (MEP) as one of its 15 finalists among more than 1,000 government program applicants for the 2004 award.

MEP was described as being a "remarkable" program that "is blending government and private resources into a partnership" aimed at helping the 98 percent of American manufacturers that are small companies. These small manufacturers, says Harvard, "are 60 percent less productive than their larger counterparts, [but] MEP is bridging the gap and making these companies become more productive and profitable."

Unfortunately for MEP, the kind words and honor did not come early enough to save it from the budgetary ax. Until this year, the nation's 70 or so MEP centers received one-third of their funding from the federal government, but the program was singled out for elimination by the Bush administration in 2003 and 2004. This year, Congress reduced MEP's federal portion of funding by 63 percent to $38 million, down from $106.5 million.

As a result, the MEP office at the National Institute of Standards and Technology is in the process of laying off half of its staff and many of the centers around the country are doing the same. A survey done by the Modernization Forum, the trade group representing the centers, found that centers are "downsizing rapidly." MEP centers in at least 16 states are planning to close in the next year "many of them in election swing states like Arizona, Florida, and New Mexico," says the Modernization Forum. "Across the country, the Centers have already laid off 15 percent of their professional staff. If Congress approves the President's request for $39 million next year, the surviving Centers will reduce their staffs by more than 50 percent."

The Georgia MEP-sponsored center is expecting a $1.7-million annual cut in funding starting July 1. Last year, the center's clients "realized a total of $10.4 million in increased sales and $25.8 million in cost savings," says Georgia Tech's Office of Economic Development and Technology Ventures. "For the same period, 474 jobs were created and 556 retained."

In its assessment of the program, the Kennedy School of Government said MEP centers helped increase sales of those companies receiving assistance by $953 million and either created or retained 34,000 jobs.

MEP will deliver a public presentation before the award's national selection committee at Harvard University on May 12. Each of the five winning programs will receive a $100,000 grant to encourage replication of its innovations in other programs throughout the government.