Last week, Colorado Senator Michael Bennet announced that Manufacturer’s Edge (formerly Colorado Association of Manufacturing and Technology) is the recipient of a five-year, $8.34 million grant from the U.S. Department of Commerce's (DOC) National Institute of Standards and Technology (NIST). As Bennet’s release outlined, "Manufacturer's Edge was one of 10 state MEP centers selected for funding in a nationwide competition. NIST awarded a total of $130 million in funding to help MEP centers increase their services and customer base. The new cooperative agreements are for five years, subject to availability of funding and successful annual reviews."
I asked Tom Bugnitz, CEO of Manufacturer’s Edge (ME) and occasional columnist for CompanyWeek, to elaborate on the award and assess Colorado's manufacturing landscape.
Q: Tom, congratulations on the $8.34 million Department of Commerce grant. In announcing the award Senator Bennet said, "These additional resources will allow the organization to expand their current services, reach new customers, and continue their great work in Colorado." To be clear, are these additional funds or does the money comprise ME's annual operating budget?
A: Thank you, Bart, and thanks for the opportunity to talk about this. As you can imagine we’re excited about being selected as the MEP center of the next five years.
The short answer to your question is that NIST has increased our funding by two and a half times.
Since the local Manufacturing Extension Partnership center (MEP) was established in Colorado, NIST has provided $665,201 per year to support the center, subject to our finding a 2:1 match of those funds, or $1.3 million. (We did that by selling consulting and training services each year.) This award increases that annual amount by over a million dollars per year, and reduces the match to 1:1. Not only will there be more money coming into Colorado to help manufacturers, they have made it easier for us to use that money.
Q: Explain the process: ME was asked to prove its worth in a lengthy process last fall known as a 're-compete' to qualify for the federal funds. Who were you competing with, and is this process common across the country?
Being chosen as a state's MEP center is the result of a competitive process in which any nonprofit organization, university, community college, or state agency can apply to be the center. The result of that competition is a contract and financial award to operate as the state’s MEP center and receive NIST funding. Currently there are 60 MEP centers in the U.S., with at least one in each state and Puerto Rico.
As part of a larger review of the national MEP system, the MEP centers in all 50 states and Puerto Rico will be opened up for re-competition over a 4 year period, which started with a first round in August of 2014. During that round 10 MEP centers, including Colorado, were opened for competition.
Our previous contract was in its third year of five when we agreed to open up the MEP contract for an open competition with any other organization in the state. By doing this, we guaranteed the $1 million increase in federal funding to Colorado, regardless of who was ultimately awarded the contract.
We don't know how many other proposals were received by NIST or who the proposers were, and NIST will likely not reveal that information.
Q: The federal government is focused on manufacturing. In addition to ME's grant, Colorado and other states have been the beneficiary of significant financial support, awards designed to shore up U.S manufacturing. Can you provide some national context to ME's award?
The Obama administration has consistently focused on building, re-building, and advancing manufacturing and manufacturing methods. The MEP system represent the "boots on the ground" of that effort, and funding for the system as a whole has remained stable or increased in the last few years, going against the trend of most federal programs. Overall the MEP system is a $140 million program.
The 800-pound gorilla in federal and state manufacturing efforts is the federal government’s National Network for Manufacturing Innovation Institutes. In 2013 the President proposed $1 billion be invested in 15 Innovation Institutes. To date, five have been started (with initial investments of $120 million and expected investments this year of another $150 milliob), including three in which Colorado participates: Digital Manufacturing and Design, Lightweight Metals and Materials Manufacturing, and Advanced Composites Innovation.
Q: A notable difference that you reference in Senator Bennet's release is ME's broad charter, to provide resources and assistance to manufacturers across industry sectors. How does ME's charter differ from or complement other federal or regional efforts?
The main difference is our singular focus on helping individual companies grow and create jobs. As I mentioned before, we are the boots on the ground, applying resources directly to companies based on their needs and particular circumstances. We're out every day with manufacturers listening to their concerns and developing programs to address them.
That said, there are a large number of programs aimed at manufacturers in Colorado. We look at all of those programs and ask one question: How can we use our resources to leverage those programs and create better results for manufacturers?
As an MEP center, NIST allows wide latitude about what programs or services we offer, but also expects us to not only respond to the direct needs of Colorado manufacturers but also support state initiatives that help manufacturers over the longer term. As examples, we have used the Colorado Blueprint as part of our plans, and have supported the SMART initiative from OEDIT since day one.
If a program helps manufacturers, we want to help that program.
Q: You've written in CompanyWeek about the need to get resources directly to manufacturers. Describe the state of Colorado manufacturing?
To be as blunt and direct as possible, Colorado manufacturing is diverse, it's strong, and it's growing. But not all manufacturing sectors are sharing in the growth. Some industry sectors and individual manufacturers that are hurting, and the workforce shortage is constraining manufacturers all across the state.
We can describe Colorado manufacturing by numbers that tell part of the story. There are roughly 5,600 manufacturing companies in Colorado employing about 133,000 workers in 21 different manufacturing sectors. 64 percent of those companies employ less than 10 people, and only 10 percent employ over 50 people.
That means we must do things that directly help small manufacturers hire new people, find new markets, and develop new products and capabilities. Right now, manufacturers across the state are creating regional organizations to help define the regional needs that companies like MEP can address and to create formal and informal networks of suppliers and customers within the state to grow local businesses. Individual companies are standing up and leading the charge for workforce development and capital access. We have the potential and foundation to do much more, and people all over the state are beginning to act on that potential.
We have a chance to do great things in manufacturing in the next 10-20 years, and we can establish Colorado as a leader in manufacturing technology and innovation.
Reach Tom Bugnitz at email@example.com.