GAO Study Confirms Big Impact

The United States Government Accounting Office (GAO) recently completed a study on the impact that the Trade Adjustment Assistance for Firms (TAAF) program has had on participating companies.

Key Findings Include:

  • Increased sales of 5-6%
  • Increased productivity of 4%
  • Increased sales of 6-10% for firms in growing markets
  • 96% of clients satisfied with program consultants
  • 92% of clients satisfied with TAAF Center services

“GAO’s analysis of data collected from the TAAF centers showed that the program was associated with increased sales and productivity for manufacturing firms.”

key-findings

Background

TAAF is a federally funded, U.S. Department of Commerce, program that assists manufacturing companies impacted by foreign competition. Companies able to meet the program’s qualification criteria are eligible for a federal grant of up to $75,000 in matching funds that can be used to fund strategic initiatives targeted at improving overall competitiveness.

The GAO recently completed a comprehensive assessment of TAAF as mandated by Congress under the 2009 American Recovery and Reinvestment Trade and Globalization Adjustment Assistance Act (TGAAA.)

Economic Analysis

GAO economists performed an analysis of the sales performance of 570 firms that participated in the program, 1998-2011, finding:

  • Increased sales of 5-6% for firms that participate in TAAF; a statistically significant relationship between program participation and increase in firm sales.
  • Productivity increase of about 4%, with productivity being defined as sales per employee
  • Increased sales of 6-10% for TAAF clients in growing markets, suggesting that TAAF client firms were better able to take advantage of growth in their markets or to translate overall market growth into firm sales

Survey Results

survey-results

163 TAAF clients with recovery plans developed in 2009 were surveyed; 117 (72%) responded with the following:

  • 96% of survey respondents expressed satisfaction with project consultants
  • 92% of respondents expressed satisfaction with serviced received from TAAF Centers
  • 89% of respondents satisfied that TAAF helped them identify projects to improve their businesses

GAO Methodology

GAO’s comprehensive assessment of TAAF included:

  • Site visits/teleconferences with each of the 11 TAAF Centers
  • Interviews with TAAF Center staff, client companies, and consultants
  • Collection of data from TAAF Centers relating to number of firms assisted, 2008-2011
  • Survey of 163 firms assisted by TAAF during the 2009-2011 time frame
  • Collection and analysis of performance data from 570 TAAF assisted firms, 1998-2011 time frame
methodology

About TAA for Firms

TAAF is run out of regional offices across the country, with the Rocky Mountain region served by the Rocky Mountain Trade Adjustment Assistance Center (RMTAAC), located in Boulder. RMTAAC serves manufacturers in Colorado, Utah, New Mexico, Nebraska, North Dakota, South Dakota, and Wyoming. RMTAAC’s experienced business professionals guide interested firms through the qualification process, develop the customized turnaround plans and then lead the companies through business initiatives designed to help the companies compete more effectively and build a foundation for future growth.

TAAF is a 50/50 cost share program. The federal government assistance matches, dollar for dollar, the strategic investments companies make, up to the current limit of $75,000 per company. One restriction of the program is that the federal funds cannot be used to purchase capital goods or equipment. The federal dollars may be used for a wide range of projects to help companies develop the critical capabilities they need to compete in the global economy.

Typical TAAF funded initiatives include:

  • Production: Lean manufacturing consulting/training, automation systems, IT customization and integration, and production facility layout
  • Marketing: Strategic marketing plans, sales team development, training, integrated internet marketing strategy, websites, search engine optimization, new media development, social media, and new product market assessments
  • Information Systems: ERP/MRP systems: selection, specification, customization, and implementation
  • Management: Training, team building, and succession planning
  • Quality: Improvement program development, such as ISO9001/AS9100 consulting and registration

TAAF Program Qualifications

Companies need to meet three criteria that are evaluated in relation to two 12 months periods within a recent past 24 month time frame:

  1. Decline in average monthly employment
  2. Decline in company sales, either overall sales or a major product category (25% of sales.)
  3. Import competition in company’s market category (evaluated by looking at import category data.)

Additional Information

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In the Rocky Mountain Region, companies interested in learning more about the benefits of and qualification to the TAAF program should contact Chris Stone at Rocky Mountain Trade Adjustment Assistance Center in Boulder.

He can be reached via email at Chris Stone or you can call 303.506.8961.

learn more at the Rocky Mountain Trade Adjustment Assistance Center website

read more about the GAO report

Written by

Administrative role for Transformance Advisors

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