The MEP program traces its origins to the Manufacturing Technology which was established by NIST’s predecessor, the Centers Program,National Bureau of Standards (NBS). In July 1988, NBS published the first of 12 federal funding opportunity announcements that have been issued to date for the establishment of MEP centers.announcement led to the establishment of the first 3 centers in 1989, as part of an initial pilot program. By 1990, NBS had become NIST, and the agency published the second federal funding opportunity announcement for the establishment of two additional centers, bringing the total number of centers to 5. In 1992, NIST announced a federal funding opportunity for 2 more centers, bringing the total to 7. The number of centers grew rapidly thereafter, with a nationwide network of 44 centers in place by 1995. NIST has since added to its network and, as of 2013, has 60 centers that cover all 50 states and Puerto Rico. Appendix I provides a list of the 60 MEP centers. The original legislation authorizing the MEP program emphasized the transfer of advanced technologies developed within NIST and other federal laboratories to small and medium-sized manufacturing firms. As we reported in 1991, however, the centers soon found that firms primarily needed proven, not advanced, technologies because advanced technologies were generally expensive, untested, and too complex to be practical for most small manufacturing firms. a key mandate of the program was not realistically aligned with the basic needs of most small manufacturing firms. In recognition of this situation, NIST reoriented the program to focus on basic technologies that permitted firms to improve their competitive position. By the time we reported on the program in 1996, centers were providing a wide range of business services, including helping companies solve individual manufacturing problems, obtain training for their workers, create We reported, therefore, that marketing plans, and upgrade their equipment and computers. GAO, Technology Transfer: Federal Efforts to Enhance the Competitiveness of Small Manufacturers, GAO/RCED-92-30 (Washington, D.C.: Nov. 22, 1991). Next Generation Strategy and, in December 2008, NIST released its current strategic plan referred to by that name. The plan articulates NIST’s new vision for the program as a catalyst for accelerating manufacturing’s transformation into a “more efficient and powerful engine of innovation driving economic growth and job creation.” The plan also defines the program’s mission: “to act as a strategic advisor to promote business growth and connect manufacturing firms to public and private resources essential for increased competitiveness and profitability.” The plan focuses the program’s activities around the following five strategic areas: Continuous Improvement. This area includes enhancing manufacturing firms’ productivity and freeing up their capacity to provide them a stable foundation to pursue innovation and growth through services and programs that target manufacturing plant efficiencies. Technology Acceleration. This area includes developing tools and services to bring new product and process improvement opportunities to manufacturing firms, accelerating firms’ opportunities to leverage and adopt technology, connecting firms with technology opportunities and solutions, and making available a range of product development and commercialization assistance services. Supplier Development. This area includes developing and delivering the national capacity, tools, and services needed to put suppliers in a position to thrive in existing and future global supply chains. Sustainability. This area includes helping companies gain a competitive edge by reducing environmental costs and impact by developing new environmentally focused materials, products, and processes to gain entry into new markets. Workforce. This area includes developing and delivering training and workforce assistance to manufacturing firms, as well as expanding partnerships and collaborations to develop and deliver tools and services to foster the development of progressive managers and entrepreneurial CEOs. MEP centers work with manufacturing firms to plan and implement projects in these and other areas. For example, in 2011, the Delaware Valley Industrial Resource Center (DVIRC)—a MEP center in Pennsylvania—worked with a manufacturing firm in Hatfield, Pennsylvania, on a continuous improvement project when the company faced price increases from its vendors it did not want to pass on to its customers. DVIRC trained company staff on methods to achieve efficiencies and helped identify areas for improvement in the company’s production process, resulting in increased productivity and reduced inventory levels that allowed the company to save space and lower costs, as reported by the manufacturing firm. Similarly, the Texas MEP center worked with a manufacturing firm in El Paso, Texas, on a sustainability project in 2013. The MEP center and the firm partnered with New Mexico State University’s Institute for Energy and the Environment on an economy, energy, and environment (E3) project that included training and an effort to identify inefficiencies in the manufacturing process. As a result of this partnership, the firm reported saving 40,000 gallons of water and reducing solid waste by 56 tons, among other accomplishments. NIST has recently begun developing a new strategic planning process for the MEP program to update its Next Generation Strategy. According to NIST officials, the process will include extensive participation by stakeholders, including MEP centers. NIST expects to implement the planning process through the spring of 2014 and release an updated strategic plan shortly after the planning process is complete. The program has also evolved in its matching fund requirements. The program as originally implemented provided federal funding to reimburse each $1 of nonfederal contributions with no more than $1 of federal funding—referred to as a 1:1 cost share—for the first 3 years that a center operated. For the fourth year of operation, every $3 of nonfederal contributions were reimbursed with $2 of federal funding—referred to as a 3:2 cost share. For the fifth and sixth years of operation, every $2 of nonfederal contributions were reimbursed with $1 of federal funding— referred to as a 2:1 cost share. Under the original legislation, federal funding was scheduled to end once a center had operated for 6 years. The 6-year federal funding limit was temporarily suspended by the fiscal year 1997 and 1998 appropriations acts and was eliminated in 1998 when Congress passed legislation changing the program to, among other things, provide for continued federal funding and set the cost share at 2:1 for all centers that had been in operation for at least 6 years. NIST spent $608.3 million in federal funding on the MEP program in fiscal years 2009 through 2013 and used most of these funds to directly support MEP centers and their work with manufacturing firms. Specifically, NIST spent $494.6 million on cooperative agreement awards and competitive grant awards to MEP centers, which NIST considers to be direct support. NIST spent $78 million for contracts, and for NIST staff salaries and benefits, some of which NIST considers direct support and some administrative spending. The remaining $35.7 million was spent for agency-wide overhead charges and travel, training, performance awards, and other items, all of which NIST considers administrative spending. NIST defines direct support as spending that directly supports the MEP center system’s work with manufacturing firms, such as awards to centers or spending on training for MEP center staff. NIST considers all other spending to be administrative, including spending on performance evaluations of centers and on agency-wide overhead charges that pay for facilities operations and maintenance at the NIST campus. NIST is not required to track, and historically has not tracked, administrative spending, but NIST officials told us the agency developed its definitions of direct support and administrative spending in fiscal year 2013 in response to congressional interest. It then conducted an analysis of fiscal year 2013 federal MEP program spending using those definitions. NIST estimated that about 88.5 percent of federal MEP program spending in fiscal year 2013 was for direct support, and the remaining 11.5 percent was administrative. (See fig. 2.) It is not possible to determine whether NIST’s amount of administrative spending is appropriate because there is no standard definition of administrative spending for federal programs. In addition, conducting the analysis using different definitions could produce different results. There is no standard definition of administrative expenses for federal programs. Executive Order 12837, issued on February 10, 1993, called on the Director of the Office of Management and Budget (OMB) to establish a definition of administrative expenses for agencies, but OMB did not develop a definition. Definitions and reporting of administrative expenses vary across public and private entities depending on their mission, priorities, services, clients, and on the purposes for which management needs the information. NIST spent $471 million on MEP center cooperative agreement awards in fiscal years 2009 through 2013. NIST considers all of this spending direct support. Federal funds for center cooperative agreements can be used by MEP centers for capital and operating and maintenance expenses. As stated earlier, these funds are awarded contingent on each MEP center meeting its cost-share requirement and having positive performance evaluations. NIST officials told us that spending on cooperative agreements and spending on staff salaries and benefits are NIST’s top spending priorities. In fiscal years 2009 through 2013, NIST spent $23.6 million on awards to centers that were granted on a competitive basis. These awards are made in addition to cooperative agreement awards. The bulk of these awards went to two competitive grant programs; about $12.7 million was awarded to MEP centers through the Expansion of Services Cooperative Agreement Recipients (E-CAR) competition, and about $7.3 million was awarded through the Tool Development Cooperative Agreement Recipients (T-CAR) competition. NIST also awarded a small amount through grant competitions conducted under two other programs: the Advanced Manufacturing Jobs and Innovation Accelerator Challenge, and the Energy-Efficient Buildings Hub project.the competitive grants that it awarded under the four programs encourage projects in the five strategic areas identified in the MEP program’s strategic plan.