Problems, Solutions, & Results

Florida MEP - The Florida MEP program was established in 1995 as a 501(c)(3) organization under the name of the Florida Manufacturing Technology Center (FMTC). The Center’s operating funds included $3 million from NIST MEP and $3 million in state appropriations.

Problem - FMTC lost its state funding in 1999, causing a reduction in staff from 117 to 60. Over the next year, debt grew, reaching a $1.8 million loss in 2000. In the spring of 2001, MEP MSI was invited to audit the Center and recommend solutions for improvement. Auditors found missing documents and questioned costs of over $300,000. Bank reconciliations were not completed for two years and A-133 audits had not been performed for 16 months, leaving the program on the verge of filing bankruptcy.

Solution - FMTC’s cooperative agreement was assigned to Maine MEP, which helped the Center draw down its federal funds. The Board also approved changing the name from FMTC to Florida MEP, and hired MEP MSI as its Managing Agent. Within 90 days, MEP MSI negotiated with vendors for payments and worked with the bank to restructure the Center’s debt; restructured the staff; eliminated unnecessary satellite locations; relocated the main office based on a better lease agreement; and instituted a systematic business approach to conducting projects to generate impact using Time Wise tools.

Results - Today, Florida MEP is financially solvent and prospers. The fiscal year ending April 2004 showed a net gain of $800,000 (shown right). State funding has not yet been restored, but the Center works with the state on a number of different grants. Average revenue per field staff increased from $25,000 in FY2001 to $125,000 in FY2004. Since MEP MSI became the Managing Agent, Florida MEP has also expanded its funding sources to include the state Incumbent Workers Training Program, and EDA and DOL funds, totaling about $10 million in grants.

Rhode Island Manufacturing Extension Services

Problem - Rhode Island Manufacturing Extension Service (RIMES) is a center with a very modest amount of federal funding and spends a disproportionate amount of resources on its back room services such as accounting, reporting and managing the NIST survey process. By September 2004, the Center was two quarters behind on NIST reporting and approaching a NIST survey with an unmanageable number of clients to follow through the process.

Solution - MEP MSI contracted with RIMES in the fall of 2004 to provide the back room support services related to NIST reporting, accounting and information technology. Also, as a participant in the New England Defense Manufacturing Supply Chain Initiative, RIMES has been receiving about $500,000 a year in DoD related support to expand contract opportunities for SMEs in defense and commercial supply chains.

Results - Since joining the MEP MSI network, the Executive Director and the Director of Operations have been able to redirect their energies to the high level work of developing partnerships and major business relationships and providing an increasingly in-depth level of service to its clients. RIMES is now meeting its reporting schedule, able to draw down its full funding, and has an increased level of comfort about its financials. The most significant accomplishment the Center has realized is in the area of the annual client survey. In one quarter the Center was able to bounce back from a Minimally Acceptable Impact Measure (MAIM) score of 50 to a score of 100, meeting or exceeding the performance of the median center in the national system in the areas of cost per impacted client, bottom line client impact and response rate.

Maine MEP - Maine MEP was established in 1995 as a program of the Maine Science and Technology Foundation, a state chartered organization whose purpose was not directly related to manufacturing.

Problem - Actual delivery of services was conducted through three independently operated centers that all had different branding, missions, and ideas of how to serve the manufacturing community. Multiple identities detracted from the ability to serve clients, and diluted the program.

Solution - The newly hired Center director implemented an innovative business approach, which called for:

      •  Consolidating the MEP management and service delivery functions and responsibilities into one center
      •  Spinning off the Center as an independent 501(c)(3) organization with a cooperative agreement from NIST MEP
      •  Collocated project managers within the state’s economic development districts
      •  Creation of a "brand" that presented one consistent message to the marketplace
      •  Entrance into partnerships with the major state programs

Results - The Maine MEP is now recognized by the Department of Economic and Community Development as the #1 deliverer of services in the State’s economic development strategic plan. Strong partnerships and consistent performance have helped the Center pursue a number of funding opportunities. Maine MEP is now a model of an organization stabilized by diversified funding.

Massachusetts MEP - The Massachusetts MEP (MassMEP) was established in 1996 as a program of a quasi-state agency that held the cooperative agreement with NIST MEP. The delivery of services was provided by five regional centers with their own independent operating regions.

Problem -This arrangement yielded competitive territories: five boards of directors, five center directors, five chief financial officers, and other duplicative overhead expenses. Performance declined, as did NIST funding. Eventually, the five centers lost favor with NIST MEP and the Commonwealth of Massachusetts. Ultimately, the state threatened to eliminate funding.

Solution - MEP MSI:

      •  Consolidated the regional centers into a single program
      •  Cost savings from elimination of duplicative overhead and developed a mixed delivery model based on sustainable impacts
      •  Created partnerships with manufacturing associations and universities
      •  Began using Time Wise Solutions suite of products, which grew sales
      •  Diversified funding through a number of other federal and non-federal sources

Results - Today, MassMEP is a viable center with 31 employees and a savings of over $500,000 in administrative overhead costs.

      •  Average annual sales have steadily increased from $250,000 in FY2001 to an estimated $2.4 million by the end FY2005
      •  State funding of $850,000/year secured; $3,000,000 for three years from the DOL; a DoD related contract for $500,000/year for two
         years as a participant in the New England
      •  Defense Manufacturing Supply Chain Initiative; and $200,000 Congressional member requests for DOL training in FY2004
      •  Passed A-133 audits with no findings

New Hampshire MEP - Established in 1996, the New Hampshire MEP program (NH MEP) was hosted by the Nashua Community Technical College. Poor strategic insight on the part of management placed the Center in a position to be seen as a competitor to the technical college system, to the state’s economic development system, and third-party consultants.

Problem - By the end of 1998, the NH MEP lost favor with the Nashua Community Technical College System and the New Hampshire Department of Resource and Economic Development (DRED), its two major partners. Compared to other states with a similar number of manufacturers, NH MEP got a disproportionately lower amount of federal funds from NIST MEP.

Solution - In 1999, MEP MSI was requested by NIST MEP to make NH MEP viable. Within 90 days, MEP MSI restructured the program, instituted good working relationships with state partners, and established a systematic business approach to conducting projects that would generate impact. MEP MSI also engaged a strategy to secure additional funds to bolster the reach of the NH MEP program.

Results - Within two years, MEP MSI augmented NH MEP’s cooperative agreement with funding from: the Department of Labor, $1.5 million to support innovation capacity growth in high technology SMEs; and the Department of Defense related contracts, $500,000 per year for two years as a participant in the New England Defense Manufacturing Supply Chain Initiative. This has resulted in additional partnerships and a stronger relationship with DRED, the technical college system and other organizations providing assistance to manufacturers.