Manufacturing Extension Partnership Program: An Overview




Manufacturing Extension Partnership
Program: An Overview

Wendy H. Schacht
Specialist in Science and Technology Policy
November 20, 2013
Congressional Research Service
7-5700
www.crs.gov
97-104


Manufacturing Extension Partnership Program: An Overview

Summary
The Hollings Manufacturing Partnership (MEP) is a program of regional centers that assist
smaller, U.S.-based manufacturing companies in identifying and adopting new technologies.
Operating under the auspices of the National Institute of Standards and Technology (NIST),
centers in all 50 states and Puerto Rico provide technical and managerial assistance to firms.
Federal funding is matched by nonfederal sources. Existing resources in government, business,
and academia are leveraged while the program endeavors to build on current state and local
activities and industrial extension efforts.
The MEP program has, at times, been included in the discussion surrounding termination of
government programs that provide direct federal support for industry. Questions have been raised
in congressional debate as to the appropriateness of government funding for this program when
the technologies are available in the marketplace. Instead of the government picking “winners and
losers,” opponents argue, the marketplace should make decisions regarding firms worthy of
investment. However, proponents of the program stress that, to date, no direct funding is available
to companies through MEP and that assistance is technical, scientific, and/or managerial. The
centers facilitate the adoption of new technologies that foster competition and promote
innovation. As Congress continues to make appropriation decisions, support for manufacturing
extension may be discussed in the context of the role of the federal government in facilitating
research and technological advancement.

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Manufacturing Extension Partnership Program: An Overview

Contents
Background ...................................................................................................................................... 1
The Program .................................................................................................................................... 1
Funding ............................................................................................................................................ 4
Evaluations of the Manufacturing Extension Partnership ............................................................... 6
Issues and Concerns ......................................................................................................................... 7

Contacts
Author Contact Information............................................................................................................. 9

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Manufacturing Extension Partnership Program: An Overview

Background
The trade debate in the mid-1980s, which ultimately resulted in passage of the Omnibus Trade
and Competitiveness Act (P.L. 100-418), underscored the critical role of technological advance in
the competitiveness of individual firms and in long-term national economic growth and
productivity. Reflecting these and other ideas, legislation established a public-private program,
now known as the Hollings Manufacturing Extension Partnership (MEP), to assist smaller, U.S.-
based manufacturing firms in identifying and adopting new technologies. The focus on small and
medium-sized companies derived from their perceived contribution to job creation, innovation,
and manufacturing. Research at that time indicated that businesses of fewer than 500 employees
were about 2.5 times as innovative per employee as large firms. The 330,000 firms that fit this
category represented almost 99% of the nation’s manufacturing enterprises, employed
approximately 9.7 million people, and accounted for 60% of total U.S. manufacturing
employment in 2007.1
The improved use of technology by small and medium-sized businesses is seen as important to
the competitiveness of American manufacturing firms. How a product is designed and produced
often determines costs, quality, and reliability. Lack of attention to process technologies and
techniques may be the result of various factors, including finances, absence of information,
equipment shortages, and/or undervaluation of the benefits of technology. The purpose of the
centers program is to address these issues through outreach and the application of expertise,
technologies, and knowledge developed within the manufacturing research activities of the
federal government.
The Program
Located at the National Institute of Standards and Technology (NIST), a laboratory of the
Department of Commerce, the Manufacturing Extension Partnership program is built on regional
centers to assist companies in adopting and adapting new technologies and manufacturing
techniques generated by the federal agencies in pursuit of their various missions. The transfer of
public sector expertise, particularly that found in NIST, as well as technology suited to the
individual requirements of a firm, is to be accomplished through a “manufacturing extension”
system. Federal funding is offered on a competitive basis to nonprofit, state, or local
organizations for development and management of the centers. Government financing was
initially limited to six years, a provision temporarily suspended by the FY1997 and FY1998
appropriations acts, and eliminated by P.L. 105-309. Initially nonfederal sources were required to
provide 50% or more of each center’s capital and costs through matched dollars, fees for service
collected, and/or industry contributions. After six years, federal funding may be provided at no
more than one-third of these costs if the center has received a positive, independent evaluation.
Centers are selected in response to open and competitive solicitations and are merit based.
According to NIST, the selection criteria include “knowledge of target firms in the proposed
region; linkages to sources of technology; technology delivery mechanisms; and management and

1 National Institute of Standards and Technology, The Manufacturing Extension Partnership, Delivering Measurable
Results to Its Clients, Fiscal Year 2009 Results
, March 2011, available at http://www.nist.gov/mep/upload/MEP-
Measuring-Results-Mar11-FINAL.pdf.
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Manufacturing Extension Partnership Program: An Overview

financial plans.” The sponsor, locally based, is expected to provide expertise reflecting the needs
of the business community and the type of industries in that region. No direct financial support is
available for companies through the center; the program offers only technical and managerial
assistance that is generally reimbursable on a sliding scale. Center staff are employees of the
center and the partners, not the federal government. The intent is to have a center not more than
two hours away from potential clients.
In 1994, the initial regional centers program expanded when NIST took over support of 36
extension centers originally funded by the Department of Defense through the Technology
Reinvestment Project. The combined programs became the Manufacturing Extension Partnership
with approximately 60 centers and over 440 field locations that cover all 50 states and Puerto
Rico.
The intent of the original legislation creating the manufacturing extension effort was to provide
cutting-edge technology developed within NIST and other federal laboratories to small and
medium-sized manufacturing companies. Royalties and licenses paid to the centers and/or the
government for the use of these technologies were expected to make the centers self-sufficient
after the initial six years of operation.
However, the focus on the application of advanced, federally funded technology to small and
medium-sized manufacturing firms did not prove satisfactory to most users of the centers. What
was seen as being of value to these firms were off-the-shelf technologies and business advice. A
1991 assessment of the program by the General Accounting Office (GAO, now the Government
Accountability Office) concluded that
While legislation establishing the Manufacturing Technology Centers Program emphasized
the transfer of advanced technologies being developed at federal laboratories, the centers
have found that their clients primarily need proven technologies. Thus, a key mandate of
this program is not realistically aligned with the basic needs of most small
manufacturers
[emphasis added] ... according to officials from professional and trade
associations representing small manufacturers and the results of key studies on U.S.
manufacturing competitiveness, such advanced, laboratory-based technologies are not
practical for most small manufacturers because these technologies generally are expensive,
untested, and too complex.2
In recognition of this situation, the manufacturing centers program was reoriented to offer basic
technologies that permitted small and medium-sized firms to improve their competitive position.
By the mid-1990s, MEP was providing “a wide range of business services, including helping
companies (1) solve individual manufacturing problems, (2) obtain training for their workers,
(3) create marketing plans, and (4) upgrade their equipment and computers.”3 Current efforts are
focusing on issues of concern to the small manufacturing community including, as identified by
NIST, technology acceleration, supplier development, sustainability, continuous improvement,
and workforce development. The “overarching strategy” for the MEP program going forward is to
reduce manufacturing costs through “lean, quality, & other programs targeting plant efficiencies”

2 General Accounting Office, Technology Transfer, Federal Efforts to Enhance the Competitiveness of Small
Manufacturers
, GAO/RCED-92-30, November 1991, 3.
3 General Accounting Office, Manufacturing Extension Program, Manufactures’ Views About Delivery and Impact of
Services
, GAO/GGD-96-75, March 1996, 2.
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and to increase profitability “through business growth services resulting in new sales, new
markets, and new products.”4
Centers offer expertise, needs evaluation, application demonstrations for new production
technologies, training, and information dissemination. Larger, regional organizations use federal,
university, and private sector technologies, knowledge, and skills in providing improved
manufacturing techniques designed to increase efficiency and quality and to decrease costs. They
also can furnish individual project engineering, help in selecting and employing software and
equipment, factory assessments, and provide on-site assistance with new technologies.
Identification of and access to local and national experts may be provided. Managerial, financial,
and marketing services are accessible. No new R&D is conducted by the centers, which only use
technologies available elsewhere in the network. One center may have several field offices to
provide support to a broader population. Generally these programs are associated with operating
technical or training institutions such as community or technical colleges, vocational institutions,
university manufacturing programs, or state technical assistance efforts.
The partnership leverages existing resources—whether from government, business, or academia.
It does not attempt to supplant the private sector. The program endeavors to build on existing
state and local activities and industrial extension efforts. According to NIST, cooperative efforts
involve other federal agencies, the National Association of State Development Agencies, the State
Science and Technology Institute, the National Association of Manufacturers, and various
universities and community colleges.
The America COMPETES Act (P.L. 110-69) authorized the creation of (but did not fund) several
new manufacturing programs to be administered by NIST including collaborative manufacturing
research pilot grants for partnerships between industry and other educational or research
institutions to develop new manufacturing processes, techniques, or materials; a manufacturing
fellowship program with stipends available for post-doctoral work at NIST; and a manufacturing
research database.
In October 2010, NIST announced $9.1 million in cooperative agreements for 22 projects
“designed to enhance the productivity, technological performance and global competitiveness of
U.S. manufacturers.”5 The funding was granted on a competitive basis to nonprofit organizations
that will work with the MEP centers and address one or more of the areas that have been
identified by NIST as critical to U.S. manufacturing including
• Responding to evolving supply chains;
• Accelerating the adoption of new technology to build business growth;
• Implementing environmentally sustainable processes;
• Establishing and enabling strong workforces for the future, and;
• Encouraging cultures of continuous improvement.6

4 Slides provided by Roger D. Kilmer, Director, Hollings Manufacturing Extension Partnership, NIST, May 19, 2010.
5 National Institute of Standards and Technology, NIST Manufacturing Extension Partnership Awards $9.1 Million for
22 Projects to Enhance U.S. Manufacturers’ Global Competitiveness, Press Release, October 5, 2010, available at
http://www.nist.gov/mep/upload/100410-MEP-Competition-press-release-FINAL.pdf.
6 Ibid.
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These grants differ from the established MEP effort in which no new manufacturing research is
conducted and funded as existing manufacturing technology is applied to the needs of small and
medium-sized firms.
In July of 2013, NIST announced a new pilot program under MEP, Manufacturing Technology
Acceleration Centers (M-TACs), designed to address “the technical and business challenges
encountered by small and mid-sized U.S. manufacturers as they attempt to adopt, integrate, and
execute advanced product and process technologies into their operations.”7 According to NIST,
two pilot projects are expected to be funded at approximately $500,000 each for one year.
Funding
Initial appropriations for NIST manufacturing extension programs totaled $12.5 million for
FY1989 and FY1990. Further funding included $11.9 million in FY1991, $15.1 million in
FY1992, and $16.9 million in FY1993. In FY1994, the State Technology Extension Program was
combined with the centers’ activity to create the Manufacturing Extension Partnership.
Appropriations for the larger effort totaled $30.3 million. Funding for FY1995 was $90.6 million
and included a new program, LINKS, to network federal, state, and local agencies, the private
sector, and the manufacturing outreach institutions through communications and data systems.
However, $16.3 million of this amount was rescinded. MEP was provided with $80 million for
FY1996 and P.L. 104-208 provided $95 million for FY1997 while temporarily removing the six-
year time limit for federal support of the individual centers. For FY1998, $113.5 million was
appropriated while the following year MEP was funded at $106.8 million, which reflected a
decrease in the federal share of support as the centers matured. P.L. 105-309 ended the six-year
restriction on federal funding if a positive evaluation through an independent review is received at
least every two years. Federal financing is limited to no more than one-third of the annual
operating and maintenance costs of the center. For FY2000, the partnership was financed at
$104.2 million (after a mandated rescission) and $105.1 million was appropriated for FY2001. In
FY2002, MEP received $106.5 million in funding.
The Bush Administration’s FY2003 request of $12.9 million for the partnership reflected the
recommendation that centers in operation for more than six years no longer receive federal
support; however, funding totaled $105.9 million. The following year, the President’s FY2004
budget again included a significant reduction in support for the extension program and only $38.7
million was appropriated. Funding increased to $107.5 million in FY2005. While the
Administration’s FY2006 and FY2007 budgets included substantial decreases in financing for
MEP, Congress appropriated $104.6 million in FY2006 and $104.6 million in FY2007.
In FY2008, the President’s budget proposal included $46.3 million for MEP, 56% below the
FY2007 figure; however, the program was funded at $89.6 million, which was 14.4% below the
previous fiscal year. For FY2009, the Bush Administration’s amended budget request provided $2
million to close out the federally funded portion of MEP. No final FY2009 appropriations
legislation for the program was enacted by the close of the 110th Congress. P.L. 110-329, the
Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009, provided,
in part, funding for MEP at FY2008 levels through March 6, 2009. P.L. 111-8, the FY2009

7 Explaining AMTech, M-TAC and NNMI: New NIST Programs in Support of Advanced Manufacturing, available at
http://www.manufacturing.gov/docs/Explaining_AMTech_M-TAC_NNMI.pdf.
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Omnibus Appropriations Act, provided $110.0 million in support for manufacturing extension, a
22.8% increase over FY2008.
P.L. 111-117, the Consolidated Appropriations Act, 2010, as well as the President’s budget request
and H.R. 2847, as originally passed by both the House and Senate, fund MEP at $124.7 million, a
13% increase over FY2009.
The Administration’s FY2011 budget included $129.7 million for the Manufacturing Extension
Partnership program, 4.0% more than the FY2010 appropriation. S. 3636, the FY2011
Commerce, Justice, Science appropriations bill reported from the Senate Committee on
Appropriations during the 111th Congress, also provided $129.7 million for MEP. No FY2011
Commerce, Justice, Science appropriations bill was reported from the House Appropriations
Committee in the last Congress.
MEP operated under a series of Continuing Resolutions until a final appropriations bill was
enacted. The last CR, P.L. 112-6, in effect through April 8, 2011, provided funding for MEP at the
FY2010 figure of $124.7 million. Under H.R. 1, as passed by the House (the “Full-year” CR),
FY2011 support for the program would have remained at $124.7 million.
The final FY2011 appropriations legislation, P.L. 112-10, provided $128.4 million for MEP, 3.0%
more than both the FY2010 appropriation and the funding included in the Full-Year CR, and
1.0% below the Administration’s budget.
P.L. 112-55 funded MEP at $128.4 million in FY2012, the same amount as the previous fiscal
year. The Administration’s FY2012 budget proposed $142.6 million in support for MEP which
represented an 11.1% increase over FY2011 funding. H.R. 2596, as reported from the House
Committee on Appropriations, also would have provided $128.4 million while the FY2012
consolidated appropriations bill covering the Department of Commerce originally passed by the
Senate, H.R. 2112, would have funded the program at $120.0 million, 6.5% below the amount
appropriated in FY2011.
The Administration’s FY2013 budget request included $128.0 million in funding for MEP, a 0.3%
decrease in support from the FY2012 appropriation. S. 2323, as reported from the Senate
Committee on Appropriations, would have provided the program with $128.5 million, 0.1%
above the FY2012 figure and 0.4% more than the budget request, while H.R. 5326, as passed by
the House, would have financed the program at $128.4 million, the same as in FY2012, 0.3% less
than the budget proposal, and 0.1% below the Senate-reported bill. The final appropriations bill,
P.L. 113-6, provided $119.4 million for the program after accounting for the two rescissions
included in the act and cuts due to sequestration according to NIST.8
The President’s FY2014 budget request would provide $153.1 million for the Manufacturing
Extension Partnership activity. H.R. 2787, as reported from the House Committee on
Appropriations, would fund MEP at $120.0 million while S. 1329, as reported from the Senate
Committee on Appropriations, includes $153.1 million for the program. P.L. 113-46, the
Continuing Appropriations Act, 2014, continues support for MEP at FY2013 levels through
January 15, 2014, or such time that an FY2014 appropriations bill is enacted.

8 National Institute of Standards and Technology Appropriations Summary, available at http://www.nist.gov/
public_affairs/releases/approps-summary2014.cfm.
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Evaluations of the Manufacturing
Extension Partnership

In an August 1995 briefing paper, the General Accounting Office (GAO, currently the
Government Accountability Office) explored how small and medium-sized firms were served by
various manufacturing extension efforts, including the MEP program (Manufacturing Extension
Programs, Manufacturers’ Views of Services
). Of the 551 responses (to 766 questionnaires
distributed), approximately 73% found that their relationships with an extension activity had a
positive effect on the company’s business performance. Fifteen percent indicated that there was
no effect at all. Among the impacts identified were improved use of technology (63%), better
product quality (61%), and expanded productivity (56%). According to GAO, this suggested that
manufacturing extension activities “had some success in achieving their primary goal of helping
manufacturers improve their operations through the use of appropriate technologies and through
increases in product quality and worker productivity.” The study also found that companies which
used internal funding to implement recommendations offered by extension programs were the
most likely to find an overall positive impact. “Significantly, approximately 97 percent of [these
respondents] ... said that they believed that this investment had been worthwhile.” Those who
utilized these organizations noted that practical experience in the field contributed to the success
of staff activities, as did the affordability of the assistance. Companies that did not utilize the
resources provided by the MEP tended to be those that were unaware of the program and the
opportunities associated with it.
Further refining this information in a March 1996 report, Manufacturing Extension Programs,
Manufacturers’ Views about Delivery and Impact of Services
, GAO also noted that company size
and age were significant factors in business perceptions of the extension program. Smaller (under
$1 million gross sales) and newer (established after 1985) firms “were most likely to report that
their overall business performance was boosted by MEP assistance.” While there were no real
differences in perception between extension services offered by NIST and those funded by other
institutions, there was a difference in assessments of effectiveness based on whether or not
payment was required. According to GAO, those firms that paid fees “were half as likely as those
that paid no fees to credit the assistance for having an extremely positive impact, as opposed to a
generally positive impact, on their business performance.”
The National Academy of Public Administration also studied the MEP program and in a 2004
report stated that while “on balance ... the MEP Program performs capably and effectively and
that the core premise ... remains viable as it is fulfilling its mission by leveraging both public and
private resources to assist the nation’s small manufacturers,” there should be consideration of a
“fundamental change in the mix of the types of services it provides as well as the structures for
delivering them.”9 As such, a Next Generation Strategic Plan was developed by the partnership to
concentrate on not just the shop floor but on “the entire enterprise and its position in the
marketplace.” In addition to individual manufacturing firms, NIST concluded that MEP “must
focus on industry/supply chain requirements as well as overall economic development trends.”10

9 National Academy of Public Administration, The Manufacturing Extension Partnership Program, Report 2,
Alternative Business Models, May 2004, available at http://www.napawash.org/Pubs/NIST6-2-04.pdf.
10 Manufacturing Extension Partnership, Next Generation Strategic Plan, available at http://www.mep.nist.gov/
documents/pdf/about-mep/Next_Gen_MEP_Strategy.pdf.
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According to NIST, MEP centers have responded to approximately 490,000 requests for
assistance since the program’s inception.11 Regular reporting is required of the centers, covering
the number and type of projects undertaken. Centers also are mandated to collect information that
may provide indicators of longer-term results, including changes in sales, financial investments,
inventory reduction, savings in labor and materials, and jobs created or saved. In a survey of
clients using the centers during FY2011, NIST found that companies reported $2.5 billion in new
sales, $4.1 billion in retained sales, $900 million in cost savings and the creation or retention of
61,139 jobs.12
Issues and Concerns
The Manufacturing Extension Partnership has, at times, been included in the discussion
surrounding termination of government programs that provide direct federal support for industry.
Questions have been raised as to the appropriateness of government funding for this program
when the technologies are available in the marketplace. Instead of the government picking
“winners and losers,” opponents argue, the marketplace should make decisions regarding firms
worthy of investment. However, proponents of the program stress that no direct funding is
available to companies through MEP and that assistance is technical, scientific, and/or
managerial. The centers facilitate the adoption of new technologies that foster competition and
promote innovation.
Congress continues to explore the issue of manufacturing extension within the context of federal
support for research and development. Until FY2004, despite some opposition to the
Manufacturing Extension Partnership, there had been continued and generally increased funding
for the program. The lower level of appropriations for FY1999 and FY2000 reflected a decrease
in the federal portion of center financing as the programs surpass the original six-year funding
limit, not declining congressional support for the activity. The ongoing involvement and financial
backing of state and local organizations may indicate additional, widespread commitment to a
program designed to expand private sector use of manufacturing technologies already funded by
the government and developed by the agencies in response to their mission requirements. While
the Bush Administration’s budget proposals continued to call for substantial reductions in support
for MEP, with the exception of FY2004, Congress had appropriated full funding for the centers
program although in FY2008 support fell 14.4% from the previous fiscal year. The final FY2009
appropriations legislation provided a large increase in financing for manufacturing extension
initiatives; the Consolidated Appropriations Act, 2010, again included a significant increase in
support for MEP. A small increase in support was provided for FY2011; there was no increase in
FY2012 funding. For FY2013, funding for MEP was 7% below the previous fiscal year.
The issue of the statutory six-year limitation on government financing of individual centers was
addressed by the Technology Administration Act of 1998 (P.L. 105-309). Yet, questions still
remain as to whether or not the centers should be required to be self-supporting, the federal
contribution should remain at one-third of the operating costs, or federal funding should be
increased to 50% as in the original legislation. Continued federal support, albeit on a reduced
level, was considered necessary because the loss of federal funding would have required increases

11 National Institute of Standards and Technology, Manufacturing Extension Partnership: Making an Impact on U.S.
Manufacturing,
2013, available at http://www.nist.gov/mep/upload/MEP-PARTNERING-IMPACTS-2013-2.pdf.
12 Ibid.
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in service charges which, it was argued, would put use of the centers beyond the financial ability
of many small companies. The requirement for companies to pay for services is important
because, as GAO found in a 1995 study, firms that used internal funding to implement
recommendations offered by extension programs were the most likely to find an overall positive
impact on their manufacturing position.13 According to a 1998 NIST sponsored study,
Analysis indicates that to offset lost public revenue centers would need to take on much
larger projects at much higher billing rates and focus on repeat business. As a result, many
small manufacturers would not be able to afford these services. Given this conclusion, the
best way to ensure high-caliber nationwide assistance to smaller manufacturers is to commit
to a stable amount of renewable federal funding for those centers which receive successful
evaluations.14
The financial support system created by Congress in the original legislation was based on
matching financing between the federal government and state, local, and/or private nonprofit
entities. The Senate Committee report to accompany S. 907 (100th Congress) directed that “the
percentage of funding offered by particular applicants be considered in deciding which
applications be selected.”15 Cost-sharing strengthens the ties between the organizations involved
in the cooperative arrangement and as such, the committee stated that “special attention will be
given to innovative ways in which Federal laboratories, State agencies, and business and
professional groups can work together.”16 In Senate hearings preceding the passage of the
Omnibus Trade and Competitiveness Act, former Director of the National Bureau of Standards
Ernest Ambler testified that it was critical that his organization work with state and local
government programs and “by working with them, and through them in some kind of cooperative
way that we will be most effective.”17
An issue currently under consideration is raising to 50% the federal contribution to the MEP
program. Some commentators argue that in the current difficult economic situation, state and
local financial support may be curtailed. At the same time, client fees for service decreased 13.4%
between FY2008 and FY2009, the first significant decline since FY1996.18 Advocates of
increasing the federal share note that such action would not release state and local partners of
their responsibility to support the centers, but would permit continued outreach to small
manufacturers without pricing the services out of reach.
Opponents of this approach argue that the one-third federal contribution is sufficient and that the
successful operation of the program is dependent on the financial participation of state and local
government as well as the companies that utilize the partnership. The House Committee on
Science report to accompany H.R. 1274 (which became P.L. 105-309) states: “The Committee
notes that the 33⅓% cap on federal contributions to all centers which have exhausted their

13 General Accounting Office, Manufacturing Extension Programs, Manufactures’ Views of Service, GAO/GGD-95-
216BR, August 1995, 2.
14 E.S. Oldsman, G.M. Ugiansky, and R. Jamin, Review of Mission and Operations of Regional Centers, National
Institute of Standards and Technology, Publication Citation, February 1, 1998, available at http://www.nist.gov/cgi-bin/
view_pub.cgi?pub_id=200288&divison=260.
15 Technology Competitiveness Act of 1987, 10.
16 Ibid., 17.
17 Senate Committee on Commerce, Science, and Space, Subcommittee on Science, Technology, and Space,
Department of Commerce Technology Programs Authorization, Senate Hearings 100-146, March 17, 1987, 26.
18 Slides provided by Roger D. Kilmer, Director, Hollings Manufacturing Extension Partnership, NIST, May 19, 2010.
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original 6-year life-cycles is a ceiling. The Committee supports efforts to make individual centers
more self-sufficient and less reliant on federal funding whenever possible.”19 The matching
provisions are seen as a means to ensure that the centers reflect the actual needs of the
manufacturing companies in the area they serve.
The America COMPETES Reauthorization Act of 2010 (P.L. 111-358) mandated that the GAO
explore and report on the cost share provisions of the MEP program. In response, GAO issued a
memorandum on April 4, 2011, that noted:
We were unable to provide recommendations on how best to structure the cost share
requirement to provide for the long-term sustainability of the program because we could not
identify criteria or a basis for determining the optimal cost share structure for this program.
Instead, we have identified a number of factors that could be taken into account in
considering modifications to the current cost share structure. Among other things, past GAO
work has found that cost share structures should promote equity by assigning costs to those
who both use and benefit from the services. As it applies to the MEP program,
manufacturers, state and local governments, and the nation may all benefit from the program
to varying degrees, requiring an evaluation of the relative benefits and aligning cost shares to
reflect who receives the benefits.20
The report continued that while NIST’s study of the cost share provision of the MEP program
“recommended that the cost share requirements should be consistent with those of other
economic development programs—which it noted, in Commerce, had 1:1 or lower cost share—
and should provide flexibility to alter the cost share requirement in response to economic
conditions,” in 2009 and 2011 the Congressional Budget Office had identified the MEP program
for “potential elimination from discretionary spending, stating that the program’s enhancement of
U.S. productivity is questionable.21
These and other issues may be debated as Congress continues to make appropriation decisions
relating to manufacturing extension as it pertains to the role of the federal government in
facilitating research and technological advancement.

Author Contact Information

Wendy H. Schacht

Specialist in Science and Technology Policy
wschacht@crs.loc.gov, 7-7066


19 House Committee on Science, National Institute of Standards and Technology Authorization Act of 1997, H.Rept.
105-64 to accompany H.R. 1274, 15.
20 Government Accountability Office, Factors for Evaluating the Cost Share of Manufacturing Extension Partnership
Program to Assist Small and Medium-Sized Manufacturers, GAO-11-437R, April 4, 2011, 4, available at
http://www.gao.gov/assets/100/97395.pdf.
21 Ibid., 4.
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