EDC’s job numbers a mystery

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Colorado Springs Regional Economic Development Corp. documents tout that the organization has brought more than 19,000 jobs to Colorado Springs during the past decade.

But that number isn’t accurate.

The EDC keeps two sets of numbers, one that is the number of jobs companies say they expect to create when they move to the city, and another that tallies the actual number of jobs created.

The first set of numbers is reported to the organizations that fund the EDC: taxpayers and private companies listed as “major investors.”

The Colorado Springs Business Journal is a major investor with the EDC.

The second set is seen only by those inside the EDC, and the differences between the two numbers is significant in some cases.

Minnesota-based Lion Precision, which makes measurement sensors, made a Colorado Springs acquisition in 2002, and the EDC counts it as a local company that had planned to create 10 jobs.

COO Shanda Osiecki said Lion inherited one Springs employee through the acquisition, but that Lion Precision never had offices here.

“We don’t do business there,” she said. “I am not sure where they got those numbers.”

EDC Executive Vice President of Marketing David White disputes that claim, saying they had four employees at their peak.

Another company HemoGenix, a high-tech biological research firm, moved to the Springs in 2003 and announced it would create 60 jobs. The EDC still lists HemoGenix as having 60 jobs, but CEO Ivan Rich says the company only has six.

RockShox, which makes high-end cycling components, is headquartered in Chicago but has a local research division that employs 82 people.

The EDC lists the company as having 350, a number RockShox officials say they never reached in the Springs.

CareCore National, a benefits management company, moved some of its administrative operations here in 2004 and announced 330 jobs.

They have 162 employees at their local offices and 162 work remotely. They plan to hire 11 people during the next three weeks.

But the projections aren’t always overly optimistic. Sometimes companies add more than the announced number of jobs. But even additional jobs aren’t released by the EDC — throwing the actual number of jobs even more into doubt.

WideOpenWest, a Denver-based cable operator, opened a call center in the Springs and announced 50 jobs back in 2000. In 2007, the company expanded and announced that it expected to create 180 jobs. Today, they have 350 people working in the Springs.

White cites DPix, a company that moved here in 2006, as another success. DPix has more jobs now than the 125 announced in 2006 — although White wouldn’t say how many — and moved its company headquarters to the Springs.

The fact that there are two sets of numbers came as a surprise to Colorado Springs City Council President Scott Hente.

“This hits me out of the blue,” he said. “I count on those numbers to be right.”

Taxpayers, through City Council and Colorado Springs Utilities, provided $310,000 of the EDC’s $1.4 million budget in 2010. The county kicks in about $75,000, and the major investors supply the rest.

Without the hard job-creation data, neither taxpayers nor investors can gauge the EDC’s effectiveness.

“We could release an aggregate number, but there are a lot of stories behind that — why jobs aren’t here,” White said. “It would take a lot of work to explain the number.”

That extra work might be necessary, said C.J. Moore, spokeswoman for Kaiser Permanente, one of the major investors in the EDC.

“I think they’ve missed a step here,” she said. “If we don’t have the number, how can anyone know what the actual employment situation looks like in the Springs?”

White said counting jobs is a complicated task.

“This is not an attempt by EDC to hide information,” White said in an e-mail. “It is the nature of our business.”

Companies drive the process, he said.

“Sometimes, obviously, we think their number is too high,” he said. “But who are we to tell the companies what they are or are not going to be able to do in Colorado Springs?”

And while they check annually on a company’s employment figures, it’s done with an understanding that the numbers will be kept confidential.

“We respect their privacy,” White said. ‘We gather yearly job counts from them, but the way we get those numbers is by assuring them that we will keep their information private. When a project is completed, the company issues a press release and/or holds a press conference. Sometimes they do neither. Most companies are OK with stating job projections. Some are not and wish to remain anonymous. EDC numbers reflect what the company wishes to disclose to the public.”

EDC investor Cari Schaffer, CEO of Add Staff, says she has “total faith” in the EDC.

“If I didn’t, I wouldn’t invest,” she said. “And I guess they are only trying to protect the companies themselves — the ones they’ve gotten to know intimately through the process, so the public isn’t asking them, ‘Why didn’t you create as many jobs as you said you would.’ It does make sense.”

It doesn’t make sense to Hente.

“I plan to discuss this with Dave (White),” he said. “It’s a surprise to me that we don’t have job creation numbers. I’d agree we need the whole picture.”

City councilwoman Anglea Dougan plans to bring it up in her role on the Colorado Springs Utilities board of directors. Council members do double-duty as the board for the municipal utilities.

“I am concerned,” she said. “In this day and age, with jobs so critical, we need real numbers. The city is giving money to groups based on information that we think is accurate. To find out it isn’t — it’s amazing to me.”

Moore also had an issue with the secrecy.

“This is a question of transparency,” she said. “It bothers me. If they have a double set of numbers, they should release both sets.”

White said releasing the figures would require approval from the EDC’s board of directors. But that doesn’t seem likely.

Board member Debbie Chandler, who is CEO of Colorado Springs Health Partners, said she has no problem with the EDC’s accounting.

“There are other ways to count success — wages, for instance. The wages for the jobs they bring in are high-wage jobs,” she said. “I think they are doing a great job there.”

Board member Bill Berenz, president of American National Bank, which also is a major investor, said he stands behind the EDC’s numbers and practices.

“I think we’d only need to release that number if it became a major issue or concern,” he said. “Then, we might have to. But I don’t think there’s anything fraudulent going on.”

White thinks the organization’s success speaks for itself, and any further delving is merely a “distraction.”

White points out the city audited the EDC at the request of the city council. While it found an 11 percent discrepancy, White stands behind the numbers.

“We’ve vetted these numbers,” he said. “We’ve been through this with the city audit. Why are we having to do this again?”

The city audit covered a single year, 2009-2010 and checked with selected companies to make sure their jobs announcements matched the EDC’s numbers. The audit didn’t cover actual jobs created, and found an 11 percent discrepancy, based on an outside consultant counting one job announcement twice.

The question of value

According to the EDC’s rules, it can only count jobs from primary employers, those that derive most of their revenue from outside the Pikes Peak region. In addition, it can also count jobs once in a five-year period, and it must “deliver value” to prospective companies.

But value is not easily defined.

“It can mean a lot of things,” White said. “Sometimes we have to hold their hand the entire time. Sometimes, we have the whole dog-and-pony show. Sometimes we just have to put them in touch with the right people at the city for rapid response treatment for permits.”

Hemogenix’s Rich said the EDC was instrumental in moving his company to Colorado Springs, while Northrop Grumman officials say it helped very little with their expansion.

Northrop Grumman, a defense company that does some work in the Springs expanded in 2005. The EDC lists the expansion, and 450 jobs it announced, as one of its successes. Today, Northrop has a hefty presence in the Springs — more than 1,000 employees in offices near Schreiver and Peterson Air Force bases.

But Northrop Grumman spokesman Randy Belote said the expansion required little EDC assistance.

“We had help from the Air Force bases, but that’s it. We had a presence here for decades, it didn’t require much help,” he said. “And I don’t think it created 450 jobs all at once.”

But White also has an explanation for that.

“Sometimes the people who help make the deal aren’t still with the company,” he said. “They move on, and when you call years later they don’t know we helped.”

Questioning the EDC’s success doesn’t benefit taxpayers or investors, he said.

“Is it worth paying the EDC to do this?” he asked. “Anyone with half a brain can tell that it is. Progressive Insurance and T. Rowe Price are here because of the work we do. It’s important work. And being constantly under scrutiny, constantly under the microscope, isn’t beneficial.”

White said the way the EDC tracks jobs is one of the “most conservative in the country.”

It’s at least the way other similar organizations count jobs.

In Oklahoma City, the Chamber of Commerce is responsible for economic development and tracks jobs much the same way, said Vice President of Economic Development Robin Roberts Krieger,

“Organizations (like ours) don’t create jobs, companies do,” she said. “We’re very careful about that. We track announcements, and we go back and keep the actual jobs data in a confidential database. We keep conversations private, because if we announce a company hasn’t done something, they’ll stop talking to us.”

Dougan said that explanation isn’t acceptable.

“I understand that this might be the industry standard,” she said. “But in this day and age, we need real information. Jobs are critical right now. We give the EDC money based on jobs — and the information they give us. It’s amazing to me that this is the way they do things.”

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Company Year Announced Still Here? Jobs Announced

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Cardio Continuum 2000 No 25

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Comsilica 2000 No / 2001 25

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Hansen Corporation USA, Ltd. 2000 No / 2001 50

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Intel Corporation 2000 No / 2008 2,200

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On-Line Systems Support / AESBUS KNOWLEDGE SOLUTIONS 2000 Yes 10

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RegNet – The Registration Network 2000 No 23

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RockShox / SRAM CORPORATION 2000 Yes 403

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VoiceStream Wireless / T-MOBILE USA, INC. 2000 Yes 550

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Tribal Voice 2000 No / 2000 100

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WideOpenWest 2000 Yes 50

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Wireless, Inc. 2000 No / 2000 20

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Zurich Financial Services / ZURICH INSURANCE SERVICES 2000 Yes 194

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Actiontec Electronics, Inc. 2001 Yes 500

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ATMI Fab Services 2001 No / 2002 25

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Catalina Research, Inc. 2001 No / 2007 100

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Classen Computer Consulting, Inc. 2001 No / 2007 18

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ITT Advanced Engineering & Services 2001 No / 2004 50

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Linear Technology 2001 Yes 73

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The Liaison Council on Certification for the Surgical Technologist (LLC-ST) 2001 No / 2005 10

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Gray Hawk Systems Inc. / SECURITY & MISSION ALLIANCE 2002 No / 2006 20

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Lion Precision 2002 Yes 10

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Myers Internet, Inc. 2002 No / 2007 130

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Pavestone Company 2002 Yes 100

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Blue Mountain Avionics 2003 No / 2004 20

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Electro Energy, Inc. 2003 No / 2010 53

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HemoGenix LLC 2003 Yes 60

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ICT Group 2003 No / 2007 1,050

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St. Paul Fire & Marine Insurance Company / THE TRAVELERS COMPANIES 2003 Yes 50

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Barrios Technology, Inc. 2004 No / 2009 10

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CareCore National 2004 Yes 330

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Computer Generated Solutions / VOLT – VMC CONSULTING 2004 Yes 360

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ConfigureSoft, Inc. / EMC 2004 Yes 300

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CSAA / AAA OF NORTHERN CA 2004 Yes 500

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EFT Source, Inc. 2004 Yes 50

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Empirical Testing Corporation 2004 Yes 8

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FedEx Ground / FEDEX FREIGHT 2004 Yes 48

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Focus Publications 2004 No / 2009 15

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Provident Pharmaceutical 2004 No / 2010 70

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Sharene Sportswear, Inc. 2004 Yes 15

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Westwood College Online 2004 No / 2011 125

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Barclays / FIRSTSOURCE SOLUTIONS 2005 Yes 450

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Chef’s Catalog 2005 Yes 270

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Northrop Grumman Corporation 2005 Yes 450

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Quantum Corporation 2005 Yes 37

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RT Logic, Inc. 2005 Yes 168

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SAIC (Science Applications Int’l Corp) 2005 Yes 400

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SI International / SI Int’l Telecom / SERCO 2005 Yes 100

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SkyWest Airlines 2005 Yes 200

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Xanthus Higher Education Loan Program 2005 No / 2007 100

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Accounts Receivable Management, Inc.. 2006 No / 2010 100

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Aerospace Corporation, The 2006 Yes 12

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Bal Seal Engineering 2006 Yes 115

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Community Bible Study 2006 Yes 35

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dpiX, LLC 2006 Yes 125

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Glassical Designs Inc. 2006 Yes 10

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Oceania Cruise Lines 2006 No / 2009 25

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Pantel Systems, Inc. / PSI CORPORATION 2006 Yes 20

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PRC / RYLA 2006 Yes 550

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T.Rowe Price Associates, Inc. 2006 Yes 650

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Vincera, Inc. 2006 No / 2007 40

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Seagate Technology / XIOTECH 2006 Yes 60

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America’s Friends of the Blind / WORLEY ENTERPRISES 2007 Yes 50

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Buywell International 2007 Yes 30

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Coast IRB 2007 No / 2009 180

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FedEx Data Center 2007 Yes 105

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Frontier Airlines 2007 CANCELLED 225

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Luce Research 2007 Yes 100

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Marvell Semiconductor 2007 No / 2009 100

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MediaNews Group Interactive 2007 Yes 200

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MyHealthFunds, Inc. 2007 Yes 200

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PRC / RYLA 2007 Yes 450

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Quantum Corporation 2007 Yes 90

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Spectranetics / THE SPECTRANETICS CORPORATION 2007 Yes 300

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Stealth Technologies / STEALTHCOM SOLUTIONS, INC. 2007 Yes 50

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Tech for Less 2007 Yes 100

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Telematrix / CETIS, INC. 2007 Yes 10

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Term 101 2007 Yes 40

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USA National Karate-do Federation 2007 Yes 2

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USAA 2007 Yes 200

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WOW! Internet, Cable, Phone / WIDE OPEN WEST 2007 Yes 180

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ATB Services 2008 Yes 30

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Braxton Technologies 2008 Yes 100

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CodeOne 2008 Yes 300

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Cyber Command 2008 CANCELLED 100

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Diversified Machine Systems, Inc. 2008 Yes 90

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MEI Technologies 2008 Yes 100

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Neumann Systems Group 2008 Yes 75

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Nexgen Pharma, Inc. 2008 Yes 100

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SESC 2008 Yes 100

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Springs Fabrication, Inc. 2008 Yes 108

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Sticky Sheets 2008 Yes 30

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TechConFed 2008 No / 2010 30

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Verizon Wireless Data Center 2008 Yes 10

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Wells Fargo 2008 Yes 100

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Women’s Professional Rodeo Association 2008 Yes 7

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Affiliated Computer Services Inc. (ACS) 2009 Yes 600

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Alliance Financial Partners 2009 Yes 37

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Association of Gospel Rescue Missions 2009 Yes 6

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Billet Racing Products 2009 Yes 10

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CodeBaby 2009 Yes 500

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Convergent Performance, LLC 2009 Yes 30

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FedEx Services Corporation – Data Center 2009 Yes 68

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FirstSource Solutions, Ltd. 2009 Yes 150

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Hewlett Packard – Data Center 2009 Yes 10

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Jabil, Inc. 2009 Yes 15

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NEK 2009 Yes 80

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Ranch Hand Truck Accessories 2009 Yes 10

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WP Aerospace, Inc. 2009 Yes 30

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Affiliated Computer Services Inc. (ACS) 2010 Yes 450

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ARES Corporation 2010 Yes 10

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Auxsol, Inc. 2010 Yes 10

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Everest University Online 2010 Yes 600

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Granada Corporation 2010 Yes 110

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NCT Technologies Group, Inc. 2010 Yes 18

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USAA 2010 Yes 200

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Space Foundation 2011 Yes 23

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Outreach, Inc. 2011 PENDING 162

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Xiotech Corporation 2011 Yes 30

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Cosmic Advanced Engineering Solutions 2011 Yes 20

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Howell Precision Machine & Engineering, Inc. 2011 Yes 7

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Olson Motor & Control Co., Inc. 2011 Yes 12

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Chapman Foundations 2011 Yes 10

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Entegris 2011 Yes 100

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Walmart 2011 PENDING 30

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Receivable Management Services – iQor 2011 Yes 100

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Agilent Technologies 2011 Yes 131

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TOTAL JOBS ANNOUNCED 2000 – 2011YTD 19,128

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Company name / COMPANY NAME is equal to lower case name is company announced and UPPER case name is how the company is currently known

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Company cancelled project after announcement was made

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*Please note that after companies announce an initial investment into Colorado Springs, they will return to EDC for assistance with expansions.