Facts About MDCP Funding

(updated 2008.09.24)

Thirteen Consecutive Years of Funding

The International Trade Administration (ITA) of the U.S. Department of Commerce has made Market Development Cooperator Program (MDCP) awards each year since the program began in 1993, when Congress included $2.5 m in its Commerce Department appropriation for MDCP funding. MDCP is managed by ITA's Manufacturing and Services (MAS) prgram area. After 1993, MDCP funding was no longer a separate line item in the Commerce Department’s appropriation. Instead, it was considered to be part of ITA’s “base” allocation from the appropriation the Commerce Department received from Congress. Actual amounts that ITA/MAS applied to MDCP awards from 1993 to 2005 range from $1.6 m to $2.5 m with an average of over $2.3 m.

Increase in Earmarks in 2006 Put Squeeze on Non-Earmarked Funding

In its fiscal 2006 appropriation, Congress, using language originating in the Senate, instructed the Commerce Department to increase the level of funding to several organizations, most of them with relation to the textile industry. These “earmarks”, most of which were for programs that had received funding in previous years, totaled about $5 m more than they had in previous years. Congress did not increase ITA’s budget to accommodate the increase in earmarks. In order to fund the $5 m in additional earmark grants, ITA/MAS had to cut funding for several programs normally included in its base budget allocation. As a result, ITA decided it was not able to fund an MDCP competition for 2006.

Cause of Cancellation of 2006 Competition Was Budgetary

It is important to note that Congress did not instruct ITA to withhold funding for a 2006 MDCP competition. MDCP is one of the most successful programs for helping U.S. industry to become more competitive internationally. Since 1997, when ITA began gathering uniform export statistics for the program, MDCP has generated $2.4 b in exports. It is one of the most cost-effective federal programs returning $100 in exports for every $1 invested in award funds and administrative costs. The decision not to fund the 2006 competition was made due to extreme budgetary constraints. Congress did not instruct ITA to cancel the 2006 competition. In fact, there is no indication that Congress knew that its 2006 appropriation would place ITA in a position where it would be obliged to curtail its 2006 MDCP competition.

Competiton Resumed in 2007

House Joint Resolution 20 (HJR 20) passed on February 14, 2007, resulted in funding for the Commerce Department through September 2007 at about the same level as for fiscal 2006. This continuing resolution contained none of the earmarks that had the effect of consuming ITA budget that could have otherwise funded a 2006 MDCP competition. On the other hand, HJR 20 did not cover $10 million in uncontrollable increases such as pay raises, increased space costs, and other inflationary type increases. As a result, ITA/MAS had to reduce the amount of MDCP funding available for a 2007 competition. Four awards were made to totaling $576,000.

2008 Competition Results in Four New Awards

In late September 2008, ITA selected four (4) new organizations to receive MDCP awards totaling $431,000. The new awards are to be announced individually beginning in October.

Traditional Funding Level Anticipated for the 2009 Competition

Given the current budget situation, it is not possible to know for sure the amount of funding that will be available for MDCP awards in 2009. ITA will begin the fiscal year in October operating under a continuing resolution rather than an appropriation passed by Congress. However, under the appropriation legislation under consideration, the chances of ITA being able to fund a 2009 MDCP competition at the normal average funding level of $2.3 million are much better than they have been for 2007 or 2008.