History

As a consequence of the Department of Defense (DOD) downsizing fiscally and physically over the last few years, there has been a corresponding reduction in the number and size of current and future defense contracts awarded to private sector manufacturing firms.

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This, in turn, has impacted communities and local and regional economies, which threatens national security, because decreased or cancelled contracts lead to workforce reduction and instability in companies and communities critical to the defense manufacturing sector. North Carolina has a significant numbers of defense contractors and has been facing challenges to keep those firms in operation.

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When defense programs change or are cut, contractors and manufacturers may be faced with budget cuts, staff layoffs or factory closings. The Office of Economic Adjustment supports a wide array of economic adjustment strategies by providing technical and grant assistance to areas that are impacted by defense cuts. These adjustment strategies often focus on regional job creation through business development, attraction and expansion, workforce development, and community economic diversification. One such initiative is the Defense Industry Adjustment program.

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The Defense Industry Adjustment (DIA) program assists communities and companies in planning for community adjustments and resiliency required by the cancellation or termination of a Department of Defense (DOD) contract, the failure to proceed with an approved major weapon system program, or by a publicly announced planned major reduction in DOD spending that would directly and adversely affect a community or company. This program’s goal is to find out where defense manufacturers are in order to know if there is even a local problem and map out a supply chain, and then apply adjustment and recovery strategies.