Trade Adjustment Assistance for Firms Program Fiscal Year 2009 Annual Report
Federal RegisterJan 15, 2010
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DEPARTMENT OF COMMERCE
Economic Development Administration
Trade Adjustment Assistance for Firms Program Fiscal Year 2009 Annual Report
AGENCY:
Economic Development Administration, Commerce.
Action:
Notice.
SUMMARY:
The Secretary of Commerce is directed by Section 1866 of the Trade and Globalization Adjustment Assistance Act of 2009 (TGAAA), which became effective May 17, 2009, to submit to Congress a report on the Trade Adjustment Assistance for Firms (TAAF) program by the 15th of December each year. The TAAF Program is one of four Trade Adjustment Assistance (TAA) programs authorized by the Trade Act of 1974 (Trade Act). The mission of the TAAF Program is to provide technical and financial assistance to U.S. firms affected by import competition. The program provides assistance in the development of business recovery plans, which are known as Adjustment Proposals under Section 252 of the Trade Act, and matching funds to implement projects outlined in the Adjustment Proposals. The TAAF Program supports a national network of 11 Trade Adjustment Assistance Centers (TAACs) to help U.S. firms apply for assistance and prepare and implement strategies to guide their economic recovery.
Overall, there has been an increase in the demand for the TAAF Program in fiscal year 2009, as demonstrated by the increase in the number of petitions for certification and Adjustment Proposals submitted to EDA for approval.
Fiscal year
Petitions
received
Petitions
accepted
for filing
Petitions
certified
Petitions
denied
Avg. days
between
submission
and
acceptance
Avg. days
between
acceptance
and
certification
2009
281
247
212
1
28
45
2008
188
1
190
183
0
11
45
Change
49%
30%
16%
NA
155%
NA
1
Two of the petitions accepted for filing in FY 2008 were received by EDA in FY 2007.
Because of the spike in petitions and Adjustment Proposals, the Economic Development Administration (EDA) experienced challenges in meeting the 40-day processing deadline for petitions accepted for filing immediately after the new legislation was enacted. Beginning in the fourth quarter of FY 2009, the average processing time for petitions has started to decline below the 40-day requirement. Additional TAAF staff resources are expected to help improve the processing time even further for FY 2010.
TAACs effectively reached small and medium-sized firms in FY 2009. The average employment, net sales, and productivity of firms certified in FY 2009 declined in comparison to the previous fiscal year. Sixty-five percent of all firms proposed to implement a marketing/sales project or production/engineering project in their Adjustment Proposals, and 35 percent of all firms proposed support systems or management/financial projects.
FY
Avg.
employment at
certification
Avg. annual
net sales at
certification
Avg.
productivity at
certification
(net sales per employee)
2009
77
$10,715,785
$128,729
2008
82
$13,081,993
$149,565
% Change
(6%)
(18%)
(14%)
The following table illustrates that in FY 2009 EDA approved an additional 33 Adjustment Proposals as compared to FY 2008 and proposed to spend an additional total of $2.4 million in government funds.
Approved TAAF Adjustment Proposals
FY 2003
FY 2004
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
Number of Plans Approved
162
177
132
137
126
139
172
Total Government Share (millions)
$8.1
$8.5
$5.9
$6.7
$7.1
$7.9
$10.3
Total Firm Share (millions)
$7.4
$8.1
$5.4
$6.0
$5.9
$7.5
$9.8
Total Projected Costs (millions)
$15.5
$16.6
$11.3
$12.7
$13.0
$15.4
$20.2
Avg. Government Assistance Per Firm
$50,000
$48,023
$44,697
$48,905
$56,449
$56,827
$60,123
The TGAAA identifies 14 measures that should be covered by this report. EDA currently is unable to provide any information on four measures: (1) The number of firms that inquired about the program, (2) the number of petitions certified by congressional district, (3) the number of firms leaving the program and why, and (4) sales, employment, and productivity at each firm upon completion of the program and every year for the two years thereafter. EDA is taking steps to collect and report on all of the missing measures for the FY 2010 Annual Report.
ADDRESSES:
Trade Adjustment Assistance for Firms Division, Room 7106, Economic Development Administration, U.S. Department of Commerce, Washington, DC 20230.
FOR FURTHER INFORMATION CONTACT:
Bryan Borlik, Director of the TAAF Program, 202-482-3901.
SUPPLEMENTARY INFORMATION:
Table of Contents
Introduction
Program Initiative
Program Description
Data for This Report
Results/Findings
(1) The number of firms that inquired about the program.
(2) The number of petitions filed under section 251.
(3) The number of petitions certified and denied.
(4) The average time for processing petitions.
(5) The number of petitions filed and firms certified for each Congressional district of the United States.
(6) The number of firms that received assistance in preparing their petitions.
(7) Sales, employment, and productivity at each firm participating in the program at the time of certification.
(8) The number of firms that received assistance developing business recovery plans (Adjustment Proposals).
(9) The number of Adjustment Proposals approved and denied by the Secretary of Commerce.
(10) The financial assistance received by each firm.
(11) The financial contribution made by each firm.
(12) The types of technical assistance included in the Adjustment Proposals of firms participating in the program.
(13) The number of firms leaving the program before completing the project or projects in their Adjustment Proposals and the reason the project was not completed.
(14) Sales, employment, and productivity at each firm upon completion of the program and each year for the two-year period following completion.
Discussion and Analysis
Conclusion
Introduction
This report is provided in compliance with Section 1866 of the Trade and Globalization Adjustment Assistance Act of 2009 (Sec. 1866, Pub. L. 111-5, 123 Stat. 115, at 367) (TGAAA). This section directs the Secretary of Commerce to provide an annual report
on the Trade Adjustment Assistance for Firms (TAAF) program by the 15th of December each year. Section 1866 of the TGAAA states:
IN GENERAL.—Not later than December 15, 2009, and each year thereafter, the Secretary of Commerce shall prepare a report containing data regarding the trade adjustment assistance for firms program provided for in chapter 3 of title II of the Trade Act of 1974 (19 U.S.C. 2341
et seq.
) for the preceding fiscal year.
This report will provide findings and results to the extent that the data is available on the following 14 measures:
1. The number of firms that inquired about the program.
2. The number of petitions filed under section 251.
3. The number of petitions certified and denied.
4. The average time for processing petitions.
5. The number of petitions filed and firms certified for each congressional district of the United States.
6. The number of firms that received assistance in preparing their petitions.
7. The number of firms that received assistance developing business recovery plans (Adjustment Proposals).
8. The number of Adjustment Proposals approved and denied by the Secretary of Commerce.
9. Sales, employment, and productivity at each firm participating in the program at the time of certification.
10. Sales, employment, and productivity at each firm upon completion of the program and each year for the two-year period following completion.
11. The financial assistance received by each firm participating in the program.
12. The financial contribution made by each firm participating in the program.
13. The types of technical assistance included in the Adjustment Proposals of firms participating in the program.
14. The number of firms leaving the program before completing the project or projects in their Adjustment Proposals and the reason the project was not completed.
The TAAF program is one of four Trade Adjustment Assistance (TAA) programs authorized under the Trade Act of 1974 (19 U.S.C. 2341
et seq) (Trade Act).
The responsibility for administering the TAA for Firms program is delegated by the Secretary of Commerce to the Economic Development Administration (EDA). EDA, through a national network of 11 Trade Adjustment Assistance Centers (TAAC), provides technical assistance on a cost-shared basis to U.S. manufacturing, production, and service firms in all fifty states, the District of Columbia, and the Commonwealth of Puerto Rico.
The other TAA programs are TAA for Workers, Farmers, and Communities, which are administered by the Departments of Labor, Agriculture, and Commerce through EDA, respectively.
EN15JA10.019
The TAAF Program is relatively small. Between FY 2000 and FY 2009, its appropriations have ranged from $10.5 million to $15.8 million.
Program Initiative
The mission of the program is to provide technical and financial assistance to U.S. firms affected by import competition. The program provides assistance in the development of business recovery plans, which are known as Adjustment Proposals under Section 252 of the Trade Act, and matching funds to implement projects outlined in Adjustment Proposals.
The program's premise is that some U.S. firms, in particular small businesses, lack the internal capabilities or resources necessary to effectively respond to new import competition. The Trade Adjustment Assistance Centers' goal is to help U.S. firms increase profitability and retain employees while competing successfully in the global economy.
Program Description
The TAAF Program supports a national network of 11 Trade Adjustment Assistance Centers (TAAC) to help U.S. firms apply for assistance and prepare and implement strategies to guide their economic recovery. Information about the TAACs may be found at www.taacenters.org. The current TAACs and the states they serve are listed in the table below. Please note that currently Puerto Rico has not been assigned to any particular TAAC. Firms
in Puerto Rico receive assistance from the TAAC that received the inquiry.
Exhibit 2—TAACs and Their Respective Service Areas
TAAC
States served
Great Lakes
Indiana, Michigan, and Ohio.
Mid-America
Arkansas, Kansas, and Missouri.
Mid-Atlantic
Delaware, District of Columbia, Maryland, New Jersey, Pennsylvania, Virginia, and West Virginia.
Midwest
Illinois, Iowa, Minnesota, and Wisconsin.
New England
Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.
New York State
New York.
Northwestern
Alaska, Idaho, Montana, Oregon, and Washington.
Rocky Mountain
Colorado, Nebraska, New Mexico, North Dakota, South Dakota, Utah, and Wyoming.
Southeastern
Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee.
Southwest
Louisiana, Oklahoma, and Texas.
Western
Arizona, California, Hawaii, and Nevada.
The TAACs' main responsibilities are:
• Assisting firms in preparing their petitions for TAAF. Firms are not charged for any assistance related to preparing a petition.
• Once a petition has been approved, TAACs work closely with company management to identify the firm's strengths and weaknesses and develop a customized Adjustment Proposal designed to stimulate recovery and growth. The program pays up to 75% of the cost of developing an Adjustment Proposal and the firm must pay the rest. EDA must approve all Adjustment Proposals to ensure they conform to statutory and regulatory requirements.
• After an Adjustment Proposal has been approved, company management and TAAC staff jointly identify consultants with the specific expertise required to assist the firm. The program pays up to $75,000 in matching funds for the cost of these consultants when implementing the Adjustment Proposal. After a competitive procurement process, the TAAC and the firm generally contract with private consultants to implement the adjustment plan.
There are three main phases to receiving technical assistance under the program. The phases are (1) Petitioning for certification, (2) recovery planning, and (3) project implementation.
EN15JA10.020
Eligibility to Apply for Trade Adjustment Assistance” and any supporting documentation. Although a firm may complete a petition and submit it to EDA on its own, certification specialists within the TAACs generally work with the firm at no cost to complete and submit a petition to EDA. Once a petition has been accepted, EDA is required to make a final determination on a petition within 40 days.
2
2
As of May 17, 2009, the deadline for making a final determination is 40 days. Before May 17, 2009 EDA had 60 days to make a determination.
Certified firms may then submit an Adjustment Proposal for EDA's approval. It generally takes EDA between two weeks to one month to make a final determination on an Adjustment Proposal, depending on the workflow.
The firm works with consultants to implement projects in an approved Adjustment Proposal. As projects are implemented and if the firm is satisfied
with the work, the firm will first pay their match to the consultant and then send a notice to the TAAC stating that they are satisfied with the work and that they have paid their matching share. The TAAC will then pay the federal matching share. Firms have up to five years from the date of an Adjustment Proposal's approval to implement it, unless they receive approval for an extension. Generally, firms complete the implementation of their Adjustment Proposals over a two-year period.
Data for This Report
Most of the data used in this report were collected from the petitions for certification and the Adjustment Proposals submitted by the TAACs on behalf of firms. Data from these sources were recorded into a central database by Eligibility Reviewers at EDA. Results for average processing times and the number of approved and denied petitions and Adjustment Proposal were derived by EDA.
All of the data available for Fiscal Years (FY) 2009 and 2008 were used for this report. One weakness to the data sets used is that a few records were incomplete. EDA has identified data collection deficiencies and plans to train EDA and TAAC staff in order to eliminate, to the extent possible, problems that result in incomplete records.
The performance measures in this report were evaluated by looking at quarterly trends and comparing results for FY 2009 and FY 2008. In addition, characteristics of the petitioning and certified firms were aggregated and reported as averages to provide a general profile for these firms.
Results/Findings
(1) The number of firms that inquired about the program.
Because of the decentralized nature of the TAAF Program, EDA currently does not collect reliable information on the number of firms that inquire about the TAA program. EDA is working with the TAACs to collect this data and will include this measure in the revised quarterly report submitted by the TAACs to EDA. EDA is expecting to start collecting this data by the end of December 2009.
(2) The number of petitions filed under section 251.
(3) The number of petitions certified and denied.
(4) The average time for processing petitions.
In FY 2009, there was a 49 percent increase in the number of petitions received by EDA, a 16 percent increase in the number of certified firms, and on average the total petition processing time increased by 17 calendar days, which period is defined as the period between actual submission of a petition by the TAAC and final determination, that is certification or rejection, by EDA.
After accepting a petition for filing, EDA has 40 calendar days to make a final determination. In order to avoid having to reject many of the petitions, EDA does not consider a petition accepted until all the necessary information is collected. When considering the duration between the time of submission and when a final determination is made, the processing time for petitions increased by 17 days in FY 2009 as compared to FY 2008. For the average petition, in both FY 2008 and FY 2009 it took 45 days to make a final determination after it had been accepted for filing under section 251 of the Trade Act.
Exhibit 4—Petitions for Certification FYs 2009 and 2008 Summary Comparison
FY
Number of
petitions
received
Number of
petitions
accepted
for filing
Number of
petitions
certified
Number of
petitions
denied
Average days
between
submission
and
acceptance
for filing
Average days
between
acceptance and
certification
2009
281
247
212
1
28
45
2008
188
3
190
183
0
11
45
% Change
49
30
16
N/A
155
N/A
3
Two of the petitions accepted for filing in FY 2008 were received by EDA in FY 2007.
Exhibit 5—Petitions for Certification by State and TAAC
FY 2009 Petitions for Certification
TAAC
State
Number of
petitions
received
Number of
petitions
accepted
for filing
Number of
petitions
certified
Number of
petitions
denied
Average days
between
submission
and
acceptance
Average days
between
acceptance and
certification
IN
7
7
7
0
MI
13
11
10
0
OH
8
7
5
0
Great Lakes
Total
28
25
22
0
25
43
AR
2
2
2
0
KS
3
2
2
0
MO
13
10
8
0
Mid-America
Total
18
14
12
0
37
49
DC
0
0
0
0
41
DE
0
0
0
0
MD
0
0
0
0
NJ
1
1
4
2
0
PA
22
18
16
0
VA
1
1
0
0
WV
0
0
0
0
Mid-Atlantic
Total
24
20
18
0
32
IA
2
2
1
0
IL
28
27
23
0
MN
8
7
6
0
WI
10
9
6
0
Midwest
Total
48
45
36
0
26
47
CT
10
9
9
0
MA
28
25
24
0
ME
2
1
1
0
NH
8
8
6
0
RI
8
8
7
0
VT
0
0
0
0
New England
Total
56
51
47
0
24
35
New York State
NY Total
16
13
11
0
28
46
AK
1
0
0
0
ID
0
0
0
0
MT
2
1
0
0
OR
5
6
5
0
WA
6
5
5
0
Northwest
Total
14
12
10
0
33
31
CO
12
11
11
0
ND
1
1
0
0
NE
0
0
0
0
NM
2
2
2
0
SD
0
0
0
0
UT
4
3
2
0
WY
0
0
0
0
Rocky Mountain
Total
19
17
15
0
26
49
AL
0
0
0
0
31
44
FL
2
2
2
0
GA
4
4
3
0
KY
0
0
0
0
MS
0
1
0
0
NC
13
11
10
0
SC
0
0
0
0
TN
0
0
0
0
Southeastern
Total
19
18
15
0
31
44
LA
2
1
1
0
OK
12
11
9
1
TX
9
8
7
0
Southwest
Total
23
20
17
1
AZ
1
1
0
0
CA
15
11
9
0
HI
0
0
0
0
NV
0
0
0
0
Western
Total
16
12
9
0
44
37
4
One of the petitions certified from FY 2009 was received by EDA in FY 2008.
(5) The number of petitions filed and firms certified for each congressional district of the United States.
EDA did not collect the number of petitions filed and certified by congressional district in FY 2009. EDA has revised Form ED-840P and is currently undergoing the required Paperwork Reduction Act (PRA) analysis. EDA has incorporated this measure into the revised Form ED-840P, which is currently being submitted to the Office of Management and Budget (OMB) for PRA clearance. In the interim, TAACs have been instructed to identify applicants' congressional districts in supporting documentation submitted with the petition.
(6) The number of firms that received assistance in preparing their petitions.
Although EDA has not previously recorded whether a petitioning firm received assistance in preparing their petition, EDA understood that all firms who submitted petitions through TAACs received assistance from the respective TAAC. EDA has revised Form ED-840P to more accurately record whether firms receive assistance and from whom. Exhibit 6 shows the number of petitions submitted by each TAAC.
EN15JA10.021
(7) Sales, employment, and productivity at each firm participating in the program at the time of certification.
For those firms certified in FY 2009, average employment was by six percent below that for firms certified in FY 2008. Average net sales were 18 percent below, and average productivity was 14 percent below. For the purposes of this report, productivity is defined as net sales per employee. Since the certified firms are in various industries, which have a variety of ways to measure productivity, sales per employee was chosen as the productivity measure. This measure is used because it is simple and can be generally applied to all certified firms.
Exhibit 7—Summary Comparison of Average Employment, Net Sales, and Productivity for Firms Certified in FYs 2009 and 2008
FY
Average
employment at
certification
Average annual
net sales at
certification
Average
productivity at certification
(net sales
per employee)
2009
77
$10,715,785
$128,729
2008
82
$13,081,993
$149,565
% Change
(6%)
(18%)
(14%)
Exhibit 8—Average Employment, Net Sales, and Productivity for Firms Certified in FY 2009 Classified by State and TAAC
TAAC
State
Monthly
average
employment
Averag annual
net sales
Average
productivity
(net sales per
employee)
IN
60
$6,563,817
$90,814
MI
88
13,511,133
169,359
OH
121
21,163,407
163,563
Great Lakes
Average
86
13,039,777
143,050
AR
23
2,462,000
106,279
KS
114
7,847,500
69,224
MO
159
5,786,387
94,504
Mid-America
Average
129
5,575,841
92,253
DC
0
0
0
DE
0
0
0
MD
0
0
0
NJ
53
6,195,713
115,674
PA
77
9,535,754
125,789
VA
0
0
0
WV
0
0
0
Mid-Atlantic
Average
74
9,164,638
124,665
IA
29
1,365,689
47,093
IL
66
11,027,769
153,625
MN
85
9,328,702
121,189
WI
249
33,110,952
158,130
Midwest
Average
99
14,156,731
146,011
CT
54
8,008,737
116,324
MA
39
6,070,712
146,199
ME
8
405,912
49,501
NH
47
5,468,664
121,973
RI
79
6,903,936
164,784
VT
0
0
0
New England
Average
48
6,368,535
138,096
New York State
Average
73
9,339,480
108,707
AK
0
0
0
ID
0
0
0
MT
0
0
0
OR
189
3,229,683
61,458
WA
11
1,500,700
103,599
Northwestern
Average
100
2,365,191
82,529
CO
97
34,035,214
140,439
ND
0
0
0
NE
0
0
0
NM
74
4,408,313
64,871
SD
0
0
0
UT
80
11,181,050
150,881
WY
0
0
0
Rocky Mountain
Average
92
27,037,738
131,755
AL
0
0
0
FL
78
7,084,047
138,109
GA
34
3,183,356
107,743
KY
0
0
0
MS
0
0
0
NC
111
24,225,837
155,842
SC
0
0
0
TN
0
0
0
Southeastern
Average
91
17,731,769
143,858
LA
45
3,121,252
69,361
OK
51
3,689,045
67,355
TX
46
5,504,869
110,700
Average
48
4,403,338
85,321
Southwest
AZ
0
0
0
CA
51
7,904,808
143,021
HI
0
0
0
NV
0
0
0
Western
Average
51
7,921,301
143,139
Exhibit 9
5
—Average Monthly Employment, Annual Net Sales, and Productivity at Each Firm Certified for the TAAF Program in FY 2009
Project No.
Average monthly
employment
Annual net sales
Productivity
−2141167170
11
$1,196,902
$108,809
−2121444292
67
4,006,469
59,798
−2042247253
122
15,791,636
129,355
−2013118865
115
3,298,000
28,741
−1988436588
42
4,101,937
97,665
−1950117994
19
1,983,347
104,387
−1928548648
29
3,379,076
116,520
−1902999773
84
10,028,851
119,391
−1735872532
86
8,007,271
93,108
−1706525908
24
3,247,216
138,179
−1643182588
335
53,848,974
160,743
−1634468345
5
442,494
88,499
−1546967690
93
14,127,000
151,773
−1506878533
203
38,116,000
187,764
−1414666091
48
8,416,445
175,343
−1399657793
21
3,327,060
158,431
−1370436615
52
6,348,965
122,095
−1204293136
113
1,312,194
11,633
−1178629643
51
3,523,858
68,691
−1144864381
113
21,591,273
191,073
−1119666282
27
2,393,550
89,312
−1097381894
4
366,266
91,567
−1028400370
4
712,071
178,018
−976697335
45
3,575,314
79,451
−976135562
15
1,693,508
109,968
−889718167
53
10,400,385
195,606
−887612628
2
23,036
14,133
−879675653
158
16,095,224
101,656
−854603118
23
665,537
29,579
−764521341
27
4,282,608
161,608
−739225309
78
6,027,470
77,774
−721946507
8
405,912
49,501
−707088102
23
5,357,515
233,748
−701972844
95
12,076,738
127,567
−641759960
24
3,274,000
136,417
−632530935
10
112,451
11,245
−631287923
35
1,924,226
54,978
−627002970
21
2,442,947
119,168
−616871455
15
3,975,576
265,038
−594868995
85
8,341,277
98,133
−592625918
58
6,641,978
114,517
−554756768
93
32,349,000
347,540
−534793263
17
2,346,672
136,434
−510304974
218
23,152,444
106,409
−502336347
75
14,316,003
190,880
−477438887
31
4,527,483
146,048
−476833060
178
15,320,292
86,069
−441231945
174
16,688,000
95,770
−428234294
69
9,989,294
145,405
−404256669
80
7,044,108
87,777
−363836427
37
2,853,566
77,543
−360147020
61
807,976
13,246
−283996920
78
9,189,018
118,308
−48958339
122
43,293,680
354,866
23230469
284
59,905,827
210,625
65254696
20
2,463,879
124,753
114629866
20
2,074,822
104,789
137101191
15
318,347
21,223
176434616
101
12,903,834
128,141
246147845
26
1,935,948
74,460
280418639
9
3,207,749
341,250
526891792
39
3,514,280
90,110
540241037
87
9,939,297
114,905
587994808
98
17,905,792
182,712
631689182
35
2,995,661
85,590
639991136
17
2,949,494
173,500
674278170
13
836,017
65,570
675284787
11
2,494,392
220,743
675586291
223
19,226,471
86,217
712619105
6
405,088
67,515
717100183
7
717,780
106,338
726417873
38
6,404,000
167,425
744959677
344
42,310,370
122,995
775553880
17
1,020,236
60,014
819813906
33
8,930,078
274,772
838593384
58
950,292
16,384
915263089
4
346,908
86,727
945015730
739
111,833
151
962067466
24
3,227,083
135,024
989234254
6
358,000
61,407
1082975273
22
1,650,000
76,142
1211737402
99
10,494,800
106,115
1218148370
50
4,085,428
81,709
1220532373
174
25,421,539
146,101
1221594278
26
2,622,892
102,457
1221842461
28
3,202,408
113,039
1221849510
19
1,514,723
81,524
1222114933
91
408,844
4,493
1222703402
36
2,153,350
59,272
1222797758
20
1,985,109
99,255
1222976955
33
5,407,901
163,876
1224271418
49
7,677,627
156,686
1224872688
103
13,265,206
128,788
1225120776
28
4,903,000
175,107
1225133741
137
13,773,487
100,720
1225201275
326
50,549,619
155,060
1225287691
292
48,371,484
165,656
1225810350
12
749,609
62,467
1227042607
3
195,253
65,084
1227289294
113
12,397,000
109,708
1227543460
888
103,961
117
1227630320
53
6,328,130
119,399
1227877017
8
2,468,000
300,976
1228925679
1
172,826
216,033
1229617894
58
4,103,785
70,270
1229708794
47
6,561,310
139,602
1230052412
19
2,156,922
115,343
1230750559
28
3,825,907
136,640
1231186429
26
2,951,829
113,532
1231426311
19
2,475,523
130,291
1232040671
51
2,773,358
54,486
1232739420
71
26,183,448
367,745
1232999637
4
261,470
65,368
1233087150
167
8,650,171
51,797
1233153258
89
25,373,011
285,090
1233239620
11
660,126
57,906
1233327674
60
8,141,100
135,685
1233338572
46
5,741,356
124,812
1233673084
78
13,219,682
169,483
1233691704
147
7,407,619
50,392
1233760561
88
22,565,731
257,306
1233842492
20
2,408,353
120,418
1234275977
69
10,463,729
151,648
1234966745
16
3,997,722
249,858
1234980125
6
558,835
101,606
1235057791
20
4,409,285
220,464
1235755384
133
49,248,961
370,293
1235770548
97
23,087,874
238,019
1236954447
67
4,297,798
63,984
1237222818
162
34,093,287
210,452
1237298215
61
5,678,660
93,862
1237306159
22
1,874,369
85,199
1237408034
86
8,978,684
104,805
1237488333
79
16,573,810
211,131
1237904074
18
4,579,750
253,305
1237916053
119
9,797,071
82,676
1238084904
14
629,641
45,527
1238173195
115
8,662,992
75,330
1238177474
87
13,279,415
152,637
1238431176
16
1,520,278
93,844
1238505614
29
1,365,689
47,093
1238510711
16
1,147,318
71,707
1238520242
38
3,749,000
98,658
1238765788
21
1,493,937
69,810
1238772555
76
11,606,000
152,110
1239379144
45
3,121,252
69,361
1239897775
10
745,536
74,554
1239916845
17
12,408,106
717,232
1240316759
106
16,656,248
157,134
1240405972
96
12,408,106
129,251
1240492021
153
13,382,187
87,752
1240519189
149
20,677,489
138,682
1242740530
4
196,390
45,672
1242766013
392
24,305,183
61,956
1242847325
69
14,182,980
205,550
1242997549
89
6,572,979
73,688
1243013350
52
16,549,376
318,257
1243436999
644
328,918,000
511,139
1243524425
8
1,389,381
173,673
1243613130
2
232,398
116,199
1243957086
32
3,546,513
112,588
1243968951
23
1,664,125
71,422
1243971069
57
4,043,125
70,808
1244043572
60
4,750,412
79,174
1244055343
99
4,731,197
48,032
1244058559
4
785,907
188,467
1244127442
71
15,427,668
216,529
1244130026
69
9,072,053
131,670
1244133405
79
8,686,480
110,095
1244141043
17
982,499
57,794
1245437191
18
1,736,066
96,448
1246279087
126
18,495,699
146,443
1246304644
474
147,130,573
310,402
1246459021
11
747,668
67,970
1246886248
21
3,131,095
151,261
1246977066
43
5,447,176
126,679
1246981790
38
5,652,842
148,759
1246994607
241
11,004,128
45,660
1247145245
8
442,710
55,339
1247147517
4
1,041,903
260,476
1247150638
10
1,684,610
163,079
1247161869
9
204,767
21,947
1247238696
13
1,965,636
151,203
1247754433
97
18,745,787
194,257
1247831618
50
8,934,942
178,699
1247835180
29
2,441,616
83,332
1247836448
72
10,851,151
150,710
1248180971
5
412,418
82,484
1248977837
137
21,887,413
159,762
1249499924
24
3,648,378
152,016
1249569202
12
936,104
78,009
1249916490
22
3,079,082
138,697
1250184197
138
30,238,000
219,116
1250265178
933
99,626,339
106,781
1327553155
10
1,402,910
140,291
1447786180
11
190,335
17,303
1531863717
114
14,611,240
128,169
1583584994
8
364,976
45,622
1715521604
9
966,076
108,304
1741163169
66
9,039,000
137,832
1745023300
52
8,970,960
172,518
1874078704
7
454,718
67,767
1884248409
8
391,392
48,924
1892823557
107
13,779,974
128,785
1962799420
9
235,598
27,080
1968260507
32
4,751,162
150,021
1978491171
36
9,163,974
254,555
2019516425
10
1,669,942
169,882
2035965487
10
341,614
34,161
2053807288
66
3,595,710
54,480
2060034620
2
151,618
69,967
2092576996
35
4,072,919
118,056
5
As reported by the petitioning firm for the most recent year of the firm's petition period (can be between 6 and 12 months).
(8) The number of firms that received assistance developing Adjustment Proposals.
Although EDA has not previously recorded whether a certified firm received assistance in preparing their Adjustment Proposals, EDA understood that all firms who submitted Adjustment Proposals through TAACs received assistance from the respective TAAC. EDA requested that TAACs include such information in the Adjustment Proposals. Exhibit 10 shows the number of plans submitted by each TAAC.
EN15JA10.022
(9) The number of Adjustment Proposals approved and denied by the Secretary of Commerce.
In FY 2009, EDA did not deny any Adjustment Proposals and approved 172 plans.
Exhibit 11—Characteristics of the Adjustment Proposals Approved in FYs 2003-2009
FY 2003
FY 2004
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
Number of Business Recovery Plans Approved
162
177
132
137
126
139
172
Avg. Firm Sales (millions)
$7.2
$11.6
$8.4
$10.6
$11.2
$15.0
$16.4
Avg. Firm Employees
68
88
64
91
68
81
80
EN15JA10.023
(10) The financial assistance received by each firm participating in the program.
(11) The financial contribution made by each firm participating in the program. Although the TAACs maintain records on actual government and firm expenditures for implementation of Adjustment Proposals, EDA currently does not collect or record this information in a central database. In FY 2010, EDA will include this measure in the revised quarterly reports submitted by the TAACs to EDA. Exhibit 13 shows the average government and firm cost share proposed by each firm at the time their Adjustment Proposals were approved.
Exhibit 13—Projected Costs To Implement Approved Adjustment Proposals
FY 2003
FY 2004
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
Total Government Share (millions)
$8.1
$8.5
$5.9
$6.7
$7.1
$7.9
$10.3
Total Firm Share (millions)
7.4
8.1
5.4
6.0
5.9
7.5
9.8
Total Projected Costs (millions)
15.5
16.6
11.3
12.7
13.0
15.4
20.2
Avg. Government Assistance Per Firm
6
50,000
48,023
44,697
48,905
56,449
56,827
60,123
6
Government share of project implementation costs as proposed in the Adjustment Proposals divided by the number of approved plans.
(12) The types of technical assistance included in the Adjustment Proposals of firms participating in the program.
Firms proposed various types of projects in Adjustment Proposals. More than half of all firms proposed to implement marketing/sales or production/engineering projects. Marketing and sales projects are geared toward increasing revenue, whereas production and engineering projects tend to be geared toward cutting costs. Support system projects can provide a competitive advantage by either cutting costs or creating new sales channels. Management and financial projects are designed to improve management's decision making ability and business control. Sample projects are listed below in Exhibit 15.
Exhibit 14—The Frequency of Specific Projects Proposed in Adjustment Proposals
[Presented by TAAC]
TAAC
Number of firms that included the following projects in their business recovery plans
Marketing/
sales
Support
systems
Management/
financial
Production/
engineering
Great Lakes
15
15
11
15
MidAmerica
7
6
4
5
Mid-Atlantic
15
5
5
9
Midwest
26
16
0
23
New England
33
20
27
31
Northwest
7
1
1
5
New York State
10
6
2
9
Rocky Mountain
16
6
4
14
Southeastern
13
7
6
7
Southwest
13
10
1
11
Western
5
3
0
4
Total
160
95
61
133
Exhibit 15—Sample Adjustment Proposals Projects Proposed in FY 2009
Marketing/sales
Support systems
Management/financial
Production/engineering
• sales planning/development
• strategic market planning/marketing strategy
• sales and marketing staff training/coaching/mentoring
• market, technology, merchandising, consumer research and analysis/export feasibility study
• business development/market expansion/customer diversification
• brand recognition/rebranding
• MRP/ERP selection and installation
• IT systems upgrades
• Software training
• strategic information technology plan
• MIS/IT evaluation and recommendation
• Design software
• MIS reporting systems and server
• CRM and PM software
• succession planning, strategic business plan, financial planning, investment planning, supply chain management strategy, pricing strategy
• JV and management project
• cost accounting/pricing system/cost studies/quoting/cost estimating
• cost tracking/control improvement
• financial restructuring
• Quality assurance/efficiency sys- tems
• production evaluation, integration, analysis, and efficiency
• 5S, lean manufacturing, Siemens, MRP, phase-gate system
• Industry certifications
• Employee training
• supply chain management program/improvements
• bar coding
• PLCM improvement
• new product design and development, production line evaluation
• web site update/unitronix/Design Online Web site improvements
• kiosk ordering system/e-commerce
• trade show design/model kit package/travel exhibit design
• visual imaging for marketing/advertising tools
• Industry certification promotion campaign
• sales pricing and sales channel
• lead generation
• after-market service plan
• install new computer network
• automate kin controllers
• product identification software
• CAD software upgrade
• Vantage shop floor management system
• Tele-conferencing capabilities
• implement QuickBooks MIS modules and financial reports
• customer communication software upgrade
• CRM system
• production and inventory control modules/software
• MIS system integration quality controls
• human resources training, employee training
• management-leadership development, managerial capacity building, management training and coaching
• interim leadership
• company fair market valuation
• government procurement assistance
• Green manufacturing and certification
• site evaluation
• Job Boss Shop scheduling system implementation
• Value stream map for the manufacturing process
• patent requirements
• materials test program
• enhance testing and analytical capabilities
• program
• facility expansion and design
• prototype research, design, and testing
• develop capabilities for new production line/business
• production tooling design
• vendor stocking program
• FSC chain of custody plan
• calibrate equipment, equipment installation and start-up, facility/equipment design
• warehouse automation
(13) The number of firms leaving the program before completing the project or projects in their Adjustment Proposals and the reason the project was not completed.
EDA currently does not collect or record this information. In FY 2010, EDA will include this measure in the revised quarterly TAAC report.
(14) Sales, employment, and productivity at each firm upon completion of the program and each year for the two-year period following completion.
Most, if not all, TAACs record the sales, employment and productivity of firms after completing the TAAF Program. However, EDA currently does not collect or record this information for the 2-year period following completion. In FY 2010, EDA will include this measure in the revised quarterly TAAC report.
Discussion and Analysis
FY 2009 Performance
In FY 2009 as compared to FY 2008, the number of petitions submitted to EDA increased by 49 percent. Due to current economic conditions and the expansion of eligibility to service sector firms, increases in the number of petitions are expected to continue in FY 2010. As the TAACs continue to strengthen their marketing channels to more effectively reach service firms, it is expected that the number of petitions will increase. If petitions continue to increase at the same rate, EDA can expect approximately 400 petitions in FY 2010.
EN15JA10.024
EN15JA10.025
The average total processing time of petitions increased by approximately 17 days, a 30 percent overall increase. A spike in the number of petitions submitted and a recent decline in the number of eligibility reviewers have made it challenging for EDA to meet the 40-day review deadline to provide a final determination on petitions. As of May 17, 2009, EDA is required to make a final determination within 40 calendar days of a petition being accepted for filing under Section 251 of the Trade Act. Before May 17, 2009 EDA had to make a determination within 60 calendar days. The average processing time has improved as of the fourth quarter of FY 2009. The addition of two new EDA Program Analysts (expected start dates between December 2009 and February 2010) and a new TAAF Program Director (start date August 30, 2009) is expected to improve EDA's processing time for petitions for the remainder of FY 2010. For the average petition, Exhibit 18 shows that, EDA missed the 40 day deadline in the third quarter of FY 2009, but was able to meet the deadline in the fourth quarter of FY 2009.
EN15JA10.026
EDA must approve all petitions for certification and Adjustment Proposals for firms to receive financial assistance. Although EDA has not previously recorded whether a petitioning or certified firm received assistance in preparing their petition or Adjustment Proposals, EDA understood that all firms who submitted petitions and Adjustment Proposals through TAACs received assistance from the respective TAAC. EDA has revised Form ED-840P to more accurately record whether and from whom firms receive assistance. Also, EDA requested that TAACs include such information in the Adjustment Proposals.
EDA has assumed that eligible firms either do not have the capacity to submit petitions and Adjustment Proposals without assistance, or that doing so would cause unnecessary burden to small and medium-sized firms. EDA therefore understands that all firms receive assistance.
As compared to FY 2008, average net sales of certified firms declined by 20 percent and average employment declined by six percent. The National Bureau of Economic Research (NBER) determined that a recession began in December 2007. It is likely that the recession has contributed to the decline in sales and employment of certified firms in FY 2009. Firm productivity, defined as net sales per employee, in certified firms has declined as well.
The TAAF program strongly targets small and medium-sized businesses in the provision of assistance. In order to classify small and medium-sized firms EDA used the Small Business Administration's (SBA's) size standards. Medium-sized firms are classified as those with less than 500 employees for most manufacturing and mining industries, or less than $7 million in average annual receipts for most nonmanufacturing industries. Ninety eight percent of the firms certified in FY 2009 had fewer than 500 employees, and 58 percent had less than $7 million in annual net sales. This indicates that the TAAF program is mostly reaching small and medium-sized businesses.
EN15JA10.027
EN15JA10.028
EDA experienced a 15 percent increase in the number of Adjustment Proposals it received for approval in FY 2009. In comparison, there was a 49 percent increase in the number of petitions in the same year. It is expected that the number of Adjustment Proposals submitted will be fewer than the number of petitions, since Adjustment Proposals often take more time to create and require firms to contribute funds for their development and implementation. Firms with limited working capital and limited access to credit will tend to develop and implement the Adjustment Proposals more gradually.
EN15JA10.029
The number of approved Adjustment Proposals and the proposed financial assistance to be received from EDA and contributed by each firm increased in FY 2009. EDA approved an additional 28 Adjustment Proposals as compared to FY 2008 and proposed to spend an additional total of $2.4 million in government funds. The TAAF Program received an increase of approximately $1.7 million in Omnibus appropriations for FY 2009.
Approximately 65 percent of firms included marketing/sales projects or production/engineering projects in their Adjustment Proposals. Approximately 35 percent of firms included support system projects or management/financial projects in their Adjustment Proposals. This mix of project types proposed in the Adjustment Proposals indicates that firms are focusing on both revenue growth and cost reduction in order to improve their profit margin.
EN15JA10.030
Looking Forward: Data Collection
The TGAAA identifies 14 measures to be included in each year's TAAF Annual Report. Of the 14 measures, EDA currently does not collect data on four. These measures are: (1) The number of firms that inquired about the program, (2) the number of petitions certified by congressional district, (3) the number of firms leaving the program and why, and (4) sales, employment, and productivity at each firm upon completion of the program and every year for the two years thereafter. There are another four measures that EDA does not collect data on directly, but has access to relevant information: These measures are: (1) The number of firms that received assistance in preparing their petition, (2) the number of firms that received assistance in preparing their Adjustment Proposal, (3) the actual government outlays for each firm implementing their Adjustment Proposal, and (4) the actual firm outlays for implementing the Adjustment Proposal. Most of these measures are recorded by the TAACs, but EDA has not required TAACs to report on them to EDA.
Exhibit 23—FY 2010 Data Collection Plan for the 14 Measurements Required for the Annual Report to Congress
Measurement
Collected by EDA?
Recordkeeping system
Procedure/policy changes required
1. Number of Firm Inquiries
No
New Management Information system (MIS)
TAACs should have a written record of their response to firm inquiries and submit a copy of this notice along with the firm's DUNS number to EDA in the TAAC's quarterly report. A new information system will need to be designed to record the information collected from the TAAC quarterly reports.
2. Number of Petitions
Yes
MIS
None.
3. Number of Petitions Certified and Denied
Yes
MIS
None.
4. Average Petition Processing Time
Yes
Derived from MIS
None.
5. Number of Petitions and Certifications by Congressional District
No
MIS
Form ED-840P will be revised so that a firm's congressional district will be recorded. The MIS has been modified to include this information.
6. Number of Firms that Received Assistance in Preparing their Petitions
To some extent
MIS
Currently, EDA receives all petitions directly from the TAACs. Form ED-840P will be revised so that firms can indicate whether they received assistance. The MIS will be modified to include this information.
7. Number of Firms that Received Assistance in Developing Their Adjustment Proposal
To some extent
MIS
Currently, EDA receives all Adjustment Proposals directly from the TAACs. TAACs have been advised to indicate the type of assistance received by the firms in the adjustment proposals submitted to EDA. The MIS will be modified to include this information.
8. Number of Adjustment Proposals Approved and Denied
Yes
MIS
None
9. Sales, Employment, and Productivity at Time of Certification
Yes
MIS
For the large number of firms in varying industries being measured, few employ or track the same productivity measures. EDA chose to use the simplest and most universal metric for productivity: sales per employee.
10. Sales, Employment, and productivity at Each Firm Upon Completion of the Program and Each Year for the Two-Year Period Thereafter
No
New MIS
EDA will request this information from TAACs in their quarterly reports. Also, EDA may continue to track firms through the Dun and Bradstreet database to collect sales and employment figures.
11. Financial Assistance Received by Each Firm Participating in the Program
To some extent
New MIS
EDA records the proposed government expenditures on each project, but does not request information on actual outlays for each firm. EDA will request this information from TAACs in their quarterly reports.
12. Financial Contribution Made by Each Firm Participating in the Program
To some extent
New MIS
EDA records firms' proposed expenditures on each project, but does not request information on actual outlays for each firm. EDA will request this information from TAACs in their quarterly reports.
13. Types of Technical Assistance Included in the Adjustment Proposals of Firms
Yes
MIS
This information is now recorded by EDA. Previously this information was submitted to EDA, but not recorded in any MIS.
14. Number of Firms Leaving the Program Before Completing the Project(s) in their AP and the Reason
No
New MIS
TAACs will be advised to include this measure in their quarterly activity reports.
Classification of Data by TAAC, State, and National Totals
Yes
MIS
None.
EDA is considering several steps to address the collection of the remaining measures.
Following is a list of the steps EDA will take to address the current data collection gaps.
(1) TAACs were instructed to upgrade their Adobe software to facilitate data collection. TAACs that only have Adobe Reader can use the Adobe fillable forms, but they cannot save the information on their computers. Upgrading the Adobe software will allow the remaining TAACs to save electronic records of the forms, and will allow EDA to automatically upload information into its management information system and no longer require EDA to re-type all of the information into the system.
(2) EDA will issue several new procedures and guidelines to simplify data collection through a revised template for the quarterly TAAC activity reports.
(3) As resources become available, the management information system (MIS) will be expanded to facilitate reporting.
(4) EDA is in the process of seeking OMB clearance for a revised Form ED-840P to collect all required data.
Conclusion
Overall, there has been an increase in the demand for the TAAF Program in FY 2009, as demonstrated by the increase in the number of petitions for certification and Adjustment Proposals submitted to EDA.
Due to the spike in petitions and Adjustment Proposals, EDA experienced challenges in meeting the new 40-day processing deadline for petitions accepted for filing immediately after the new rule's implementation. However, since the fourth quarter of FY 2009, the average processing time for petitions declined below the 40-day requirement. New TAAF program staff members are expected to help improve processing time even further for FY 2010.
TAACs effectively targeted small and medium-sized firms in FY 2009. The average employment, net sales, and productivity of firms certified in FY 2009 declined in comparison to the previous fiscal year. More than half of all firms proposed to implement a marketing/sales project or production/engineering project in their Adjustment Proposals.
Of the 14 measures required for reporting, EDA was unable to provide any information on four measures, and provided limited information on another four measures. EDA is taking steps to collect and report on all of the missing measures for the FY 2010 Annual Report.
Dated: January 7, 2010.
Bryan Borlik,
Director, Trade Adjustment Assistance for Firms Program.
[FR Doc. 2010-561 Filed 1-14-10; 8:45 am]
BILLING CODE 3510-24-P
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