Report challenges Commerce program aimed at small manufacturers

Underfunding and restrictive funding formulas impede the success of a Commerce Department program aimed at providing technical and business assistance to small manufacturers, according to a new report.

Members of the National Academy of Public Administration who authored the report said Monday that federal underfunding and restrictive funding formulas impede the success of the Manufacturing Extension Partnership Program. Although the report calls the program a "valuable resource," it calls for revision and expansion of the Commerce Department program to meet the evolving needs of manufacturers.

"The MEP's current model is simply not geared to address the evolving barriers that face small manufacturers in remaining competitive," said Frank Reeder, who chaired the report panel.

Reeder said MEP should expand its platform of technical and business assistance to emphasize technological diffusion, new product development and supply-chain integration. The report also calls for MEP to develop an "integrated national network of assistance."

Although 59 MEP centers are spread across the country, their activities frequently are uncoordinated with other centers or the national headquarters. Reeder said these "semi-autonomous" centers -- which are housed on state university campuses, within nonprofit groups or as state governmental agencies -- form the skeleton for a national network, but MEP must work to integrate them further.

The report also states that the Commerce Department should use the creation of a new federal manufacturing czar to consider realigning and integrating its manufacturing assistance programs.

Although the study does not recommend specific funding levels for MEP, Reeder called for greater funding flexibility from Congress. He said the current congressional funding model, which requires states to match federal funds two-to-one in order to receive money, "may be restrictive." That matching requirement sometimes drives MEP centers to focus on fee-raising programs rather than those with the most potential to help manufacturers, Reeder said.

"The panel is not recommending abandonment of the matching program entirely," he said. "But Congress might wish to set aside some of the funds as 'no-match' funds."

NAPA project director Joseph Thompson also said overhauling MEP would require changing the funding formula. "What we're proposing is not possible without some funding flexibility," Thompson said.

Speaking for himself, Reeder said current federal funding in general is not adequate to support the MEP changes called for in the report. "I think it would be difficult to fund the kind of program envisioned in the report at the current funding level," he said.

The NAPA panel presented its study to Commerce Secretary Donald Evans' staff last week, as well as House Science Committee staff members, although neither group has yet commented on the report. Reeder said the panel may meet with House appropriators in the future to discuss MEP's funding formula.