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Transcript of Defense Industry Adjustment Defense Industry Adjustment 101 Presented by Michael Gilroy Program...
Defense Industry Adjustment
Defense Industry Adjustment 101
Presented by
Michael GilroyProgram Director (DIA)Office of Economic Adjustment
(in billions)Fairfax County, Virginia $19.1San Diego County, California $15.1Tarrant County, Texas $13.8Los Angeles County, California $8.0Santa Clara County, California $7.4District of Columbia Excluding Exceptions $7.0Madison County, Alabama $7.0Honolulu County, Hawaii $6.7Bexar County, Texas $6.6Newport News City, Virginia $6.2Middlesex County, Massachusetts $6.0St. Louis County, Missouri $5.0Maricopa County, Arizona $4.8King County, Washington $4.7Arlington County, Virginia $4.7Pima County, Arizona $4.6Norfolk City, Virginia $4.2Allegheny County, Pennsylvania $4.2El Paso County, Colorado $4.1Jefferson County, Kentucky $4.0Cumberland County, North Carolina $3.8Sacramento County, California $3.7Orange County, Florida $3.7New London County, Connecticut $3.6Pierce County, Washington $3.6
Top 25 Defense Spending Locations (Personnel and Contracts)
Sources: Defense Manpower Data Center and Chmura Economics & Analytics
The Defense Industry Today
•Nature of defense industry• No longer vertically integrated• Data-driven• Just-in-time supply chain• Globalization
• Businesses• OEMs dominate most discussions but…• …small firms drive the DIA program
DIA Historical Background• Current program based on White House concern
over DoD’s impact on economy after ending 2 wars.• OEA developed proposal for expanded DIA program
throughout late 2011 and 2012. • In November 2013 proposed program of $300
million over 5 years (FY14-FY18 FYDP)• RMD 700A1 (March 2013) instead authorized the
following ($ in millions):
FY 14 FY 15 FY 16 FY 17 FY 18
48.1 46.1 33.1 10.2 5
OEA’s Defense Industry Adjustment Program
• Assistance for regions impacted by Defense budget and contract reductions
• Supports communities to carry out strategies to retain critical workforce skills and business capacities• Work with Federal, state and local agencies to
integrate regional project plans and identify specific actions to support regional cluster growth and job creation
• 22 active projects with 18 more expected to be assisted in FY 15
• PB FY 2016 requests $33.1M for program
Greater Wichita Region
State of Oklahoma
Southwest Ohio Region(Wright-Paterson AFB)
Commonwealth of Pennsylvania
Commonwealth of Massachusetts
State of Arizona
St. Louis Region
Texarkana Region
Middle Georgia Region(Warner-Robins AFB)
State of Georgia
Solano County(Travis AFB)
State of IndianaKern County
State of Rhode Island
State of South Carolina
State of Alabama
State of New Mexico
City of Long Beach
State of Wisconsin
Oshkosh Region
State of Washington
Commonwealth of Virginia
State of Maryland
Southern CaliforniaRegion
Allen County(Joint Systems Manufacturing Center)
State of Colorado
Southeast Michigan Region(Detroit Arsenal)
State of Connecticut
State of New Jersey
State of Tennessee
State of Illinois
Active projects
Developing projects
Defense Manufacturing Assistance Program (DMAP)(UMichigan/OhioState/Purdue)
State of New Hampshire
State of West Virginia
Central Ohio Region
State of Ohio
Project Approach and Structuring
Three Step Process
8
How is DIA Different From BRAC?
• No single starting point or animating event• Contract cancellations• Contracts which do not materialize• Personnel reductions
• No clearly identifiable geography around which to organize a response.
• No clearly identifiable entity to be in charge• No consensus on target for manufacturing
communities• Preserve defense industrial base?• Expand defense-oriented foreign business?• Diversify into non-defense lines of business?
What Are We Seeing Today?• Organizing is most difficult and time-consuming
activity regardless of grantee type.• Our best managed projects tended to recognize this in
their initial application.• Most grantees already have everything they need
to recover – but the assets are not aligned.• The Chicken and Egg argument• Grantees generally see businesses as the economic
growth/recovery driver.• Businesses see workforce as their growth driver.
• Planning is necessary, but not sufficient• Sustainability is critical – yet few grantees address it.
• About 50% of the time MEP is not at the table.
What are DIA Grantees Doing?Organization• Salaries & Expenses (S&E)• Charrette Meetings / Outreach• Stakeholder Engagement• Social Network Analysis• Website / Social Media• Measurement & Evaluation• IMCP Supply Chain• Mapping• Direct Assistance / MEP Assistance• Mfr. Collaboration Studies• Cluster• SWOT• Asset Mapping• CEDS Update• Defense Diversification• Defense Impact / Dependency
Acceleration/Incubation• Facility / Op. Plans• Programming• Curriculum• Salaries & Expenses (S&E)Workforce• Dislocated Worker Training /
Assistance• Skills Gap Analysis• Career Pathway Study / Mapping• Curriculum Development• Supplies & Equipment Other• Tech. Transfer / Commercialization• Pilot / Demonstration Projects• Export Assistance• Tooling & Equipment Disposal• Facility Reuse • Access to Capital Markets
Eligibility
Eligibility• Two fold test: • Legal grantee• Eligible event
• Legal grantees:• States• Municipalities• Tribal Nations• Public instrumentalities
• Eligible Events:• Cancellation or termination of a DoD contract • Planned major reduction in DoD spending • Closure or reduced operations of defense facility• Diversification
Assistance Types in DIA Portfolio
• Community Economic Adjustment Assistance for Reductions in Defense Industry Employment • CFDA 12.611• EADS Project Codes: CR, PR, BC
• Community Economic Adjustment Assistance for Advance Planning and Economic Diversification • CFDA 12.614• EADS Project Type: DD
• Economic Adjustment Assistance for State Governments• CFDA 12.617• EADS Project Type: ST
Take Aways for Potential Applicants• When in doubt….call OEA earlier rather than later.• Learn from other grantees. OEA can help you make connections.
• Devote bulk of your time to networking, communications and outreach before you apply, or….• Extend your organize/planning phase and use OEA resourcing to get
organized• Use a facilitation expert/consultant when needed
• Spend as much time as it takes up front to define the problem, the strategy, the goals and the tasks.
• Use a formal project plan with reporting mechanisms• Who is responsible?• When is it due?• What does it cost?
Contact OEA
Michael P. GilroyProgram Director (Defense Industry Adjustment)Office of Economic Adjustment2231 Crystal Drive - Suite 520Arlington, Virginia 22202Office: (703) 697-2081Cell: (703) 901-7660NIPR: [email protected]
Questions?