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Bargain Hunters

They've found your source of cheap consulting, and they're turning off the tap.

Small manufacturers struggling for profits may no longer be able to count on inexpensive consulting from about 400 technical assistance centers nationwide. Those centers receive about one-third of their budget from the Manufacturing Extension Partnership (MEP), a federal program run by the National Institutes of Standards and Technology (NIST). President Bush wants to pull federal funding from nearly all the centers.

The centers consult on process improvement, quality management systems, business management systems and other areas. Besides federal funds, they depend on state and local funding for another third of their budget and client fees for the remaining third. In at least 34 states, state funding is linked to federal funding, according to Michael Wojcicki, president of the Modernization Forum, the trade association for MEP centers. As a result, President Bush's proposal to slash federal funding from $106.5 million to $12.9 million in fiscal 2003 could seriously impair the centers' ability to operate.

Showing a Bias

Sen. John F. Kerry (D-MA), chairman of the Committee on Small Business and Entrepreneurship, has introduced a bill (S. 1994) that would give 8(a) firms located in HubZones "priority preference" over non-8(a) HubZone companies, as was originally intended when Congress enacted the bill in 1997. Kerry's bill also increases the sole-source contract ceiling by $1 million in both programs to $4 million for goods and services and $6 million for manufacturing.


Stephen Barlas is a freelance business reporter who covers the Washington beat for 15 magazines.

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This article was originally published in the July 2002 print edition of Entrepreneur with the headline: Bargain Hunters.

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