2010-561. 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.

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.

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]

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.

(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.

(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

(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.

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.

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.

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.

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.

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.

Footnotes

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.