Defense and Military Sector Community and Industry Adjustment and Diversification Assessment, Analysis and Strategy Project

Last updated 06/19/17

The U.S. Department of Defense (DoD), Office of Economic Adjustment (OEA) awarded the State of Hawaii (State) an $849,176 grant by to complete a supply chain map for Hawaii’s defense contracting community. The period of performance for this grant is July 1, 2016 to December 31, 2017.


The defense industry is Hawaii’s second largest economic sector.  President Obama’s pivot to the Pacific drew attention and resources to the region.  Hawaii is unique in that it is home to all military services, with six (6) commands and eighteen (18) installations geographically located across the islands.  As a result, a sizable defense contractor community has been built in Hawaii and has been an effective partner in preserving the security of the nation and region. As there are future changes in defense spending, it is critical for our defense contractor community to be prepared to adapt to the changing requirements.

Hawaii’s unique geographic location – islands in the middle of the Pacific Ocean – makes it more challenging to transport resources to, from, and within the islands. Workforce mobility is limited such that changes in defense requirements will have more severe impacts on the neighboring community and be felt throughout the islands. Due to the reduction in the federal budget, downward spending impacts the defense supply chain at the state and local community level. These financial impacts are real and felt in communities that are dependent on direct and indirect spending from the military and defense activities. This is especially true for our military installations in Hawaii, and the support for these installations that is provided by a number of defense contractors.

This OEA grant to enhance our ability to assist communities, businesses, and workers that may be affected by changes in DoD spending in Hawaii. By systematically identifying and studying our defense supply chain, we will be better able to adjust and adapt to the military’s changing requirements in a timely manner.

Periodic macroeconomic analyses of the military’s impact on Hawaii’s economy have been conducted. While informative, these assessments had limited utility because they were not maintainable over time.

However, data about the defense supply chain is largely unavailable.  As a result, the defense industry economic sector is not well managed and supported.  This project will enable the State to develop an infrastructure and data set to inform efforts to better organize the sector and align planning and resources to help ensure its continued capabilities.

Project Approach

This project is being managed by the State of Hawaii, Department of Labor and Industrial Relations (DLIR), Office of Community Services (OCS), in partnership with the Office of the Governor.  Subject Matter Experts (SMEs) from across the State will provide information and support.  In addition, the Chamber of Commerce Hawaii, Military Affairs Council (MAC) is a critical partner for this project. SMEs and a MAC representative will make up a Project Leadership Team which will serve as an advisory committee.

Following a competitive procurement, a contractor team was selected to assist the State with this project.  The contractor team is providing services in the following areas:

  1. Research & Analysis: Designing and deploying the overall research methodology, including the design of the data collection and analysis tools to inform the analysis and action plan.
  1. Information Technology: Developing an interactive website that will facilitate ongoing data collection, transformation, analysis and presentation.
  1. Communications & Outreach: Creating branding and messaging to reach two audiences: (a) engaging vendor community stakeholders to and (b) informing general community members and policy makers about the impact of Hawaii’s military on our economy.

By identifying and mapping Hawaii’s defense contractor community, we will be better equipped to adjust to the military’s changing requirements.

Project Outcomes

This project will result in a website that will present the following:

  1. A Stakeholder Directory that includes company profiles, point of contacts (POC’s), and a list of contracts according to each company and industry.
  2. A supply chain map which shows the relationships between customer and awardee and all suppliers involved.
  3. A collection of economic data and infographics; and
  4. An Action Plan for the future. Partnerships, workforce development, barriers to entry are all aspects that could help strategic planning of this sector. This is to ensure an effective adaptation response to changes in defense spending and to help sustain Hawaii’s defense economy.


The website will provide information to manage and support this important sector of our economy.

This project was developed under contract with the State of Hawaii, through the Department of Labor and Industrial Relations – Office of Community Services, with financial support from the U.S. Department of Defense – Office of Economic Adjustment. The content reflects the views of the State of Hawaii and does not necessarily reflect the views of the Office of Economic Adjustment or the U.S. Department of Defense.